- S&P 500 Futures probe two-day winning streak while easing from one-week high.
- Escalating tension between the US and China, rising coronavirus fears question bulls.
- Today’s FOMC minutes, US data become the key for near-term direction.
S&P 500 Futures recedes from one-week top to 3,085 amid the initial hours of Tokyo trading on Wednesday. The risk barometer closed the second quarter (Q2) with the best gains since 1992. However, traders seem to reassess the earlier risk-on mood at the start of the third quarter (Q3).
China’s passage of Hong Kong security law adds fuel to the Sino-American tension. The Trump administration canceled the special trading status of Hong Kong after Beijing’s refrain from respecting the global ire. In a reaction, the dragon nation not only threatened retaliation but also raised bars for US Secretary of State Mike Pompeo’s efforts to keep unilateral sanctions on Iran. Also weighing on the market’s mood could be the surge in the US coronavirus (COVID-19). As per the latest updates from Reuters, the US coronavirus cases rose by over 40,000 for a 5th time in the past 6 days.
It’s worth mentioning that the hopes of further stimulus and upbeat US data joined the quarter-end rebalancing to propel the US equity benchmark in recent days.
Amid all these catalysts, the US 10-year Treasury yields gain 2.4 basis points (bps) to 0.677% whereas Japan’s Nikkei 225 struggles for direction around 22,300 as we write.
Moving on, China’s Caixin Manufacturing PMI, expected 50.5 versus 50.7 prior, could offer immediate direction to the market after the official gauge of Chinese manufacturing activity offered positive surprise the previous day. It should, however, be noted that the economic calendar will be the key during the US session as it comprises of FOMC minutes, ISM Manufacturing PMI and ADP Employment Change.
Other than the economics, updates concerning the pandemic, signals for the global policymakers' actions to combat the second wave and China’s hard stand on many instances will also be the key to follow.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.