S&P 500 Futures snap five-day downtrend ahead of Powell speech
- S&P 500 Futures bounce off 12-day low amid the quiet session.
- Unlock chatters join hopes of US stimulus to extend risk-on mood.
- Powell’s bi-annual testimony will be the key amid the rising reflation fears.
S&P 500 Futures eye to regain the 3,900 threshold while picking up bids near 3,882, up 0.20% intraday, during early Tuesday. In doing so, the risk barometer reacts to the latest talks surrounding the recalling of virus-led activity restrictions from Australia’s Victoria and Japan’s Tokyo. Also on the positive side could be the progress on the US covid relief package.
Australia’s Victoria is up for removing the post-coronavirus (COVID-19) resurgence lockdown while leaders from surrounding areas to Tokyo ask for receding the virus-led emergency as the vaccination gears up and the COVID-19 numbers drop off-late.
Elsewhere, the US policymakers are bracing for the much-awaited fiscal package wherein Senator Joe Manchin recently offered a push, per CNN’s Manu Raju. The news report tweets, “Sen. Joe Manchin, a key Democratic swing vote, told me that he would try to amend the covid relief package with a federal minimum wage hike to $11 an hour, a move he argues will allow the party to get behind a compromise with many Dems pushing $15 hike. Manchin said that he would make that move if parliamentarian finds wage hike within rules of reconciliation. ‘I would amend it to $11,’ he said. ‘We can do $11 in two years and be in a better position than they're going to be with $15 in five years.’”
It should be noted that the reflation fears dominate ahead of Fed Chair Jerome Powell’s half-yearly testimony as to the global Treasury yields rally. Although Japan’s off restricts the US bond trading early in Asia, the coupons jumped to a one-year high the previous day. The same challenges the equity bulls amid fears of liquidity exhaustion and toll on spending.
Amid these plays, stocks in Asia-Pacific remain lackluster while commodities and Australian dollar gain bids off-late.
Moving on, global markets may remain tepid amid a lack of major data and wait for the Fed Chief’s magical words. However, nothing major positive is expected from the event for the US dollar bulls.
Read: Dollar outlook: How will surging treasury yields affect Powell’s testimony
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.
