FxWirePro: Daily Commodity Tracker - 21st March, 2022 
The Australian government bonds rallied Tuesday after S&P announced that it has cut the UK’s sovereign credit rating to AA, from previous AAA. The yield on the benchmark 10-year Treasury note, which moves inversely to its price fell more than 6 basis points to 1.995 percent and the yield on short-term 2-year note dipped more than 1 basis point to 1.575 percent by 05:00 GMT.
The S&P announced that it has cut the UK’s sovereign credit rating to AA, from previous from AAA. According to S&P, the outcome of the UK’s EU referendum will lead to less predictable, stable, and effective policy framework in the UK.
The S&P, an American financial services company also added that they have reassessed their view of the UK's institutional assessment and now no longer consider it strength in their assessment of the rating.
Moreover, US Fed Funds futures discount a 9 percent chance of a 25 basis points rate hike by end-year and a 24 percent chance of a rate cut by the September FOMC meeting, according to Bloomberg calculations.
Markets will remain keen to focus on the US final first quarter Gross Domestic Product (GDP). The final 1Q16 Commerce Department GDP release is on Tuesday, 28 June at 12:30 GMT. Despite the overall slowdown in activity following the weaker performance seen to finish off 2015, we expect to see upward final revisions leading to an overall GDP increase of +1.0 percent for 1Q16, versus the +1.4 percent increase seen in 4Q15.
Alongside weaker support from personal consumption, the real impetus for weaker performance in 1Q16 stems from milder support from services, alongside weaker performance from net exports and inventories (accounting for recent downward pressure), each of which is likely to find renewed momentum over the course of 2016. On balance, there is likely to be some lingering sluggishness in the US economy as the consumer remains somewhat constrained, gradually abating as employment conditions and business activity improve. Accordingly, we expect to see some further deceleration, yielding an overall increase of +1.0 percent in the final release.
Meanwhile, the benchmark Australia's S&P/ASX 200 index was trading up 1.02 percent, or 51 points, at 5,055 by 05:00 GMT.
