Global Markets:
- Asian Stock Markets : Nikkei down 0.08%, Shanghai Composite down 0.37%, Hang Seng down 0.46% ASX up 0.42%
- Commodities : Gold at $3220.35 (-0.39%), Silver at $32.8 (-0.69%), Brent Oil at $64.58 (-0.29%), WTI Oil at $61.6 (0.29%)
- Rates : US 10-year yield at 4.424, UK 10-year yield at 4.6560, Germany 10-year yield at 2.6250
News & Data:
- (USD) Prelim UoM Consumer Sentiment 50.8 to 53.1 expected
Markets Update:
Asia-Pacific markets declined on Monday as investors reacted to fresh economic data from China and Moody’s downgrade of the U.S. credit rating. Hong Kong’s Hang Seng index dropped 0.73%, and China’s CSI 300 fell 0.48%. Japan’s Nikkei 225 slipped 0.54%, while the Topix lost 0.36%. South Korea’s Kospi declined 0.47%, and the Kosdaq was down 0.77%. In Australia, the S&P/ASX 200 edged 0.15% lower as the Reserve Bank of Australia began its two-day policy meeting.
The market pressure followed Moody’s Ratings decision on Friday to downgrade the U.S. sovereign credit rating from Aaa to Aa1. The agency cited rising fiscal challenges, including the growing federal budget deficit and the increasing cost of debt refinancing in a high interest rate environment. This move places Moody’s in line with S&P and Fitch, which downgraded the U.S. credit rating in 2011 and 2023, respectively.
Despite the downgrade, analysts such as Vasu Menon, managing director at OCBC, noted that a significant market sell-off is unlikely. In his view, the concerns highlighted by Moody’s—particularly about the expanding U.S. deficit and debt—have been long-standing and widely discussed. He emphasized that these issues, while serious, have already been priced into market expectations to some extent.
In the U.S., stock futures fell after the S&P 500 recorded a four-day rally driven by optimism over tariff reductions between the U.S. and China and positive inflation data. Dow futures dropped 292 points (0.7%), while S&P 500 and Nasdaq 100 futures were down 0.7% and 0.8%, respectively. On Friday, the S&P 500 rose 0.70% to 5,958.38, the Nasdaq gained 0.52% to close at 19,211.10, and the Dow added 331.99 points (0.78%) to finish at 42,654.74, entering positive territory for 2025.
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