- S&P 500 Futures ease from 11-week high, snaps two-day winning streak.
- US 10-year, two-year Treasury bond yields remain sluggish after the first daily loss in four.
- Fears of Taiwan invasion, hawkish Fed talks and anxiety surrounding US debt ceiling weigh on sentiment.
- Light calendar prods momentum traders; UK inflation, Fed Beige Book will be the key to watch afterward.
Market sentiment remains dicey while tracing Wall Street’s mixed close amid geopolitical fears emanating from China and Russia. Adding strength to the cautious mood are the chatters surrounding the US debt ceiling and hawkish Federal Reserve (Fed) talks.
While portraying the mood, S&P 500 Futures retreated from the highest levels since early February, marked the previous day, as it prints mild losses near 4,178 during early Wednesday. It’s worth noting that the US stock futures snap a two-day winning streak with the latest inaction.
On the other hand, the US 10-year and two-year Treasury bond coupons dropped for the first time in four days by the end of Tuesday, sluggish around 3.59% and 4.21% by the press time.
The recent chatters surrounding the US House China Committee’s discussion about the Taiwan invasion scenario and a likely drag on the US debt ceiling decision seem to exert downside pressure on the risk profile of late. On the same line could be the recently downbeat US data and hawkish Fed bets. It should be observed that mixed earnings also prod the equity buyers of late.
Recently, Netflix slumped during the aftermarket trading as earnings missed expectations.
On the other hand, the US Housing Starts and Building Permits roiled the mood with downbeat prints for March on Tuesday. That said, the Housing Starts eased to 1.42M versus 1.432M prior and 1.40M market forecasts whereas the Building Permits dropped to 1.413M from 1.55M previous readings and analysts’ estimations of 2.2M.
Furthermore, St. Louis Federal Reserve President James Bullard said on Tuesday, in an interview with Reuters, “Interest rates will need to continue to rise in the absence of clear progress on inflation.” On Monday, Richmond Fed President Thomas Barkin said that he wants to see more evidence of inflation settling back to target. Recently, Atlanta Fed President Raphael W. Bostic who recently mentioned that the economy is still gaining momentum, but inflation is too high.
Elsewhere, Bloomberg released news suggesting China’s role in the Russia-Ukraine war joins US President Joe Biden’s resistance in negotiating debt limit to also weigh on the sentiment.
Amid these plays, WTI crude oil picks up bids to print mild gains above $81.00 while the Gold price struggles around $2,005 amid the inactive US Dollar Index.
Moving on, the monthly release of the Fed’s Beige Book and the UK inflation may entertain traders while the last week of Federal Reserve (Fed) officials' comments before the blackout period, starting from this Saturday, as well as the China talks, will be key to watch for fresh impetus.
Also read: Forex Today: Dollar slides amid quiet market conditions
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 stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.