- US 10-year Treasury yields snap three-day day winning streak to stay below 0.70%.
- Cautious sentiment ahead of the US GDP, Fed Chair’s speech in the Jackson Hole challenge the market mood.
- Fears of fresh US-China tussle also weigh on the sentiment amid a light calendar in Asia.
With the market sentiment turning cautious ahead of the key data/events in the American session, the US 10-year Treasury yields drop to 0.677%, down one basis point (bp), during early Thursday. In doing so, the risk barometer drops for the first time in the week while easing from the highest levels last seen on August 14.
Other than the wait for the US second-quarter (Q2) GDP and Fed Chair Powell’s speech from Wyoming, allegations on the World Health Organization (WHO), to favor China while investigating the coronavirus (COVID-19) outbreak, also weigh on the risk-tone sentiment. The update gained momentum after the WHO recently sent only two people to seek clues of the crucial matter to China out of them none visited the epicenter Wuhan. Also adding fuel to the Sino-American tussle were Thursday’s headlines suggesting China’s missile show in the South China Sea and American policymakers’ rush to punish companies helping the dragon.
On the contrary, a lack of major data/events and the stabilization in the COVID-19 cases from Japan, China, the US and Victoria probe the bears. Furthermore, the US and China are still hopeful of the trade deal, which in turn defies all differences. Additionally, the Democratic efforts to break the US stimulus deadlock also challenge the pessimism.
Not only the US treasury yields, but other risk gauges like S&P 500 Futures and Asian stocks also flash tiring signs with the crucial catalysts ahead.
Looking forward, the second reading of the Q2 2020 GDP, expected to drop 32.9% annually versus 32.6% initial forecast and -5% prior, will precede Fed Chair’s attempt to convince markets that they are doing what’s necessary.
Read: Powell’s Jackson Hole Symposium Preview: Inflation’s virtual reality
Share
