- US 10-year Treasury yields struggle to defend the bounce off multi-day low, S&P 500 Futures rebound from six-week bottom.
- VIX at yearly high as Omicron fears escalates, Fed flashes mixed signals.
- Friday’s jobs report, virus updates are the key for fresh impulse.
With a lack of clarity over the Fed’s next move and the fears of the South African variant of covid, market players remain divided during early Thursday.
While portraying the mood, the US 10-year Treasury yields lick their wounds at the lowest levels since early October, around 1.42% after refreshing multi-day bottom with 1.40% level the previous day. Alternatively, S&P 500 Futures print rises 0.35% to 4,523. Above all, DBC’s Volatility Index (VIX) stays firmer around the yearly top, around 7.13 at the latest.
Looking at the catalysts, Fed Chair’s Jerome Powell’s step back from the previously hawkish testimony could top all. Federal Reserve (Fed) Chairman Jerome Powell reiterated his inflation fears but also said he still believes inflation will come down “meaningfully” in the second half of 2022, during testimony against a Senate Commission. On the contrary, Federal Reserve Bank of New York President John C. Williams said, per New York Times, that Omicron could prolong supply and demand mismatches, causing some inflation pressures to last. Further, Cleveland Fed President Loretta Mester hints at speeding up the taper and likely rates in the next year, per Bloomberg.
Elsewhere, the first Omicron case in the US pushed President Joe Biden’s administration to extend the rules for wearing a mask in public transit.
It’s worth noting that Reuters recently ran a story citing more Chinese developers’ raising bond issues to mark the evidence Beijing is marginally easing liquidity strains on the cash-strapped sector.
Amid all these plays, the Organisation for Economic Co-operation and Development (OECD), suggesting the world GDP growing by 5.6% (previous 5.7%) in 2021, 4.5% in 2022, 3.2% in 2023, per Reuters.
Looking forward, a lack of major data/events may keep restricting the market moves but the yields and the US dollar may witness further pains should Friday’s US Nonfarm Payrolls (NFP) disappoint. That said, US ADP Employment Change and ISM Manufacturing PMI details for November ticked above market consensus of 525K and 61.0 respectively to 534K and 61.1 in that order.
Read: US nonfarm payrolls take center stage after Powell’s hawkishness
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.