UPDATE: After some early losses in Spain and Italy, Europe is in the green across the major indices.That’s after an Italian bond auction went off without a hitch, and Italian 3-year borrowing costs fell.
This seems to have helped combat gloom from two big headlines overnight:
- First, the latest data showed that China’s GDP grew at an annualized rate of 7.6 per cent in the second quarter. That’s the slowest growth the Chinese economy has seen in 3 years.
- Since then, Moody’s ratings agency slashed Italy’s long-term rating by two notches from A3 to Baa2. That’s just two notches higher than junk.
Asian markets closed slightly higher or flat.
Analysts are looking ahead to an important Italian debt auction in just a few minutes, which should give some indication of investor reaction to the downgrade.