{"id":50709,"date":"2025-07-18T16:38:34","date_gmt":"2025-07-18T20:38:34","guid":{"rendered":"https:\/\/thestockmarketwatch.com\/stock-market-news\/financial-markets-react-to-fed-data-and-sovereign-rating-confirmations\/50709\/"},"modified":"2025-07-18T16:38:34","modified_gmt":"2025-07-18T20:38:34","slug":"financial-markets-react-to-fed-data-and-sovereign-rating-confirmations","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/financial-markets-react-to-fed-data-and-sovereign-rating-confirmations\/50709\/","title":{"rendered":"Financial Markets React to Fed Data and Sovereign Rating Confirmations"},"content":{"rendered":"<p><strong>Key Takeaways:<\/strong><\/p>\n<ul>\n<li><strong>US bank deposits saw a notable decline<\/strong>, falling by <strong>$67 billion<\/strong> to <strong>$18.251 trillion<\/strong> last week, according to the latest <strong>Federal Reserve H.8 release<\/strong>.<\/li>\n<li>Morningstar DBRS reaffirmed the <strong>AAA stable trend<\/strong> ratings for the <strong>European Stability Mechanism (ESM)<\/strong> and the <strong>European Financial Stability Facility (EFSF)<\/strong>, underscoring their robust financial architecture.<\/li>\n<li><strong>Switzerland<\/strong> also maintained its <strong>AAA stable trend<\/strong> rating from Morningstar DBRS, reflecting its strong economic fundamentals and stable public finances.<\/li>\n<li><strong>Portugal&#39;s<\/strong> credit rating was confirmed at <strong>A (High) with a stable trend<\/strong> by Morningstar DBRS, highlighting its improved fiscal performance and debt reduction efforts.<\/li>\n<\/ul>\n<ul>\n<li>\n<p><strong>US Bank Deposits Decline Amidst Fed Data Release<\/strong><br \/>\nThe latest H.8 release from the <strong>Federal Reserve<\/strong> indicates a reduction in <strong>US bank deposits<\/strong>, which decreased to <strong>$18.251 trillion<\/strong> from <strong>$18.318 trillion<\/strong> in the prior week, marking a <strong>$67 billion<\/strong> drop. This weekly data, providing insights into the <em>Assets and Liabilities of Commercial Banks in the United States<\/em>, is closely watched by financial analysts for signs of shifts in liquidity and economic activity. The Federal Reserve typically releases this data every Friday.<\/p>\n<\/li>\n<li>\n<p><strong>Morningstar DBRS Affirms AAA Ratings for European Stability Mechanisms<\/strong><br \/>\nMorningstar DBRS has confirmed the <strong>AAA Long-Term Issuer Ratings<\/strong> and <strong>R-1 (high) Short-Term Issuer Ratings<\/strong> for both the <strong>European Stability Mechanism (ESM)<\/strong> and the <strong>European Financial Stability Facility (EFSF)<\/strong>, maintaining a <em>stable trend<\/em> for all ratings. These confirmations underscore the very strong policy mandate, high capitalization, and effective risk management of the ESM, which acts as a financial backstop for euro area sovereigns. The EFSF&#39;s ratings are fully reliant on the unconditional and irrevocable guarantees from its member states.<\/p>\n<\/li>\n<li>\n<p><strong>Switzerland Maintains Top-Tier Credit Rating<\/strong><br \/>\nThe <strong>Swiss Confederation<\/strong> has had its <strong>AAA Long-Term Foreign and Local Currency \u2013 Issuer Ratings<\/strong> confirmed by Morningstar DBRS, with a <em>stable trend<\/em>. This top-tier rating is supported by Switzerland&#39;s <em>wealthy and diversified economy<\/em>, sound public finances, and strong institutional quality. Despite a challenging external environment and revised down real GDP growth forecasts for 2025 and 2026, Switzerland&#39;s prudent fiscal policy and low public debt level (projected at <strong>37.6% of GDP in 2024<\/strong>) provide significant resilience.<\/p>\n<\/li>\n<li>\n<p><strong>Portugal&#39;s Credit Outlook Remains Strong<\/strong><br \/>\nMorningstar DBRS also confirmed the <strong>Republic of Portugal&#39;s Long-Term Foreign and Local Currency \u2013 Issuer Ratings at A (high)<\/strong>, with a <em>stable trend<\/em>. This reflects Portugal&#39;s robust fiscal performance, including fiscal surpluses in 2023 and 2024, and a sharp decline in its public debt ratio from <strong>116.1% of GDP in 2019 to 94.9% in 2024<\/strong>. The rating agency expects the public debt ratio to fall below <strong>90.0% of GDP<\/strong> over the next two years, potentially placing it below the eurozone average. <em>Portugal&#39;s economic growth is anticipated to outperform the eurozone average<\/em> over the next two years, driven by healthy real income growth and increased spending from its Recovery and Resilience Plan.<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways: US bank deposits saw a notable decline, falling by $67 billion to $18.251 trillion last week, according to 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