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  • S&P 500 Futures drop amid fears of fresh US-China trade war.
  • Trump administration conveys “frustration and disappointment” over trade relations with China, signals interference into Hong Kong-China issue.
  • Aussie/China data, economic restart guidelines and trade headlines in focus.

With the risk-off tone returning to the table, led by trade war fears, S&P 500 Futures decline 0.30% or 7.40 points to 2,826 during the initial Asian session on Thursday.

Not only US President Donald Trump’s warning over the US-China trade deal but the White House Statement also suggests that the world’s two biggest economies are again at loggerheads.

Also likely to escalate the tension could be US Secretary of State Mike Pompeo’s readiness to check whether Hong Kong enjoys sufficient autonomy from China or not.

Elsewhere, Germany and Pacific nations are inching closer to the much-awaited economic restart after the coronavirus (COVID-19) led lockdown. It’s worth mentioning that US President Trump and UK Tories also want to join the league but are still constrained by the virus.

Amid all these catalysts, the US 10-year Treasury yields rose five basis points (bps) to 0.709% by the end of Wednesday. The reason could be traced from the Treasury Department signals to soon roll out a 20-year note to meet the safe-haven demand.

Looking forward, the economic docket is full of the trade numbers from Australia and China whereas trade/virus updates could also affect the market sentiment. Additionally, the BOE’s key monetary policy meeting and quarterly report, as well as the US Jobless Claims, are some extra indicators that can keep the traders busy during the key day.