Marketwatch North America

Daily Insights
August 2, 2023

Fitch Ratings downgraded U.S. government debt one level from AAA to AA+ on the view that the country’s finances will deteriorate over the next three years due to tax cuts, new spending programs, economic shocks, and political gridlock. In May Fitch warned that it was weighing a downgrade during the debt-limit impasse, and that the recurring debt-limit debate with eleventh-hour agreements have eroded confidence in the government’s budgetary management. Yields on U.S. treasuries are little changed, and while Treasury Secretary described the downgrade as ‘arbitrary’ and ‘outdated’, it often takes the perspective of a neutral party (political outsider) to highlight vulnerabilities.

The U.S. dollar index is +0.12%, reflecting the dollar’s overnight gains vs. its G10 counterparts: +0.91% vs. NZD, +0.74% vs. SEK, +0.73% vs. AUD, +0.48% vs. CHF, +0.38% vs. GBP, +0.27% vs. CAD, +0.19%vs. EUR.

As mentioned, U.S. Treasury yields are little changed overnight, with slight declines in the 1-month to 4-year tenors and gains in the 5- to 30-year tenors.

U.S. Equity Index futures are signaling a drop at the open of trading today. S&P 500 futures are -0.65% and Nasdaq futures are -0.90%. All major global equity indexes are trading in the red today as traders digest the possible impact of the U.S. debt downgrade.

ADP Employment Change data (released today ahead of tomorrow’s Change in Nonfarm Payrolls) was 324k vs. a 190k estimate.

Economic Calendar

USD - ADP Non-Farm Employment Change

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 143.34 142.22
eur/usd 1.1007 1.0953
gbp/usd 1.2799 1.2710
aud/usd 0.6629 0.6560
usd/cad 1.3322 1.3269
eur/gbp 0.86188 0.85844
usd/mxn 16.9872 16.8321
Equities and Commodities
S&P 500 4556.91
NASDAQ 15608
DOW 35534.7
GOLD 1948.96
SILVER 24.36

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Mark Allen


Mark Allen, a Senior Trader at the GPS Capital Markets Salt Lake City office, boasts nearly 30 years’ market trading experience, with a focus on foreign exchange. Having worked with GPS for the last decade, he adeptly manages market risk during New York trading hours. Prior to joining GPS, Mark co-managed a London hedge fund from San Diego and traded for a multinational bank in San Francisco.