S&P 500 Futures repeat pre-Fed trading lull amid cautious optimism

S&P 500 Futures eases from the record top flashed on Tuesday.
Vaccine hopes join IMF’s upbeat economic growth forecast but traders turn cautious before FOMC.
Aussie CPI, China’s Industrial Profit flashed mixed signals to add to market’s confusion.

Anil Panchal FXStreet

S&P 500 Futures drop to 3,841, down 0.02% intraday, during Wednesday’s Asian session. The risk barometer refreshed record top the previous day as comments from US President Joe Biden and global vaccine manufacturers favored risks. Also supporting the mood was an upwardly revised global growth forecast by the International Monetary Fund (IMF). Though, trader’s caution before 2021’s first Federal Open Market Committee (FOMC) decision joins mixed economics to challenge the market moves.

Following signals that the covid variants can be cured by global vaccine producers and there are welcome results of vaccinations, US President Biden’s comments suggesting sooner immunization backed the risk-on mood. That said, the US government is up for increasing its vaccine purchase from Moderna and Pfizer, the New York Post said.

Read: US President Biden: Recently discovered that vaccine program is in worse shape than we expected

On the contrary, uncertainty over Biden’s $1.9 trillion fiscal stimulus and ex-US President Donald Trump’s impeachment challenge the mood while joining hands with the typical pre-Fed trading lull.

Also testing the market optimism were mixed data concerning Australia’s inflation and sentiment as well as China’s Industrial Production. During early Asia, Australia flashed better-than-forecast Consumer Price Index (CPI) data for the fourth quarter (Q4). Though, soft Business Confidence from the National Australia Bank (NAB), following Westpac Leading Index, spoiled the mood. It should be noted that China’s Industrial Production for December grew 20.1% YoY versus 15.5% prior.

Other than the S&P 500 Futures, the US 10-year Treasury yields and stocks in Asia-Pacific also portray the market’s indecision ahead of the key event, namely the US Federal Reserve’s monetary policy decision.

Read: Fed Preview: Fearing market froth or boosting Biden's stimulus? Three scenarios

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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