- S&P 500 Futures fades bounce off monthly low.
- Covid numbers from Australia, UK pose serious threat to economic recovery from early wave.
- US Senators “not that far apart” over infrastructures spending ahead of procedural vote.
- WHO’s Tedros encourages Japan for Tokyo Olympics, suggests leading economies could bring pandemic under control in months.
S&P 500 Futures refresh intraday low to 4,313, down 0.05% on a day, while snapping the previous day’s recovery moves during early Wednesday.
In doing so, the risk barometer reacts to the worsening coronavirus conditions, as well as geopolitical jitters, to battle with the US stimulus hopes.
Australia’s key states witness a considerable jump, led by Queensland, and suggests the Oz nation is likely to remain shut for more days. It’s worth noting that over 50% of the country is under the virus-led lockdown following Victoria’s announcement the previous day. Elsewhere, Tokyo reported 1,387 infections on Tuesday after marking the first below 1,000 numbers in six days whereas UK’s covid cased jumped 41% between July 14 and July 20, per Reuters.
Even so, World Health Organisation (WHO) head Tedros Adhanom Ghebreyesus back Tokyo Olympics by also saying, per Reuters, “The world's leading economies could bring covid-19 pandemic under control in months.” “We are in the early stages of another wave of infections,” added the WHO Boss Tedros.
Also negative for the market sentiment are comments from Tokyo as US Deputy Secretary of State Wendy Sherman discusses issues with South Korea and Japan. “Trilateral coordination sends a clear message to North Korea that we are together, shoulder to shoulder,” said Reuters.
On the positive side, progress over the US infrastructure spending bill, ahead of today’s procedural votes, keeps markets hopeful of another stimulus. Recently, Democratic Senator Joe Manchin hinted that sides “Not that far apart” in infrastructure talks.
It should also be noted that the coronavirus variant fears challenge the economic recovery from the pandemic’s earlier wave and hence push the policymakers to keep the easy money flowing, which in turn backs the optimists.
Amid these plays, US 10-year Treasury yields struggle to defend bounce off February lows but the Asia–Pacific equities remain positive by the press time.
Looking forward, US Senate voting on President Joe Biden’s infrastructure bill and covid updates will be the key to follow for fresh impulse. Additionally, the earnings the optimism and actual results from the US companies should be watched as well.
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