Risk Mood Softens as Moody’s US Downgrade and Mixed China Data Dent Confidence

Action Insight Daily Report 5-19-25

Risk Mood Softens as Moody’s US Downgrade and Mixed China Data Dent Confidence

Global markets kicked off the week with a mild risk-off tone, driven by renewed concerns over US creditworthiness and mixed economic data out of China. Moody’s downgrade of the US sovereign rating from Aaa to Aa1 late last Friday has cast a shadow over investor sentiment. Meanwhile, China’s latest data highlighted a fragile recovery with industrial output holding up but retail sales and investment disappointing. Still, losses in Asian equities have been relatively contained so far, suggesting caution more than panic.

The more notable market movement is in US futures, where the DOW is down over 200 points in early trade. However, since US cash markets are yet to reopen, the true extent of investor reaction remains to be seen. Currency markets are relatively quiet, with Dollar trading on the soft side, but there’s no sign of a broad-based selloff. Nearly all major currency pairs and crosses are hovering within Friday’s ranges.

Trade policy developments will continue dominate this week's narrative. In a Sunday interview, US Treasury Secretary Scott Bessent reiterated the administration’s readiness to reinstate reciprocal tariffs at the April 2 rate on countries that fail to negotiate “in good faith.” However, he offered little clarity on what qualifies as “good faith” or when decisions might be announced.

Bessent noted that the US is currently focused on its 18 most important trading relationships, and letters will be sent out to those nations deemed to be stalling or resisting negotiations. The threat of reactivating the more extreme tariff brackets imposed in April looms large and could provoke renewed volatility....

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Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol

AUD/USD Daily Report

Daily Pivots: (S1) 0.6382; (P) 0.6409; (R1) 0.6430; More...

Intraday bias in AUD/USD remains neutral as range trading continues. Further rise is in favor as long as 0.6356 support holds. One the upside, break of 0.6511 will resume the rise from 0.5913 and target 61.8% retracement of 0.6941 to 0.5913 at 0.6548. However, firm break of 0.6356 will bring deeper pullback to 38.2% retracement of 0.5913 to 0.6511 at 0.6283 first.

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
22:30 NZD Business NZ PSI Apr 48.5 49.1 48.9
22:45 NZD PPI Input Q/Q Q1 2.90% 0.20% -0.90%
22:45 NZD PPI Output Q/Q Q1 2.10% 0.10% -0.10%
23:01 GBP Rightmove House Price Index M/M May 0.60% 1.40%
02:00 CNY Industrial Production Y/Y Apr 6.10% 5.70% 7.70%
02:00 CNY Retail Sales Y/Y Apr 5.10% 6.00% 5.90%
02:00 CNY Fixed Asset Investment YTD Y/Y Apr 4.00% 4.40% 4.20%
04:30 JPY Tertiary Industry Index M/M Mar -0.30% -0.20% 0.00% 0.50%
09:00 EUR Eurozone CPI Y/Y Apr F 2.20% 2.20%
09:00 EUR Eurozone CPI Core Y/Y Apr F 2.70% 2.70%