S&P 500 Futures drop 0.50%, US T-bond yields tread water amid anxiety over Russia-Ukraine war
|- Market sentiment turns cautious as Russia’s next move eyed.
- S&P 500 Futures fades bounce off nine-month low, US 10-year Treasury yields hover around 1.97-98%.
- US data came in positive, Fedspeak was mostly upbeat but nothing mattered more than Russia-Ukraine war.
Having witnessed a volatile day on Thursday, global markets portray traders’ anxiety amid a light calendar and lack of clarity over the Russia-Ukraine issue.
While portraying the market’s indecision, the S&P 500 Futures drop 0.65% intraday to 4,256 whereas the US 10-year Treasury yields seesaw around 1.97-98% by the press time.
That said, the US equities initially tanked on the early Thursday and the US Treasury yields rallied on news that Russia invaded Ukraine and reached past border regions towards the capital. Moscow’s aggressive move pushed Western leaders towards harsh sanctions and readiness to help Kyiv with military power.
However, comments from Russia, like “Moscow is willing to negotiate the terms of Ukraine's surrender,” seemed to have triggered the late Thursday’s rebound in market sentiment. Additionally, chatters that Ukraine President Zelenskyy said they need to discuss ceasefire with Russia also favored risk sentiment previously.
Though, CNN’s news citing the Russian military’s readiness to bombard Kyiv, as well as comments from Ukrainian Envoy to Japan who conveyed that the Ukrainian government lost control over Chernobyl nuclear plant, are likely catalysts that recently weigh on the market’s mood.
Elsewhere, the second reading of the US Q4 GDP matched 7.0% annualized forecasts but firmer figures of Personal Consumption Expenditure, Chicago Fed National Activity Index and Jobless Claims seemed to have added to the US dollar’s strength.
Also, comments from Atlanta Fed President and FOMC member Raphael Bostic and Richmond Fed President, as well as an FOMC member, Thomas Barkin, seemed to have additionally favored the USD bulls. However, Cleveland Fed President Loretta Mester said that she doesn't think raising interest rates by 50 bps in March is compelling. On the contrary, Federal Reserve (Fed) Governor Christopher Waller said on Friday, he still believes a 50-basis points (bps) March rate hike is a possibility if the economic data comes in stronger.
Looking forward, geopolitical updates from Russia-Ukraine are the key catalyst for the market. Also important will be the Fed’s key inflation gauge, namely Core PCE Price Index, as well as Durable Goods Orders, for January.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.