Current Futures: Dow -10.00, S&P -0.30, NASDAQ -1.25

Asian markets closed lower, after Japan’s credit rating was downgraded. U.S. futures also declined in the first part of the day, but recovered as the market was heading towards the open of the European spot session. However, this did not stop the European markets from opening lower, again. 

A statement released by Moody’s, one of the big three rating agencies said that Japan’s foreign-currency debt was downgraded, but the yen-denominated debt was upgraded. Now both financial instruments hold an A2 rating, the third best investment grade. Trade Team notes that, even though the chances of a country like Japan defaulting on its debt are very small, the high level of indebtedness of the Japanese economy triggered the rate downgrade. Such a high level of debt related to the national GDP, the third highest in the word, is a consequence of very low interest rates held for extended periods.

On Friday, a report from the U.K.’s Office for National Statistics said that retails sales had been overstated by an error in the calculation method. According to the ONS, U.K. retail sales had been overstated by around 56% since August 2007, when the recession first began. According to the previous method, U.K. retail sales have risen strongly, providing strong support for the pound on a number of occasions. Trade Team notes that, this release certainly casts doubts on all the data released by the ONS.

Overnight, the Japanese Nikkei fell 226.33 points (2.44%) to 9,038.69. The Australian S&P/Asx declined 37.60 points (1.00%) to 3,735.60. Also during the Asian session, India’s stock markets jumped 17% and reached the daily halt limit. The U.K Ftse rose 2.94 points (0.07%) to 4,351.05, while the German Dax slipped 42.63 points (0.90%) to 4,694.87.

Crude oil for June delivery was recently trading at $56.90 per barrel, higher by $0.60.

Gold for June delivery was recently trading lower by $0.20 to $931.20.

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