Good morning. Here’s what you need to know.
- Asian markets were mostly up in overnight trading with the Bombay Stock Exchange up 2.11%. Europe is up despite the Italian downgrade, and U.S. futures have opened higher.
- S&P downgraded Italy’s credit rating late Monday to A from A+ with a negative outlook. The ratings agency cited the country’s weak economy driven by the government’s austerity measures, its debt, and a fragile governing coalition as the main causes for the downgrade. S&P last downgraded Italy in 2006. Check out the eerie similarities between Italy and Greece >
- German investor confidence fell to -43.3 in September from -37.6 in August, reaching its lowest level since December 2008. The decline in confidence is largely linked to the slowdown in GDP growth and further risks to the economy from the sovereign debt crisis in Europe.
- August housing starts fell 5% to 571K but building permits jumped to 620K >
- rumours last night that Greece might hold a national referendum on whether it would stay in the Eurozone and push on with austerity, have been denied by Greece. Meanwhile Greek finance minister Evangelos Venizelos is expected to hold a second teleconference with the troika today. Don’t Miss: Here’s who will get crushed if Greece defaults >
- The Federal Open Market Committee begins its two-day meeting on policy and rate decision today. Markets are subdued as they don’t expect the policy decision to be effective in stimulating growth. It is also expected to adopt a variation of “Operation Twist”. Here is your complete guide to the huge FOMC meeting >
- Bank of China halted foreign exchange swaps with European banks because of the sovereign debt crisis in Europe. The banks include Societe Generale, Credit Agricole and BNP Paribas, and the Moody’s downgrade of the banks are also said to play a part in the decision. Click here to see 15 facts about China that will blow your mind >
- Reinsurer Transatlantic Holdings is reportedly exploring a “limited standstill” agreement with Validus Holdings, after rejecting a bid from Buffett’s Berkshire Hathaway. Validus still has the hostile offer it made Transatlantic shareholders earlier this summer in which it took steps to replace Transatlantic’s board.
- German airline Deutsche Lufthansa AG lowered its 2011 earnings outlook. The company expects its profits to be at the ‘upper end of the three-digit million euro range’, but said the target of beating last year’s €876 million no longer appears achievable. Weak passenger operations and economic uncertainty were blamed for the lower guidance. Now here are 10 countries where consumer spending could explode >
- Spain’s treasury sold €4.46 billion of 12-month and 18-month treasury bills close to its maximum target. Yields on both however soared, as Spain sold €3.59 billion in 12-month bills at an average yield of 3.591%, and €870 million of 18-month bills at 3.807%, both higher than yields in auctions of the same bills last month and a year ago.
- BONUS – Michelle Williams has said she is dissatisfied with acting and dreams of becoming a laundress or a sous chef.
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