- US 10-year Treasury yields remain pressured around seven-day low.
- S&P 500 Futures print mild losses after rising for five consecutive days.
- Covid, geopolitics and indecision over central bank moves challenge the sentiment.
- US Retail Sales data, Fed Chair Powell’s speech eyed for fresh impulse.
Global market players await fresh clues to extend the week-start downbeat performance, mainly backed by the risk-off mood. While a light calendar in Asia and almost dead news feed could best be blamed for the latest inaction, traders’ wait for the US Retail Sales and speech from the US Federal Reserve (Fed) Chairman Jerome Powell could also be linked for the lackluster moves.
That said, the market’s risk barometers, namely the US Treasury yields and stock futures, portray the sluggish momentum amid Tuesday’s Asian session.
The US 10-year Treasury yields pause around one week low of 1.258% after declining for the last two days. Further, the S&P 500 Futures step back from the all-time high to 4,466, down 0.17% intraday by the press time.
It should be noted, however, that the fears of Delta covid variant damping the global economic transition off the pandemic become a major concern for the markets. Also challenging the risk appetite is the Taliban’s takeover of Kabul and US President Joe Biden’s recent fears of such activities spreading out of Afghanistan, if not controlled, challenge the market sentiment.
A lack of clear signal for the future moves by the key central banks, except for the RBNZ, adds to the market’s pessimism whereas recently downbeat data from the US and China, the world’s top two economies also challenge the optimists.
While the risk-off mood isn’t out of the woods, the US Dollar Index (DXY) struggles to consolidate the heaviest fall in two months around 92.52.
Hence, today’s US Retail Sales, expected -0.2% versus +0.6% prior, will be the key, followed by a speech from Fed Chair Jerome Powell at an online town hall event.
Should the US data keep portraying the virus-led side-effects, coupled with Powell’s defense to the easy money, safe-havens like the US dollar and Japanese yen may gain. On the contrary, Antipodeans and commodities should look for further recovery moves should the data prints positive outcome.
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