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Winners and losers from S&P Euro sovereign downgrade

Saturday, January 14, 2012 - 02:26

Jan. 13 - S&P downgraded nine Euro zone sovereign ratings and affirmed seven others. Insider takes a look at possible winners and losers from the downgrade.

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Hasn't been downgraded the AAA ratings of France and Austria. And seven other eurozone countries that action could lift prices of safe haven assets and hurt a European rescue fund. But a number of market analysts say most facets of already priced in -- bad news. Except perhaps the Euro Gartman letter editor Dennis Gartman says he sees it falling further to new lows over the weekend. Plus analysts expect ten year yield spreads between French and German bonds to widen. And the domino effect could lead to downgrades of French banks. Society Generale and and BNP Paribas. Credit Agricole the bigger French banks and in the spillover into the smaller fish bank which of course would be borrowers from the larger banks. Obviously those are kind of pace. Some increased pressures. One tangential victim of the downgrade the fund set up to bail out ailing eurozone countries the EFS that. It's very difficult to see. The ratings agencies can maintain. The triple -- ratings the facility has happened. It will be a more expensive. And it may be more difficult to raise funds because there. Remain a certain number of lenders in the world who could only -- -- AAA rated. Paper one indicator of credit concerns widened on rumors of the downgrades in early trade the two year swap spread reversed course mid day whitening sharply. On the flip side Germany's AAA rating was affirmed so winners could include its bonds and safe havens like the US dollar and treasurys. And RB SFX strategist Brian -- as investors may shift money into the few remaining players on the Tripoli roster. So just Canadian Australian and British bonds and currencies. But research fellow -- Jacob's -- is part of the Peterson Institute says some downgraded debt are buying opportunities. Both Italian and Spanish debt despite that there bullet like you're facing dog -- now. Actually look as a long term good investment because I do believe that we are gonna see -- declines of convergence. All. These two countries beyond financial assets one big loser and all this could be French president Nicholas Sarkozy. He's running for reelection and this downgrade could hurt his chances of staying in power. I'm Fred Katayama this is what.