S&P 500 Futures decline, yields stay firmer as inflation woes weigh on sentiment ahead of US NFP

  • S&P 500 Futures track Wall Street’s losses, US Treasury yields pick up bids near late 2018 levels.
  • BOE bolstered risk-off mood amid hopes of surge in inflation and challenges to growth.
  • Recently mixed data from US, China joins other risk catalysts to underpin demand for safe havens like the US dollar.
  • US NFP is likely to ease in April but broadly robust employment scenario can defend greenback bulls.

Having witnessed an entertaining show of risk-aversion, market sentiment remains sour during early Friday as the previous concerns surrounding inflation and growth challenge the post-Fed optimism.

While portraying the risk-off mood, S&P 500 Futures drop back towards the yearly low marked earlier in the week, down 0.33% at the latest, whereas the US 10-year Treasury yields rose one basis point (bps) to 3.08%, surrounding the highest levels since late 2018 marked on Thursday.

After the Bank of England’s (BOE) double-digit inflation forecast, the Reserve Bank of Australia’s (RBA) quarterly Monetary Policy Statement also propelled inflation fears by drastically raising the expectations for 2022 and 2023 in its latest release. Also highlighting the price pressure are the Tokyo Consumer Price Index (CPI) data from Japan.

Hence, inflation is the key challenge to the global market and can stall the post-covid growth trajectory, which in turn doubts the Fed’s rejection of heavy rate hikes amid expectations of easing pain over time.

As a result, the rush to risk-safety renews the US dollar buying and weigh on the gold, as well as Antipodeans. It should, however, be noted that oil prices refrain from more downside as geopolitical fears surrounding the EU’s oil embargo on Russia and the OPEC+ plan to stay on the previous output hike policy favor energy buyers.

Looking forward, market players will pay close attention to the US employment data as Fed eyed a pause in the robust Nonfarm Payrolls (NFP), expected to ease to 391K from 431K. Also important will be the US Unemployment Rate which may also decline to 3.5% from 3.6% in April.

Also read: Forex Today: The BOE opened Pandora’s box

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.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD climbs above 1.0600 amid renewed dollar weakness

EUR/USD climbs above 1.0600 amid renewed dollar weakness

EUR/USD has gathered bullish momentum and advanced beyond 1.0600 during the American trading hours on Monday. Following the mixed data releases, the US Dollar Index extended its slide below 104.00 and fueled the pair's rally in the second half of the day.


GBP/USD reverses direction, reclaims 1.2300

GBP/USD reverses direction, reclaims 1.2300

Following a dip below 1.2250 earlier in the day, GBP/USD reversed its course and reclaimed 1.2300. The broad-based selling pressure surrounding the greenback helps the pair push higher in the American session as investors assess the latest data releases.


Gold bears gearing up for a breakout

Gold bears gearing up for a breakout

XAUUSD is slowly gaining bearish traction, with sellers now aligned at lower levels. Gold advanced throughout the first half of the day, but trimmed gains and trades near a daily low of $1,820.63, as the dollar gathered momentum ahead of the US opening. 

Gold News

Everything you need to know about Shiba Inu’s Ryoshi Vision rewards before June 29

Everything you need to know about Shiba Inu’s Ryoshi Vision rewards before June 29

ShibaSwap, the native decentralized exchange of the Shiba Inu coin project, announced the distribution of Ryoshi Vision rewards within the next 48 to72 hours from June 26, 2022.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!