US T-bond yields, S&P 500 Futures portray indecision over Russia, Fed

US Treasury yields, stock futures portray market’s fragile risk profile on doubts over Russia’s military moves.
Fed’s silence on 0.50% rate-hike for March also weigh on sentiment.
Second-tier US data, updates from G20 gathering and Fedspeak will offer additional directions.

Anil Panchal FXStreet

Market sentiment turned sour during early Thursday as traders recheck previous risk-positive catalysts concerning Russia, as well as react to the latest Federal Open Market Committee (FOMC) Minutes.

While portraying the mood, the US 10-year Treasury yields dropped 1.5 basis points (bps) to 2.03% whereas S&P 500 Futures decline 0.15% at the latest. It’s worth noting that the US Dollar Index (DXY) pauses the earlier two-day downtrend around weekly low whereas gold witnesses a pullback due to the downbeat risk profile.

Doubts over the Russian confirmation of calling back the troops from the border join the Fed policymakers’ resistance to back the 0.50% rate hike in the March meeting to weigh on the risk appetite of late.

Earlier, a Senior Western Intelligence official joins Ukrainian President Volodymyr Zelenskyy to challenge arguments that Moscow military retreats from the border. Recently, an update from an Estonian diplomat suggests that Russia moves more military battalions towards the area near Ukraine and has also built a road and working on a bridge to soften the transport.

On other hand, the FOMC Minutes showed hawkish concerns among the board members even if marking no strong support for a 0.50% rate hike in March. “Federal Reserve officials agreed last month that it was time to tighten monetary policy, but also that decisions would depend on a meeting-by-meeting analysis of data, according to minutes of the most recent policy meeting,” reported Reuters.

It’s worth noting that US Retail Sales and Industrial Production rose notably beyond the market forecasts and previous readouts with the latest MoM figures of 3.8% and 1.4% respectively in January. The same raises prospects of the Fed’s rate-hike and also highlights the latest disappointment over the policymakers’ refrain to act.

Elsewhere, news that US President Joe Biden’s administration is up for actions against China, to address the shortfall in phase 1 deal commitments, also challenges the market sentiment.

Looking forward, the second-tier US economics, mainly the housing market numbers, jobless claims and Philadelphia Fed Manufacturing Survey, will decorate the calendar. However, major attention will be given to Fedspeak and updates from G20, not to forget Russia-Ukraine news, for clear direction.

Read: Forex Today: Unimpressive Fed, escalating geopolitical tensions

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.

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