Markets rebound after Moody’s cuts US banks ratings - 9.8.2023

The Dollar strengthening has halted currently . The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.5% on Tuesday.

GBP/USD joined EUR/USD’s accelerated retreating yesterday after German federal statistics office Destatis final data showed German inflation eased to 6.5% in July, in line with expectations. Both euro and Pound are higher against the dollar currently. USD/JPY continued its climbing Tuesday while AUD/USD reversed its advancing with both the yen and Australian dollar higher against the Greenback currently.

Futures on three main US stock indexes are up currently as the yield on benchmark 10-year US notes has edged down to 4.002% currently. The ratings agency Moody’s downgraded 10 US medium and small banks on Monday and said it may downgrade some of the nation's biggest lenders, citing funding risks and weaker profitability. Stock indexes ended down on Tuesday with three main stock benchmarks recording daily losses in the range from -0.79% to -0.4%. as Moody’s downgrade of banks spurred fears about the health of US banks.

European stock indexes are up currently after a bearish session on Tuesday following a surprise Italian cabinet decision on a one-off 40% tax on profits made by banks from higher interest rates. Asian indexes futures are rising today with Hong Kong’s Hang Seng index leading gains while data showed consumer prices in China fell in July for the first time since February 2021.

Brent is little changed currently. Brent reversed earlier losses yesterday after US Energy Information Administration projected gross domestic product growth to rise by 1.9% in 2023, up from 1.5% in a previous forecast. The Energy Information Administration will release its US inventory data at 16:30 CET today. The US oil benchmark West Texas Intermediate (WTI) rose 1.2% and higher today. Brent gained 1.0% to $86.17 a barrel.