Market Follows Euro as Egan-Jones Cuts Spain's Rating

Of all of the rating agencies, it seems to me Egan Jones is the most credible. In any case, it wouldn't be the first time recently that Spain's sovereign credit rating has been downgraded to Junk.

Egan Jones cut Spain from BB- to B "Outlook Negative"

The gist of the EJ ratings action...

"Spain will inevitably be faced with payments to support a portion its banking sector and for its weaker provinces. Assets of Spain's largest two banks exceed its GDP. We are slipping our rating to "B"; watch for more requests for support from the banks and money creation."

As we have talked about many times, the Lehman-like moment in which the point of no return is reached and things snowball very quickly has been reached. 

Euro reaction:

 EUR/USD reaction to Egan Jones action.

 EUR/USD still has the long term downtrend line as a support area.

SPY reaction/vs Euro

 SPY vs Euro (white) intraday

On a longer 15 min chart, the market has obviously been showing much better relative strength than the FX legacy arbitrage correlation would suggest.