Archived IMT (2010.09.30)

MOODYS DOWNGRADES SPAIN from AAA to A1, 8 months after Fitch & S&P have both stripped Spain of its top rating. Moodys has consistently been behind the curve in its credit rating decisions. Most of the EUR losses focussed on EURJPY and EURGBP, while EURUSD pullback so far limited at $1.3550s as USD weakness remains the main theme on Fed QE and US Congressional bill. News that Anglo Irish will need as much as EUR 34 bln including a 67% haircut from NAMA. Technically, EURUSD has yet to regain $1.3850s on THE WEEKLY CHART, with $1.3520 now acting as key support (prev resistance). Watch USDCAD ahead of todays Jul GDP release, exp at -0.1%, which would be first negative monthly reading since August 2009. YEN STRENGTH STILL DOMINATES CHF as CHFJPY drifts near session lows at 85.11, suggesting EURJPY and CADJPY would be under more pressure especially in the event ahead of fresh worries from US jobless claims later today.