Market Update - May 24, 2017

Moody's downgrades China one notch to an A-1 rating, warns of eroding financial strength as debt rises - http://reut.rs/2qeXxDN. First downgrade since 1989. Market reaction has been relatively muted so far. The rating agency already had China on a negative outlook so the move was not entirely a surprise but perhaps the timing was earlier than expected. AUD sold off on the news but regaining through the balance of the session. NZD outperformed in G10 after exports hit a new high in April. The rest of the pack remained relatively consolidative around the closes. No earth shattering data today but we do have Draghi speaking at 8:45 EST, Bank of Canada at 10 am EST and the FOMC minutes this afternoon which will be dissected for clues on rate hikes and balance sheet adjustments.