Morning in brief: Spain downgraded to near junk status
Spain’s credit rating has been downgraded even despite a relatively successful bond auction yesterday.
The BBC reports that Fitch Ratings has cut government debt by three notches to BBB as estimations around the size of the bailout the country will require continue to grow. Spanish government debt is now within two steps of junk. Following news of the downgrade, German Chancellor Angela Merkel said Europe is ready to act to ensure stability.
The Spanish banking sector reportedly needs as much as €40 billion (£32 billion) order to survive the current crisis, writes Reuters.
The decision to downgrade Spain’s credit rating has led to a rise in German bunds for the first time in five days, according to Bloomberg. Investor demand for traditionally more secure assets resulted in a drop of four basis points on 10-year German government debt.
Japanese camera maker Olympus has announced it will cut 2,700 jobs in a bid to recover from the accounting scandal which contributed to a annualised loss of £400m in the year ending March. Under the five year plan unveiled by the company in a bid to get back to basics, sweeping redundancies wukk be made, the BBC reports.
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