The market trades with a 'risk off' bias after Moody's downgrade of five Spanish regions. It's also been reported that Spanish lenders will be transferring housing sector related assets to bad banks with large average discounts: 52.2% on newly constructed homes, 47.5% to second hand homes, and 85% to undeveloped land.
Spain released its Q3 GDP, down by -0.4% quarterly and -1.7% yearly. The domestic demand fell by -1.2% in Q3, relatively better than Q2 at -1.4%. The Spanish Economy Minister Montoro claims 2013 will be the last year in recession, and that the 2013 Budget will be the most social in democracy.
Commerzbank analysts regard the break of 0.9290/40 as negative: “The break down through here is viewed negatively, it implies ongoing weakness to the 78.6% retracement of the move seen this year at 0.9154”, wrote analyst Karen Jones.