Spanish debt has been downgraded a notch from triple-A to Aa1 by Moody's the major Credit Rating agency, not as bad as the three notches lost recently by Greece but bringing the Eurozone back into play from a negative point of view.

Moody's feel that Spanish public finances have deteriorated and growth will be slow at an expected 1% yearly and have revised their estimation for a possible recapitalisation, from  E17billion to E 40 to E50 billion, with a possibility that this could go higher.

This has caused immediate Euro currency weakness and sell off of European equities, that were coping in a relatively stable fashion with the Libyan situation and resulting oil prices, mainly supported by good economic data from the US.