EU - 06/12/11
**S&P places 15 EU member states on Credit Watch Negative**
S&P cited systemic stress due to tightening credit conditions and markedly higher risk premiums on sovereigns as their basis for the ratings actions. S&P detailed that sovereign ratings could be lowered by up to one notch for Austria, Belgium, Finland, Germany, Netherlands and Luxembourg and up to two notches for the remaining countries. S&P expect to conclude their review as soon as possible following the EU summit on 8/9th December. Full list of affected countries follows (Cyprus was already on watch negative):
· Austria, Belgium, Finland, Germany, Luxembourg and Netherlands (Possible 1 notch downgrade)
· France, Estonia, Ireland, Italy, Malta, Portugal, Slovakia, Slovenia and Spain. (Possible 2 notch downgrade)
Dubai has for the first time raised the prospect of restructuring some bonds next year as the emirate and its state-related companies face a wall of USD 10bln in debt repayments.
Australian RBA Cash Target (Dec) M/M 4.25% vs. Exp. 4.25% (Prev. 4.50%)
China should increase flexibility and draft clear goals for floating exchange rate rules according to a researcher with the State Information Centre.