S&P 500 Futures swing to green on PBOC, Evergrande news ahead of Fed
|- S&P 500 Futures pick up bids to snap four-day downtrend.
- PBOC refrains from rate change but adheres to heavy cash injection.
- Evergrande hints at coupon payment on expiry, US House backs debate over debt limit.
- Fed’s tapering eyed, China headlines may entertain intraday traders.
S&P 500 Futures take the bids around 2,355, up 0.30% intraday during the first positive daily performance on Wednesday in the last five.
The risk barometer recently benefited from headlines concerning China’s struggling real estate major Evergrande as well as the People’s Bank of China (PBOC) action. Also on the positive side was news from the US White House and concerning a vote over the debt limit.
China’s return to markets after a long weekend brought good news from Evergrande as well. The reason could be linked to the PBOC’s 110 billion yuan liquidity injection. Also, the real-estate tycoon announced the ability to pay coupons on the expiry date of September 23, which was previously feared.
Earlier in the day, the International Monetary Fund’s (IMF) Chief Economist Gita Gopinath also sounded optimistic over China’s ability to tame the fears emanating from the real-estate firm. On the same line were hopes of the extension to the US debt limit expiry the House votes 217-207 to favor temporary government funding and debt limit increase debate. Additionally, US President Joe Biden’s support to no borders at Northern Ireland (NI) favor risk appetite.
It should be noted that Bloomberg’s news stating that the European Union (EU) and the US aim to pledge more enforcement to curb China's risk, add to the market’s fears. Furthermore, the pre-Fed caution amid mixed data and previous hawkish policymakers’ comments keep traders waiting for the Federal Open Market Committee (FOMC) monetary policy meeting announcement. On the same line were news from Reuters quote the Asian Development Bank (ADB) as saying, “Developing Asia's economic rebound this year could be dented by the rapid spread of the Delta coronavirus variant.”
Amid these plays, US 10-year Treasury yields fade initial gains around 1.32% whereas the US Dollar Index (DXY) seesaws near 93.20.
Moving on, China-linked headlines may entertain traders before the Fed’s verdict.
Read: Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot
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