ECB HAS BLINKED, SAYS ANALYST - Portugal has suffered another downgrade from another ratings agency - this time Moody's has downgraded the country's debt to junk status.
But the Portuguese government argued that the downgrade had not taken proper account of the strong backing for austerity measures there, and its programme of economic measures.
Meanwhile, some of the major holders of Greek debt are meeting in Paris this morning to talk about Greece, and private creditor participation in the next phase of Greece's bail-out.
Markets analyst Paul Sommerville said he believed rating agencies were now coming under pressure from European governments, but were correct on Portugal, as the chances of the country's not needing a second bail-out were 'very slim'.
He said he did not believe European stock markets would suffer from the downgrade, as they were aware it was coming. Mr Sommerville said markets were more worried about the ECB's likely interest rate rise on Thursday and US unemployment figures on Friday.
Mr Sommerville said the market had pencilled in a rates rise, but would be watching Jean-Claude Trichet's comments afterwards closely. He said rises in interest rates were not good for a Europe which was in crisis, and Mr Trichet would have to pull back from further rates rises.
He also said the ECB had 'blinked' on Greece, indicating that it would still provide it with money even if Greece was deemed to be in default by some rating agencies.
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NEWS AND CURRENCIES - Building materials group CRH says it has made 21 acquisitions and investments totalling approximately €200m during the first-half of 2011.
On the currency markets, the euro is trading at $1.4458 and 90p sterling.
