Moody’s

Moody’s has trimmed the rating for Greece by 2 notches to Ca Monday which is just one notch before the default status. The ratings agency warned that chance of a default is now “virtually 100 percent.”

Moody’s noted that while the bailout agreed last week by euro zone leaders will help Greece to reduce its debt, the country still faces medium-term solvency challenges and significant implementation risks.

Ireland’s credit rating was cut by Moody’s to junk this week. The ratings agency warned that the country would need a second round of bailout.

Ireland’s downgrade comes a week after Moody’s lowered the rating for Portugal to junk status with a similar advice to get a second bailout. The credit rating agency sees that private investors need to share the pain of helping sinking European nations.

Moody’s downgraded Portugal’s credit standing to junk, the first ratings agency that made the move which mean the country may need a second round of rescue funds before it can return to capital markets.

The rating cut was not absolutely unexpected and reminded that troubles in Europe are not ending with Greece’s bailout.

Some economists think Ireland may also need additional support, and investors worry Spain and Italy could be next in line for aid.

According to the independent assessment made by Moody’s, China’s local government debt burden may be larger by 3.5 trillion yuan ($540 billion) than estimated by local auditors which places banks on the hook for deeper losses that could threaten their credit ratings.

Addressing the estimate by China's state auditor that its local governments have chalked up 10.7 trillion yuan of debt, Moody's said it found more potential loans after accounting for discrepancies in figures given by various Chinese authorities.

The European Central Bank made a statement that it would further accept Greek debt as collateral for loans unless all the major credit rating agencies inclusively declare it to be in default.

The ECB said it would rely on the principle of using the best rating available from the agencies – Standard & Poor’s, Moody’s and Fitch – the official said.

Earlier S&P’s warned that a plan supported by Germany and France for banks to roll over their holdings of Greek debt into new bonds would constitute a “selective default”.

Moody’s warned it would downgrade Aaa-rated US states and municipalities if the country on the whole loses its top rating or if federal funding falls significantly as part of a plan to reduce the nation's deficit.

Inasmuch as most states and some municipalities rely heavily on federal funding for the operational purposes, they may appear vulnerable as the government plans to cut budget in the volatile economic environment, Moody's senior analyst Anne Van Praagh noted.

The euro declined against major currencies before the European session on Thursday on Moody’s downgrade for Spain. Besides, a weaker-than-expected German trade data also impacted the euro.

The euro fell to an 8-day low of 1.3806 against the US dollar around 2:15 am ET. The euro-buck pair is presently worth 1.3820, down from 1.3910 hit late New York Wednesday. The next downside target for the pair is seen around the 1.3740 level.

Nokia was warned by the two rating agencies that it will be downgraded unless it rectifies its weakening market position. Standard & Poors has warned the company that a downgrade is "likely" once a three-month review into the company's prospects has been completed. Moody's made a similar warning last week after Nokia's earnings call.

Both agencies point to the pressure from Apple and Android. Meantime, no one cites Samsung as another strong rival because usually the South Korean vendor is considered to make mobile phones that are as good Nokia's own devices.

In early European session the Swiss franc took off to a record high against the euro and the pound as investors bought safe-haven currencies after ratings agency Moody's said it may downgrade Spain's debt.

The franc also jumped to near a 7- 1/2 -month high against the yen.

Ratings agency Moody's placed Spain's Aa1 credit rating on review for a possible cut, citing the country's deteriorating fiscal position.

In response to Moody’s last week statement that anemic U.S. growth, on top of already stretched government finances, could put pressure on the country triple-A status, the U.S. Treasury Secretary Timothy Geithner said that while we should expect slow and uneven recovery of the American economy the risk that it will slip back into recession is lower now than at any time in the past year.

Geithner dismissed concerns that rising U.S. indebtedness might put pressure on the United States' prized triple-A credit rating.