Markets Brush off S&P Downgrades, Focus on Greece European markets responded calmly on Monday to Standard & Poor's decision to cut the credit ratings of a number of euro countries, including France. The downgrades, which were based on concerns over Europe's ability to handle its two-year debt crisis and the lack of economic growth, had been anticipated for weeks so the market impact was muted, especially since the U.S. is on holiday for Martin Luther King Day. Europe will likely remain the focus of attention all week as a number of bond auctions are due and Greece tries to clinch a debt deal with its private creditors. Last October, Greece's partners in the eurozone sanctioned a deal whereby Greece's creditors agree to take a cut in the value of their Greek bond holdings to help lighten the country's debt burden. The deal with private investors, known as the Private Sector Involvement, or PSI, aims to reduce Greece's debt by euro100 billion ($126.5 billion) by swapping private creditors' bonds for new ones with a lower value. It is a key part of a euro130 billion international bailout, the second one for Greece. It is expected that talks on the PSI will resume this coming week after being abandoned last Friday. On Tuesday, representatives of Greece's creditors - the European Union, the European Central Bank and the International Monetary Fund - will visit Greece for yet another round of inspections of its efforts at fiscal and structural reform and negotiations for the next tranche, the seventh, from the first bailout. Without a deal with its private creditors, Greece has been told it won't get the next tranche of money due from its first bailout. Without that money, Greece would be unable to pay a big bond redemption in March and would face the prospect of defaulting on its debts, potentially triggering more mayhem in financial markets. Gary Jenkins, a director of Swordfish Research, reckons the Greek debt restructuring poses more risks to the markets in the short-term than S&P's decision to strip France of its cherished triple A credit rating or to downgrade eight other euro countries, including Italy. "The progress or otherwise of these negotiations will probably dictate how the market trades over the next few weeks," said Jenkins. Greece's Prime Minister Lucas Papademos insisted in an interview with CNBC that a deal will be hammered out. "Some further reflection is necessary on how to put all the elements together," he said. So as you know, there is a little pause in these discussions. But I'm confident that they will continue and we will reach an agreement that is mutually acceptable in time. While investors awaited developments, markets were slightly lower, trading in fairly narrow ranges. In Europe, Germany's DAX was 0.3 percent higher at 6,161 while the CAC-40 in France rose 0.1 percent to 3,198. The FTSE 100 index of leading British shares was down 0.1 percent at 5,623. The euro was also relatively steady, up 0.2 percent at $1.2672. ON Friday, it had fallen to a 17-month dollar low of $1.2623 as speculation swirled in the markets of S&P's downgrades. Earlier in Asia, markets responded more negatively to the S&P downgrades, which were confirmed after U.S. and European markets had closed on Friday. Asian markets had already closed by the time speculation of the downgrades emerged.