Ratings
agency Standard & Poor’s revised Greece’s outlook on Tuesday to
negative, increasing the likelihood that the troubled nation will need
more support from European Union lenders.

Ratings
agency Standard & Poor’s revised Greece’s outlook on Tuesday to
negative, increasing the likelihood that the troubled nation will need
more support from European Union lenders.

Standard
& Poor’s also affirmed that Greece’s CCC rating which is already
eight levels below investment grade was revised from stable to negative.
The ratings agency said it sees the Greek economy shrinking by 10% to
11%, cumulatively, during 2012-2013.

It
is getting more and more likely that Greece will leave the EU by the
end of the year and sooner if they are not given more funding!

The
Italian PM has stated that they will not require any financial help
which has helped the Euro – but do you believe it? We heard the same
thing from Spain!

The
UK is the one under pressure this week. Although retail sales,
manufacturing and Industrial production figures were not as bad as
expected, it was still very poor and indicates that the situation in the
UK is getting worse! Growth forecasts have been cut to 0% from an
initial prediction 0.8%! The way things are shaping up – this looks to
go into negative.

We
also have the Inflationary report today which is likely to show that
inflation has come down further. If we analyse this – fuel, heating and
food prices have not really come down so reduced inflation is really
coming from people spending less on luxury goods, which is not a good
thing. It also means that there is no chance that the BoE will increase
interest rates and in fact could increase pressure on reducing them to
encourage people to spend more in the high street shops!

Everything points towards a weaker Pound –however this is being overshadowed by the ever increasing crises in the Eurozone!

Today’s Fundamentals

06:00 Germany:  Trade Balance s.a. (Jun) – This is expected to stay the same at €15B which will bring stability for the Euro.

09:30 United Kingdom:  Bank of England Quarterly Inflation Report

10:00
Germany:  Industrial Production s.a. w.d.a. (YoY) (Jun) – Consensus
predicts a slight increase at 0.3% from the previous position 0.0% which
will be positive or bullish for the Euro.

17:00 United States:  10-Year Note Auction – Expected to stay the same at 1.459% which will bring stability for the USD.

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