Threadneedle's Cielinski on an eventful week in markets

AN EVENTFUL WEEK

Jim Cielinski, head of fixed income at Threadneedle, argues the downgrade by S&P is the least of the US' worries, and explains why the ECB's move to buy Italian and Spanish bonds may not be enough to return certainty to markets.

Last week was an eventful week in markets, followed by a similarly eventful weekend, with Standard & Poor’s downgrade of the US to AA+ followed by an emergency meeting of the European Central Bank’s governing council, where the ECB discussed and subsequently actioned the purchase of Italian and Spanish bonds. US debt downgrade – a response not a driver The downgrade of US sovereign debt from AAA to AA+ is historic and heavily symbolic of the deteriorating state of US financial conditions. The timing was equally painful, occurring after one of the worst weeks in several years, but ...