Key Takeaway: Moody's downgraded Southern Water to junk status , citing financial and operational underperformance, compounding the broader issues facing the UK water sector. Southern Water Ltd’s credit rating was downgraded to junk by Moody’s , with a warning of potential further cuts due to its weak performance history and financial challenges. This downgrade impacts the company’s ability to raise the £4 billion in new debt and £650 million in equity required for its capital plans. The UK water industry is facing heightened scrutiny due to concerns over chronic leaks, sewage spills, and high-interest rates. Southern Water, which supplies over two million people in England, could face severe penalties from the regulator Ofwat , which may limit funds for essential upgrades. Following the downgrade, Southern Water’s 2026 bonds dropped 2.7 pence to around 85 pence on the pound. Despite the rating cut, Southern Water assured customers that services would continue unaffected, hig
Asian shares dipped on Thursday, weighed down by weak Chinese markets. Meanwhile, US bond yields climbed, pushing the dollar higher as investors evaluated inflation expectations and policy direction in the US.
Bitcoin steadied above $90,000, fueled by optimism around Donald Trump’s presidency, seen as favorable for cryptocurrencies. Bitcoin was last trading at $90,151, up 1.7%, having gained over 30% in the last two weeks.
Investors are speculating on Federal Reserve rate cuts next month following a recent inflation report. However, Trump's anticipated policies of tax cuts and higher tariffs could raise inflation, limiting the Fed's flexibility in 2025. With Republicans projected to control Congress, Trump’s agenda could move forward largely unopposed.
In Asia, China’s latest economic support measures fell short of investor expectations. The country’s property sector remains weak, with tax incentives on home and land transactions failing to boost sentiment.
Longer-dated US bond yields rose, with the 10-year treasury yield peaking at 4.483%, while the 30-year yield reached a five-month high. Despite bets on a Fed rate cut in December, the dollar strengthened, gaining 0.24% against the yen and pushing the euro to a one-year low.
In other markets, Chinese stocks saw declines, with the CSI300 index down 0.16% and the Hang Seng Index dipping 0.34%. Japan’s Nikkei reversed early gains to close down 0.14%. In commodities, oil prices fell, with Brent crude at $72.15 a barrel and spot gold declining 0.42% to $2,562.25 per ounce.
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