Europe

Europe: more negative noises on the Europe front. Moody's lowered the outlook for its debt rating on the European currency zone's temporary rescue fund to "negative" from “stable”. The move comes a day after Moody’s lowered the outlook for its ratings on Germany, the Netherlands and Luxembourg. Germany has a large stake in the €440 b rescue fund. The Netherlands and Luxembourg also have stakes in the fund, though they are much smaller. The mounting uncertainty over the debt crisis and the possibility that those stronger economies will have to provide aid to Spain or Italy prompted the move Monday to lower the three countries' debt outlook. The debt crisis has flared anew as fears intensify that Spain, the fourth-largest economy in the euro group, would be next in line for a government bailout. The temporary rescue fund is to be replaced by a permanent, €500b European Stability Mechanism when it's up and running - which won't be before Sep. European leaders agreed at a summit last month that the ESM will eventually be able to funnel money directly to distressed banks - rather than govts -- once an effective European banking supervisor is set up.