DXY down.
AUD down too.
Leads boots again.
Oli and gold up.
Metals undecided.
Miners
EM stuck.
High yield.
Yields stable.
Stocks stall.
Credit Agricole.
Higher long-term Treasury yields and tighter swap spreads have come following Moody’s Ratings downgrade.
Moody’s downgraded the US to Aa1 from Aaa and changed the outlookto stable from negative on 16 May to reflect rising Treasury debt and debt servicing cost.
Moody’s cited “Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.”
The rating agency does not believe that the current tax and spending cut bill under negotiation will result in“material multi-year reductions in mandatory spending and deficits.”
No shit, Sherlock. Anyway, to the extent that the downgrade weighs on DXY at the margin, it will lift AUD.
I doubt it will be material. More important is restoring faith in the moneyness of US debt via bolstered institutions.
Not much hope there!
