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8/8/07

Money Cnn: Europe's economic prospects still strong despite high market volatility

For the complete report in CNNMoney click on this link

Europe's economic prospects still strong despite high market volatility

In report titled 'European economic forecast: the central banks' tightening cycle nears its end,' S&P said the present high rate of capacity utilization combined with robust demand prospects will continue to spur capital spending. But, the volatility in credit markets could curtail liquidity and act as a powerful brake on corporate investments.

'Our view at this point is that investment-grade corporates are unlikely to be significantly affected by the current market turbulence. But there is a risk that a more dramatic flight to quality by investors and money managers would shut down refinancing routes for all but the most creditworthy entities,' Jean-Michel Six, S&P's chief economist for Europe, said.

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