Ratings agency Fitch cut Greece´s credit rating by three notches to B+. Fitch also issued a negative outlook and commented that ´´the ratings downgrade reflects the scale of the challenge facing Greece in implementing a radical fiscal and structural reform programme...´´.

European shares eased on Friday, with investors reducing their exposure to riskier assets. Banking stocks fell on uncertainty over exposure to Greek debt. The STOXX Europe 600 banking index lost 0.8pct. However overall losses were limited by gains in heavyweight BP (up 2.7pct) after, Mitsui & Co agreed to pay $1.1 billion towards the clean-up bill for the Gulf of Mexico oil spill. The FTSEurofirst index closed down 0.2pct while the German Dax lost 1.2pct and the UK FTSE was down by 0.1pct.

US sharemarkets fell on Friday, fuelled by euro-zone debt concerns. A weak profit outlook from Gap (down 17.5pct) also hurt the retailers. Gap slashed its full-year profit outlook citing that higher prices will not be enough to offset rising cotton costs. The S&P Retail Index fell 1.4pct. The Dow Jones fell 93pts or 0.7pct with the S&P 500 down 0.8pct and the Nasdaq lost 20pts to 0.7pct. Over the week the Dow Jones fell by 0.7pct with the S&P 500 down 0.3pct and the Nasdaq was down 0.9pct.

US treasuries rallied on Friday (yields lower) boosted by a safety bid following the euro zone debt issues. Over the coming week the US treasury department is expected to auction $99 billion in new notes. US 2yr yields fell by 2pts to 0.51pct and US 10yr yields fell by 3pts to 3.15pct. Over the week US 2yr yields fell by 2.5pts and US 10yr yields fell by 3pts.

The Euro slumped against the US dollar following the news of the ratings downgrade for Greece. The Euro fell from highs near US$1.4340 to US$1.4140, ending US trade near its lows. The Aussie dollar rallied from lows near US106.15c to US107.05c before ending US trade near US106.65c. And the Japanese yen traded between 81.45 yen per US dollar and JPY81.85, ending US trade around JPY81.70.

US crude oil prices rose in a light and volatile trading session on Friday. Prices tumbled earlier in the session as the US dollar rallied after Norway suspended a payment to Greece. However the expiration of the June contract saw prices rally towards the end of the session. The Nymex crude oil contract rose by US$1.05 or 1.1pct to US$99.49 a barrel and London Brent crude rose by US97c to US$112.39 a barrel. Over the week Nymex crude fell by US16c a barrel or 0.2pct.

Base metal prices were mostly higher on the London Metal Exchange on Friday. Copper closed 1.4pct higher, touching a two week high on evidence of strengthening Chinese demand. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 14.6pct in a week. And the gold price rose on Friday, with Comex gold futures up by US$16.50 an ounce to US$1,508.90. Gold rose by US$15.30 an ounce over the week.

Ahead: In Australia and the US, no economic data is released.