There is a sense of renewed optimism in capital markets this morning. Speculation of a Spanish application for a precautionary bailout is providing positive fodder for the EUR. Along with Moody’s reaffirming Spain’s rating at investment grade this has been able to guide the single unit to test new weekly highs ahead of tomorrows European Economic Summit. Despite fears of an imminent cut, Moody’s maintained Spain’s government bond rating at Baa3, one notch above junk territory. The agency believes the measures that the Spanish government, the EU and ECB collectively have taken so far should allow the country to ... (full story)