The reaction of futures contracts after the reduction of US debt rating by Moody’s

• Moody’s reduces the rating of the American debt from AAA to AA1, citing deficits.
• The US treasure yields rise, with the 30 -year -old exceeding 5%.
• The Chamber Budget Committee approves the Federal Budget in Committee.
• China increases tariffs on US engineering plastics and EU.

The Actions of the United States (USA) They opened with a negative tone on Monday after the repercussions of Friday afternoon, when the Moody’s qualification agency lowered its perspective on the US debt from AAA to AA1. Moody’s had already had the US government in surveillance for a year and a half, so the real reduction should not have surprised investors too much. In addition, Moody’s was the last of the three main qualification agencies in lowering the US rating.

However, the reduction occurs while Chamber Republicans drive their latest financing bill outside the committee, so the market is renewing its position on the failure of US politicians to curb large current deficits. The Republican bill cuts climate and medical policy funds, but extends Trump’s tax cuts in 2017 and increases military financing, resulting in a continuous structural deficit.

“This (the reduction) is an important symbolic movement, since Moody’s was the last of the main qualification agencies in having the US at the highest rating,” said Jim Reid of Deutsche Bank in a client note. “Moody’s has had them in surveillance since November 2023, and if there is going to be a change, it tends to occur within 12 to 18 months, so this news should not have been unexpected.”

The Chamber Budget Committee approved the bill with a narrow vote from 17 to 16, and it seems that the president of the Chamber, Mike Johnson, still has a job to be done, since a segment of the Republicans requires more drastic cuts.

Nasdaq’s futures fell more than 1.4% in Monday’s premarket, and S&P 500 futures yielded 1%.

As for the bonds, the treasure of 30 years of the USA saw its performance exceed 5% for the first time since October 2023, since the market requires a higher performance for a higher risk. The 10 -year treasure yield, which is significant for the US mortgage industry, also saw its yield increase 1.67% to 4.56%, which can increase shares of the market of shares a Bonds.

On the other side of the Pacific, the Retail sales China increased 5.1% year -on -year in April from 5.9% in March and below the 5.5% consensus. China’s industrial production reached 6.1% year -on -year, well above the consensus of 5.5% but below 7.7% in March. China also instituted high anti -dumping tariffs on POM copolymers, a type of engineering plastic used in vehicles and consumer electronics. The tariff rate was set at 74.9% for US producers and 34.5% for European companies. Japan and Taiwan were also subject to tariffs.

The Home Depot Profit (HD), Lowe’s (Low), Snowflake (snow) and Palo Alto Networks (PANW) They are reported this week.

Nasdaq 100 Futuro Diario Graphic