Key Points
Washingtons short-term borrowing costs jumped after Fitch put its U.S. rating on downgrade watch late on Wednesday...
Global equities were down, U.S. shares were mixed and the dollar rallied to the highest since mid-March on Thursday after a top Republican signaled some progress was made in U.S. debt ceiling negotiations.Spot gold prices dropped to a two-month low amid the greenbacks gains..
Although once we get past that its not going to be green open meadows and milk and cookies, he added, pointing to a backlog of $800 billion of short-term U.S. debt that would need to be issued over the remainder of the year.Asia had been divided overnight with Japan plodding higher but Hong Kong tumbling almost 2% to its weakest level of the year amid renewed geopolitical concerns surrounding Chinese tech giants such as Tencent, Alibaba , AIA and Meituan listed there...
But with no resolution in sight, traders remained wary of a possible default in early June.Theres a beginning of a sense that maybe this time is a little bit different, said Rob Carnell, INGs regional head of research, Asia-Pacific.A downgrade could affect the pricing of trillions of dollars of Treasury debt securities..
On the interest rate front, Federal Reserve minutes had shown its policymakers generally agreed that the need for further rate increases had become less certain at their the May 2-3 meeting when they raised rates another quarter percentage point to 5.00%-5.25%.The dollar index, which tracks the greenback against a basket of six currencies, gained 0.26 points, or 0.25%, to 104.15.U.S. crude fell 2.49% to $72.49 a barrel, as benchmark Brent crude futures dropped to $76.65 per barrel.Spot gold prices fell 0.54% to $1,946.39 an ounce..
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