Monday, September 12, 2011

BNP Paribas Is Down 12% On Possible Moody's Downgrade, EURUSD Bounced Off 1.34986

Source: Google Finance
Large European banks, BNP Paribas (BNP), Societe Generale (GLE), Credit Agricole (ACA), Deutsche Bank (DBK) and UniCredit (UCG), are down 8-13% today with traders pricing in possible credit rating downgrades by Moody's and Greece's ongoing debt crisis. Greece needs to meet its budget goals to receive the next bailout tranche from the EU/IMF, or it will run out of cash in mid-October (Deputy Finance Minister). However, it appears that French banks will not be affected by a Greek default (Noyer Says French Banks Can Contend With Any Greek Problem, French banks can weather Greece default: SocGen CEO Frederic Oudea). Do they hold Portuguese, Irish, Italian and Spanish debt? To be sure, I'd monitor European bank credit default swaps or default insurance premiums. I see SocGen is planning to sell off $4 billion euros worth of assets by 2013. EUR/USD hit a low of 1.34986 and bounced back hard to 1.36252. I'll be monitoring la situation.

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