S&P 500 Futures drop over 1.0%, off two-month top, amid trade war fears

S&P Futures drops as US-China trade war fears join coronavirus worries.
Downbeat US data, a lack of virus cure and no strong sign of economy restart add to the risk-off sentiment.
Second-tier US data will decorate the economic calendar, qualitative catalysts remain as the major drivers.

Anil Panchal FXStreet

While stepping back from the highest since March 06, S&P 500 Futures drop 30 points to 3,872, down 1.10% on a day, during the Asian session on Friday.

The Futures linked to the US equity benchmark suggest the risk-off is gaining momentum after US President Donald Trump renewed US-China trade war fears. The Republican leader earlier mentioned that the US trade deal with China has been “upset very badly” by the coronavirus while his latest threats to use tariffs were harsh on the trade sentiment.

Also weighing on the market’s risk-tone could be NIKKEI forecast suggesting Japan’s GDP to recall World War II levels as well as signs of lockdown extension from the Asian nation.

Earlier, the ECB failed to take a bold move despite showing concerns over the coronavirus (COVID-19) carnage. On the economic front, Eurozone GDP and the US Jobless Claims, together with the Chicago Fed Manufacturing Index, flashed downbeat figures and added strength to the risk aversion. It’s worth mentioning that Wall Street benchmarks closed the April month on a negative side with near 1.0% losses on Thursday.

Amid all these plays, US 10-year Treasury yields seesaw around 0.63% whereas Japan’s NIKKEI begins the day with over 1.30% loss while declining below 19,900.

Given the fresh trade-war fears adding to the market’s worries, a light economic calendar in Asia will keep news/updates on the virus/trade on the driver’s seat.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

160.80: Japanese Yen remains close to nearly two-year lows

USD/JPY inches lower after four days of gains, trading around 160.60 during the Asian hours. The USD/JPY pair surged to 160.80 the previous day, marking its highest level since July 2024 and significantly heightening speculation that Japanese authorities could soon intervene to support the struggling Yen.

Australian Dollar remains in positive territory after paring recent gains

AUD/USD pares its daily gains, remaining in the positive territory and trading around 0.7010 during the European hours. The pair appreciated as the Australian Dollar received support from prevailing hawkish sentiment surrounding the Reserve Bank of Australia’s policy outlook.

Gold retreats below $4,250 as USD benefits from hawkish Fed

Gold (XAU/USD) stays on the back foot in the second half of the day and trades in negative territory below $4,250. Although easing tensions in the Middle East help XAU/USD limit its losses, the broad-based USD strength in the Fed aftermath doesn't allow it to gain traction.

Bitcoin slips below $64,000 as hawkish Fed stance weighs on risk appetite

Bitcoin remains under pressure, extending its correction, trading below $64,000. The US Federal Reserve left interest rates unchanged but struck a hawkish tone on Wednesday, dampening the risk sentiment.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.

The next big AI trade may not be about chips or software

Artificial intelligence has already created some of the biggest winners in modern market history. Chipmakers have surged, data centre construction is booming, and electricity demand forecasts are changing globally.