S&P 500 Futures flirt with record top as markets await Fed amid subdued session

S&P 500 Futures portray market’s cautious mood amid a quiet session, off in Australia and China.
Pre-Fed trading lull joins absence of surprises from G7 to add to the sluggish sentiment.

Anil Panchal FXStreet

S&P 500 Futures wobble around all-time high, flashed on Friday, as taking rounds to 4,238-40 amid early Monday.

The risk-barometer jumped to the record top the previous day as strong US data and chatters over further stimulus favored the bulls. However, a lack of major catalysts and indecision over the Fed’s next moves recently cap the equity derivative’s performance. Also acting as a filter is the extended weekend in Australia, China and Hong Kong.

Given the strong US data posing serious challenges to the Fed’s rejection of tapering, not to forget considering the price pressure as temporary, this week’s Federal Open Market Committee (FOMC) becomes the key. It’s worth noting that monetary policy adjustment, or the strong hints of the same, by the Bank of Canada (BOC) and the Bank of England (BOE) also pushes the US monetary policymakers to act. Even so, the nascent stage of recovery and fears of equity market rout, not to forget the latest challenges due to the Delta variant of the covid, probes the US central bank policymakers to remain cautious.

Also acting as a filter to the market moves could be an absence of any surprises from the Group of Seven (G7) meeting. While offering a gist of the G7 verdict Reuters said, “The G7 singled out China in their communique for human rights in Xinjiang, demanded freedoms and a high degree of autonomy for Hong Kong, and said a full investigation was needed into the origins of the novel coronavirus. The Group of Seven rich nations promised to tackle China's growing influence, fight climate change, get more COVID-19 jabs to poor countries and keep up their economic stimulus programs at their first summit since Joe Biden became US President.”

Amid these plays, US 10-year Treasury yields remain wobble around 1.46% whereas the US dollar index (DXY) keeps Friday’s recovery moves near 90.55, up 0.07% intraday.

Looking forward, a lack of major data/events, coupled with a cautious mood, keeps investors at bay. However, updates over US President Joe Biden’s infrastructure spending plan and covid may entertain intraday traders.

Also read: Gold Price Analysis: XAU/USD remains pressured around $1,870 as pre-Fed caution backs USD strength

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.

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