Moody's says its outlook for sovereign creditworthiness in the euro area for 2020 has changed to negative
The ratings agency changes its outlook from stable to negative, citing expectations about the fundamental conditions driving sovereign credit in the region over the next 12-18 months.
Adding that:
"Our negative outlook for the euro area reflects most member states' limited buffers to react to a worsening external environment. The deteriorating global environment will weigh on growth in member states' open economies in 2020, although resilient domestic demand, easy monetary policy and some fiscal easing will mitigate the impact."
According to Moody's, the key factors driving the negative outlook are:
1. Deteriorating global environment
2. High public debt ratios
3. Increasingly fragmented political landscape
Not exactly good news for euro area assets but if the green shoots over the past few months can turn into something better, perhaps there is room for some optimism. Otherwise, there is definitely still cause for concern when it comes to the Eurozone economy this year.
