OctaFX | OctaFX Forex Broker
Open trading account

Flash: Is possible US credit downgrade an impetus for commodities? – Deutsche Bank

FXstreet.com (Barcelona) - Despite public holidays in parts of continental Europe, there were some notable price moves worth highlighting from yesterday.

In credit markets, the European subordinated financials credit index continued to gap tighter (-16bp) after the recent changes to financial CDS contracts proposed by ISDA. The index has firmed more than 40bp in the last four sessions, bringing the financials subordinated/senior multiple to 1.4x, its lowest level since 2010.

In commodities, silver and gold markets rallied an impressive 14% and 4.6% from the intraday lows, after silver was down by as much as 8.6% during the Asian session yesterday. Short covering and the earthquake in Chile were reportedly behind the intraday rally. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “A warning that Moody's could downgrade the US' credit rating this year probably helped drive commodities, as did a 0.6% drop in the USD index.”

In equities, we noted the underperformance in Italian equities yesterday (MIB -0.6%) - perhaps after a poll published by the SWG, suggested that the Italian government's approval rating had fallen from 43% at the start of the month to just 34% currently.

UK: Annual Retail Price Index grows less than expected in April

Year-over-year the UK Retail Price Index rose 2.9% in April, down from the 3.3% increase registered the previous month, National Statistics reported on Tuesday. Analysts expected the indicator to rise more by 3.1%.
Read more Previous

UK: DCLG House Price Index surprises to the upside in March

On an annual basis the UK DCLG House Price Index increased 2.7% in March, following 1.9% growth in February, according to data released today by the Office for National Statistics. Analysts expected a 2.3% increase.
Read more Next
Start livechat