• US Treasury yields stay pressured ahead of the next week’s key FOMC.
  • Treasury Secretary Yellen signaled policymakers’ readiness to act.
  • Stock futures, Asia-Pacific shares remain pressured amid a light calendar day.

Market sentiment remains sour during early Friday as traders keenly await the Federal Reserve (Fed) monetary policy meeting. Adding to the risk-off mood could be the hawkish comments from US Treasury Secretary Janet Yellen as well as mixed concerns over Omicron and US-China ties.

While portraying the mood, the US 10-year Treasury yields print three-day downtrend from a two-year high, flashed early in the week, down six basis points to 1.77% at the latest. Also signaling the risk aversion is the 0.45% intraday loss of the S&P 500 Futures and downbeat performance of the Asia-Pacific shares.

It should be noted, however, that the US Dollar Index (DXY) fails to cheer the risk-off mood, down 0.08% intraday near 95.71 but the commodities are directionless at the latest.

That said, the expectations of the Fed’s signal to rate hike grew stronger after US Treasury Secretary Janet Yellen said in a CNBC interview, “Inflation rose by more than most economists, including me, expected and of course, it's our responsibility with the Fed to address that. And we will.”

In addition to the pre-Fed caution, mixed concerns over the US-China ties also weighed the market’s sentiment and the USD/JPY prices. That said, the South China Morning Post (SCMP) signaled that China’s Yang Jiechi and US national security adviser Jake Sullivan are up for a crunch meeting but no date was indicated.

Elsewhere, Reuters quotes anonymous sources to signal the People’s Bank of China’s (PBOC) further rate actions whereas Omicron concerns ease in the West but not much in the Asia-Pacific region. Additionally, Bank of Japan (BOJ) policymakers flagged inflation concerns while mixed US data seems to tame the Fed rate hike bets and possibly allow DXY consolidation of late.

Looking forward, a lack of major data/events can restrict short-term market moves but the bearish bias remains intact amid downbeat Treasury yields and pre-Fed fears.

Read: Fed Preview: Three ways Powell could out-dove markets, dealing a blow to the dollar

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD holds above 1.0700 after US inflation data

EUR/USD holds above 1.0700 after US inflation data

EUR/USD stays in the lower half of its daily range but continues to trade above 1.0700 in the early American session on Friday. The data from the US showed that the annual Core PCE Price Index declined to 4.9% in April as expected, making it difficult for the dollar to gather strength.


GBP/USD trades above 1.2600 as dollar struggles to find demand

GBP/USD trades above 1.2600 as dollar struggles to find demand

GBP/USD clings to daily gains above 1.2600 and remains on track to end the week in positive territory. The greenback struggles to attract investors after the data from the US showed that PCE inflation softened in April. 


Gold pulls away from daily highs, holds above $1,850

Gold pulls away from daily highs, holds above $1,850

Gold has lost its traction in the second half of the day on Friday and declined toward the $1,850 area. The benchmark 10-year US Treasury bond yield staged a modest rebound on the US PCE inflation data, not allowing XAU/USD to preserve its bullish momentum.

Gold News

Terra’s LUNA 2.0 support expands with Binance and Kraken welcoming the airdrop, here’s how you need to prepare

Terra’s LUNA 2.0 support expands with Binance and Kraken welcoming the airdrop, here’s how you need to prepare

Terra’s LUNA fork proposal has passed with 65.5% votes, Revival Plan 2 in action without algorithmic stablecoin UST. LUNA price could wipe out losses incurred by holders in the colossal crash of LUNC and UST. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!