Stock markets drop after US credit rating downgraded by Moody’s – business live
Rolling coverage of the latest economic and financial news
US government bonds are weakening this morning, pushing the yield – or interest rate – on Treasury bills higher.
The US 30-year Treasury yield has risen to 5% this morning, up from 4.89% on Friday night just before Moody’s downgraded the US.
Treasury yields are higher across the board, and the 30-year yield breached the key 5% level on Monday morning. While we do not think that there will be a mass exodus from US assets this week, it could lead to more mutterings about diversification away from US assets.
The impact on risk sentiment has been broad-based, and there were also declines for stocks in Asia and European futures are also lower. If we see a move out of Treasuries, and gains for bonds elsewhere, then we could see global stocks ex the US make a recovery.
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