S&P 500 Futures drop back towards 4,150 as covid, geopolitics test bulls

  • S&P 500 Futures part ways from Wall Street’s recovery moves.
  • US 10-year Treasury yields refresh weekly low, DXY extends Wednesday’s losses.
  • Virus resurgence in Asia joins Aussie-China, Russia-Ukraine tussles and pre-ECB trading lull to weigh on sentiment.

S&P 500 Futures print 0.20% intraday losses to revisit 4,155 level during early Thursday. In doing so, the risk barometer differs from US equity markets’ performance the previous day as ingrained risks to sentiment bounce back, coupled with some fresh catalysts, by the press time.

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Among the key catalysts were the coronavirus (COVID-19) jitters that haunt Asia. India recorded a whopping 310K new infections and Japan is up for recalling emergencies. On the same line, chatters over the requirement of third vaccine shots to gain immunity over the deadly virus also swirl and gain market attention.

Additionally, news from the Global Times suggests China’s dislike for Aussie rejection of the “Belt and Road” initiative whereas Russia warns over global meddling in its tussle with Ukraine.

Read: Fresh Aussie-China tussle, US infrastructure spending bill talks and covid woes can weigh on sentiment

On the contrary, the US efforts for smooth nuclear talks with Iran, by lifting some sanctions over Tehran’s central banks, oil exports and manufacturing, seem to battle the bears. Also on the positive side were hopes of strongest US economic growth since 1984 and the Bank of Canada’s (BOC) tapering, the first among the major central banks.

Amid these plays, the US 10-year Treasury yield refreshes weekly low with three basis points of a drop to 1.53% whereas stocks in trade mixed by the press time.

Looking forward, global traders may remain cautious ahead of today’s European Central Bank (ECB) monetary policy meeting. The ECB isn’t expected to alter current rates, neither bond purchases, but President Christine Lagarde’s press conference will be the key to watch after the BOC.

Also important will be second-tier data from the US and developments concerning the catalysts mentioned above.

Read: European Central Bank Preview: Five reasons for Lagarde to lift the euro

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