Italy bond rating cut by Moody’s
Italy’s bond rating was cut and its negative outlook reiterated by Moody’s Investors Service as the euro area’s third-biggest economy faces higher funding costs, slower growth, and contagion risk from Greece and Spain.
The ratings company lowered Italy’s government bond rating by two steps to Baa2 from A3 and said further downgrading is possible, according to a statement released in Frankfurt today. That makes Italy’s rating the same as those of Kazakhstan, Bulgaria and Brazil, according to data compiled by Bloomberg.
“Italy’s near-term economic outlook has deteriorated, as manifest in both weaker growth and higher unemployment, which creates risk of failure to meet fiscal consolidation targets,” Moody’s said. “Failure to meet fiscal targets in turn could weaken market confidence further, raising the risk of a sudden stop in market funding.”
While Italy is on track to bring its budget deficit within the European Union limit this year, its 10-year bond yield has risen above 6 percent in recent weeks after Spain sought a bailout, fueling concern that Italy might be next. Italy had enjoyed a respite from the crisis after Prime MinisterMario Monti’s government took office in November and passed 20 billion euros ($24.4 billion) in austerity measures and overhauled the country’s pension system.
italy is next..wait for the 7% to be hit and its bail out time again..one by one..knocking them down..