Optimism evaporates on possible halt to 90-day tariff pause [Video]

The week starts with a jump in US yields and a weaker dollar after Moody’s downgraded the US credit rating from the top Aaa to Aa1, citing concerns about the US’ rapidly rising debt toward the $37 trillion mark. The Treasury Secretary Scott Bessent downplayed the downgrade and attempted to shift attention to the sharp tariff hikes that may be announced in the next two to three weeks.

This means that the market optimism seen just a week ago — following an agreement between the US and China to talk while lowering tariffs during a 90-day window — is losing strength.

In Asia, the week begins with losses across major indices. Gold, franc, yen and euro are up, index futures are under pressure.

On the economic calendar, both China and Australia are expected to cut rates this week to counter the fallout from trade uncertainties. Meanwhile, UK inflation data out Wednesday is expected to show a sharp increase in headline CPI. Flash PMI data on Thursday will offer a sense of field-level sentiment.