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S&P 500 Futures, yields struggle but Nikkei 225 rises 3.5% ahead of Russia-Ukraine peace talks

  • Market sentiment turns cautious ahead of the key data/events.
  • S&P 500 Futures fail to track Wall Street gains, US 10-year Treasury yields pause three-day trend.
  • Japan’s Nikkei 225 bounces off 16-month low with the biggest daily gains since June 2020.
  • Diplomats from Russia, Ukraine will meet for negotiations in Turkey, US CPI, ECB are important too.

Risk appetite struggles to find a suitable base during early Thursday on the market’s anxiety ahead of the key peace talks in Ankara and the US inflation data, not to forget the ECB meeting. Also challenging the sentiment could be a light calendar in Asia and mixed macros of late.

While portraying the mood, the S&P 500 Futures and the US 10-year Treasury yields fail to extend the previous day’s gains by the press time. It’s worth noting that Wall Street cheered hopes of easing Russia-Ukraine tussles while the US benchmark yields rose eight basis points (bps) to 1.95% at the end of Wednesday’s North American session.

It should be noted that the risk-on mood drowned prices of gold and crude oil before the latest sidelined performance.

That said, Nikkei 225 snaps a four-day losing streak to rebound from the lowest levels since November 2020. The benchmark equity index from Japan also rises the most  in 21 months by the press time, up 3.5% around 25,560.

Ukrainian President Volodymyr Zelenskyy’s readiness to compromise, if Russia does the same, seemed to have boosted the market’s mood on Wednesday. Previously, Ukraine’s dumping of a plan to join NATO and the start of the first human corridor to evacuate Ukrainian civilians helped to improve the mood.

On the contrary, Russian State Media mentioned that the Russian delegation at peace talks with Ukraine will not concede anything. Furthermore, the White House (WH) confronted the allegations that the US used chemical or biological weapons in Ukraine.

Elsewhere, US inflation expectations also retreat from record top and tease US dollar hawks as markets stay divided over the Fed’s 0.50% rate-hike in March. The inflation gauge, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, refreshed record top to 2.9% before stepping back to 2.84% by the end of Wednesday’s North American trading session.

To sum up, traders remain anxious and hence refrain from major moves, except for Asian equities, which in turn highlights today’s talks between Russia and Ukraine, as well as the US Consumer Price Index (CPI) for February for clear direction. Also important is the monetary policy meeting of the European Central Bank (ECB).

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.

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