Daily Pulse
One of our most accessible tools, this daily comment keeps you abreast of developments on the North American and international financial markets.
Michel Doucet
Vice-President and
Portfolio Manager
May 20, 2025
Canada
Gold rose as the dollar tumbled after Moody’s Ratings stripped the US of its last top credit rating due to ballooning debt and deficits.The precious metal has experienced swings in recent months. It suffered the biggest weekly loss since November last week on easing geopolitical tensions, after a blistering rally that saw it climb above $3,500 an ounce for the first time last month. Gold is still up by more than one-fifth this year, driven by global conflicts, Trump’s tariff spree and inflows to exchange-traded funds.
TotalEnergies SE reached a 20-year deal to buy liquefied natural gas from an export terminal being developed in Western Canada, bolstering the French energy major’s global portfolio of the fuel. The agreement calls for Total to purchase 2 million metric tons a year from the Ksi Lisims project in British Columbia.
United States
Moody’s Ratings downgraded US Treasuries to Aa1 from Aaa after the market close on Friday, citing a deepening concern that ballooning federal debt and deficits will damage America’s standing as the preeminent destination for global capital and increase the government’s borrowing costs.
The US stock market rallied on Monday despite Moody's downgrading US debt, with the S&P 500 Index finishing up 0.1% after initially declining over 1%. The bond market calmed down, with the 10-year Treasury yield falling below its starting point, giving small investors the confidence to buy the dip and drive the stock market up..
A key House committee advanced President Donald Trump's tax and spending package after Republican hardliners won agreement from party leaders to speed up cuts to Medicaid health coverage. The committee vote paves the way for passage of the legislation as soon as Thursday. The bill still faces opposition and potential changes in the full House and Senate, with disagreements over Medicaid cuts, state and local tax deductions, and clean energy credits.
Europe
European leaders are disappointed after a phone call between Trump and Putin, feeling that Trump is disengaging from diplomatic efforts to end the war in Ukraine and leaving Ukraine and its allies on their own. Trump's plan for Russia and Ukraine to negotiate directly on a framework for peace talks before a truce is in place is seen as allowing Putin to buy time, with Russia presenting maximalist demands in previous talks.Trump's comments on the conflict are seen as ambivalent, with no clear timeline for a ceasefire and no pressure on Putin.
UBS shares declined as much as 3.5%, the most since April 9, after Bloomberg News reported the lender is likely to face defeat in its effort to water down the Swiss government’s law that could force it to maintain up to $25 billion in extra capital.
Asia
Hong Kong's pension fund managers are concerned about potential forced selling of their Treasury holdings due to Moody's downgrade of US debt, as they are only allowed to invest over 10% of their assets in Treasuries if the US has a AAA or equivalent rating. The Hong Kong Investment Funds Association has flagged the risks and recommended that authorities make an exception for US Treasuries, allowing funds to invest in the assets even if they are rated one notch below AAA. The slump in Japanese bonds worsened after the weakest demand at a government debt auction in over a decade, driving up yields on 20-year, 30-year, and 40-year bonds. The surge in yields highlights structural challenges in Japan's debt market, concerns over rising government spending, and the central bank's retreat from the market, with key Japanese buyers like life insurers not filling the gap.