S&P 500 Futures, US Treasury yields portray market’s anxiety ahead of Fed Chair Powell’s testimony

Markets remain dicey as traders await top-tier events amid mixed feelings.
US Treasury bond yields remain sidelined after the week-start zigzag, S&P 500 Futures print mild gains around two-week high.
China-linked news, recent improvement in US data probe previously optimism.
Fed Chair Jerome Powell needs to defend hawkish stance amid policy pivot chatters.

Anil Panchal FXStreet

Global traders portray the typical pre-event caution as multiple top-tier catalysts loom for release during early Tuesday. Adding strength to the market’s inaction could be the mixed signals from the US and China, as well as the month-start anxiety.

While portraying the mood, S&P 500 Futures print mild gains around a two-week high marked the previous day, up 0.15% intraday near 4,060 at the latest. It’s worth noting that Wall Street closed mixed the previous day. Elsewhere, US 10-year Treasury bond yields initially dropped to a one-week low of 3.897% on Monday before ending the day with mild gains near 3.96%, staying around the same level by the press time. On the same line, the two-year counterpart ended Monday’s North American trading session with 0.60% intraday gains at 4.88%, mostly unchanged at the latest.

An improvement in the US Factory Orders for January, to -1.6% MoM versus -1.8% expected and -1.7% prior, appeared to have triggered the rebound in the US Treasury bond yields after an initial pullback on Monday.

Elsewhere, the fears emanating from the likely Sino-American tension, due to the anticipated meeting of the US and Taiwanese Officials, join recent doubts about the Fed’s hawkish move to challenge the traders ahead of the key events. Additionally probing the optimists could be the Financial Times (FT) headlines suggesting China’s lowest growth target in decades signals a new era of caution.

During the last week, the softer prints of the second-tier US data, including ISM PMIs, Consumer Confidence and Durable Goods Orders joined comments from Atlanta Fed President Raphael Bostic to renew concerns about the policy pivot and favored the risk-on mood.

Looking forward, Federal Reserve (Fed) Chairman Jerome Powell appears before the Senate Banking Committee on Tuesday and will be eyed for clear directions. The policymaker should defend the US central bank’s hawkish bias to keep the bears hopeful ahead of Friday’s US jobs report. Also important is monetary policy decision from the Reserve Bank of Australia (RBA) and China’s trade numbers for February.

Also read: Forex Today: Markets remain choppy as Powell takes centre stage

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.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.