STOCK MARKET WATCH -- Friday, 13 January 2012

[muriel_volestrangler]

76. S&P expected to downgrade France and Austria tonight

http://www.guardian.co.uk/business/2012/jan/13/eurozone-crisis-live-markets-italian-bond-sale?commentpage=2#start-of-comments#block-19

Christopher Adams, the FT's Markets Editor, made this point on Twitter:

@ChrisAdamsMKTS: France & Austria to be cut to AA+ leaving Germany as only large triple-A country underwriting EFSF
...
David Song, currency analyst at DailyFX:


Standard and Poor's is expected to downgrade France, Spain, Italy, Belgium, Portugal and Austria later today. This credit event could spark a flight to safety as the heightening risk for contagion bears down on investor confidence.

As the ongoing turmoil in the financial system drags on the real economy, the European Central Bank may have little choice but to expand monetary policy further. Additionally, we may see the Governing Council continue to ramp up its balance sheet in an effort to shore up the banking system.