Moody’s changes rating outlook to negative for Germany, Netherlands and Luxembourg!

On Monday Moody's Investors Service changed the outlook for Germany, Netherlands and Luxembourg’s Aaa credit ratings, lowering these to a negative, which prompted “rising uncertainty” about Europe’s debt crisis.

All eyes will be on today, as the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission (EC) which make up the troika will assess Greece’s progress towards reducing its huge debts. The outcome will decide whether Greece is eligible to receive €31.5bn - the last tranche of a €130bn ($158bn, £102bn) aid package agreed in March. Early reports suggest that they will miss their targets and will question whether the other Euro members will provide more funds.

United Kingdom’s manufacturing sector will shrink for the first time in three years in 2012, as official figures are expected to show Britain was locked in recession in the second quarter. Manufacturing output will fall by 0.3pc as the Eurozone crisis continues to weigh on trade and exports. The group is forecasting 0.2pc growth for the economy in 2012, in line with the IMF’s view.

United States housing market is recovering with record low mortgage rates. United States average 30- year fixed-rate mortgage was 3.62% in the week ending July 5, matching or hitting a new record low in 10 of the last 11 weeks.  Also, the FOMC plans to meet July 31-Aug. 1 as reports point to sputtering growth in the world’s largest economy. The Fed’s options to promote faster job gains include expanding its balance sheet, reducing the interest rate paid to banks for reserves held at the central bank and altering communications on the outlook for interest rates, Chairman Ben S. Bernanke said in testimony to Congress last week.

Today’s Fundamentals

07:28 Germany:Markit Manufacturing PMI (Jul) - Consensus predicts a slight increase at 45.3 from the previous position 45.2 which will be positive or bullish for the Euro.

07:28 Germany:Markit Services PMI (Jul) - This is expected to slightly increase to 50.1 from the previous position 49.9 which will be positive or bullish for the Euro.

07:58 European Monetary UnionMarkit Manufacturing PMI (Jul) - Consensus predicts a slight increase at 45.3 from the previous position 45.1 which will be positive or bullish for the Euro.

07:58 European Monetary Union: Markit PMI Composite (Jul) - This is expected to stay the same at 46.4 which will bring stability for the Euro.

07:58 European Monetary Union:Markit Services PMI (Jul) - Another slight increase is expected by consensus at 47.3 from previous position of 47.1 which will be positive or bullish for the Euro.

08:30 United Kingdom: BBA Mortgage Approvals (Jun) - Expected to increase at 31.4K from the previous position 30.2K which will be positive or bullish for the GBP.

N/A    Troika visits Greece: Troika Lenders from the International Monetary Fund (IMF), European Central Bank (ECB) will assess Greece’s progress towards reducing its huge debts.

12:58 United States:Markit Manufacturing PMI (Jul) - Consensus predicts a slight decrease at 52.1 from previous position 52.5 which will be negative or bearish for the USD.

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