S&P 500 Futures trim weekly losses amid quiet Asian session

S&P 500 Futures snap three-day downtrend with mild gains.
Multiple markets are off in Asia, Europe due to Eid, local holidays.
Vaccine updates battle challenges for easy money, covid woes.
Wall Street benchmarks slumped on US CPI, US Treasury yields rallied.

Anil Panchal FXStreet

S&P 500 Futures bounces off early April lows, marked the previous day, while picking up the bids to 4,073, up 0.35% intraday, during Thursday’s Asian session.

During the initial Asian session, the US Centers for Disease Control and Prevention (CDC), approved Pfizer's use of the covid-19 vaccine in adolescents age 12 and older, putting a fresh bid under the S&P 500 Futures. The risk-on mood extends afterward amid a light calendar and empty feeds. Even so, the investors remain cautious after the latest strong support to reflation fears.

The risk barometer dropped to the multi-day low, also flashed a three-day fall, after the US Consumer Price Index (CPI) rallied to the highest since 2008 on annual basis. The run-up in the headline inflation figures pushes the US Federal Reserve (Fed) towards tapering, not to forget mentioning the challenges it raises for US President Joe Biden’s future stimulus.

To defend the Fed's ideology, Vice Chair Richard Clarida and Atlanta Federal Reserve President Raphael Bostic tried to placate bears after the CPI release but failed. Also on the sentiment-negative side was CNN’s news that leading Democratic economist Larry Summers warned the White House on the ‘overheating’ issue, which in turn raises worries for the supporters of easy money.

Read: Wall Street Close: Benchmarks down over 2.0% as bears cheer US inflation outcome

It’s worth mentioning that Japan and New Zealand recently unveiled downbeat concerns over the coronavirus (COVID-19) conditions at home and border issues due to that respectively.

While there are several challenges for the latest risk-on mood, traders seem to wait for the US markets open for fresh impulse. During that session, the US Weekly Jobless Claims and Producer Price Index (PPI) may offer an intermediate direction to investors ahead of Friday’s key US Retail Sales and Michigan Consumer Sentiment Index.

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.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.