|

S&P 500 Futures track US Treasury yields to south ahead of Powell–Yellen duet

  • S&P 500 Futures fail to extend previous day’s recovery moves, part ways from Wall Street gains.
  • Cautious sentiment ahead of key testimony, West vs China tussle dampens the mood amid a light calendar.
  • Early signals suggest no challenges to further stimulus.

S&P 500 Futures print mild losses of 0.15% while stepping back to 3,925 during early Tuesday. The risk barometer flips in favor of the bears while ignoring losses of the US Treasury yields ahead of Congressional testimony by Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen.

Read: Wall Street Close: Tech outperforms amid strong start to the week

Other than the pre-event cautious sentiment, geopolitical fears from the Western tussle with China, over Xinjiang human rights violation, also weigh on the sentiment. The alliance includes American, Europe, Canada and the UK to battle Beijing with sanctions over key diplomats.

During his prepared remarks for the testimony, Fed’s Powell signaled that the US economic recovery is far from complete and needs a stimulus boost, which the Fed is ready to provide “as long as required”. On the other hand, Treasury Secretary Yellen sounds optimistic over the employment scenario while eyeing full employment in 2022 but also campaigns for easy money.

Coronavirus (COVID-19) updates and vaccine jitters, coupled with the Chinese claim of a stronger economy, also try to offer an active session in Asia but all fail as traders await the US event, scheduled for late Tuesday.

Although the easy money is almost ready to be backed, market players are more interested in hearing about the reflation fears and odds of tapering to recall the bond bears. In absence of which, sentiment can turn positive.

Author

Anil Panchal

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.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.



USD/JPY retakes 158.00 as USD stalls the post-FOMC corrective slide

USD/JPY attracts some dip-buyers during the Asian session on Thursday, climbing back above 158.00 as the US Dollar reverses part of the post-FOMC pullback from a two-week high. Bulls, however, await key US macro data – the Advance Q3 GDP and the PCE Price Index – before positioning for further gains. Focus will then shift to the crucial BoJ policy update on Friday amid firming expectations for a December rate hike.

Gold remains sidelined just above $4,000

Gold leaves behind the recent three-day positive streak and faces renewed selling pressure near the $4,000 mark per troy ounce on Thursday. The precious metal’s daily decline comes amid marginal gains in the US Dollar and mixed US Treasury yields, while crude oil prices remain on the back foot.

Top Altcoins Price Forecast: Ripple and Solana under pressure as Hyperliquid recovers

Ripple is down over 2% on Thursday, extending losses below $1.30 and capped below crucial moving averages. Solana drops 2% so far, testing its 200-day EMA and the $100 psychological level amid mounting selling pressure.

BoJ preview: Hawkish hold

Having hiked rates by 25bp to 1.25% in September, the central messages from the BoJ were largely similar; upside price risks remained, real interest rates were still negative and further policy rate hikes should be expected.

A hot US economy is supposed to sink Gold. It didn't. Here's why
Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.