The ratings watch has given a further boost to U.S Treasury yields and the greenback, with the dollar index notching new trend highs while Japan’s yen hit its lowest since Nov. 30 and the euro and sterling are sitting on major chart support.
Two-year Treasury yields have also extended to highs not seen since mid-March, while the yield on Treasury bills maturing in early June climbed further above 7%.
Stock markets across Asia are in the red, apart from Japan’s effervescent Nikkei, although S&P E-mini and Nasdaq futures have bounced after a strong revenue forecast from Nvidia Corp.
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Graphics are produced by Reuters.
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Europe’s data calendar is fairly light, with German final Q2 GDP the main release. However, there are plenty of central bank speakers, with comments from Bundesbank head Joachim Nagel and ECB chief economist Philip Lane likely to draw the most interest.
Bank of England monetary policy committee member Jonathan Haskell’s speech in Washington will also be watched after UK price data again surpassed expectations on Wednesday. That left Governor Andrew Bailey fretting about “sticky and stubborn“ inflation while markets priced in further policy tightening.
Expectations of a Federal Reserve rate hike in June also continued to creep up, even after the May 2-3 meeting minutes showed little consensus on the need for further increases.
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/cloudfront-us-east-2.images.arcpublishing.com/reuters/2M6UZWAYHVJDZLUELMQ4OEUQEM.jpg "Fitch puts US on watch; will it matter in Washington? 38")
