- S&P 500 Futures refreshes weekly low while attacking 3,350.
- US President Trump’s verbal attack on Tehran joins Secretary Pompeo’s warning to China and Russia to heavy the risks.
- Uncertainty over American stimulus, US-China trade deal adds to the market pessimism amid downbeat FOMC minutes.
S&P 500 Futures remain on the back foot for the second consecutive day while taking offers near 3,354, down 0.55% on a day, during Thursday’s Asian session. The risk barometer took a U-turn from February high the previous day as strong US dollar strength joined downbeat comments from the FOMC minutes. The mood stretched afterward as the famous US-Iran drama is about to restart following American President Donald Trump’s comments.
US dollar Index (DXY) bounced off 27-month low to regain 93.00 on Wednesday. The greenback gauge currently takes rounds to 93.08 while extending the earlier gains. No major clues except positions resizing after sustained downside could be spotted for the US currency’s pullback. Even so, some at the floor argue over receding coronavirus (COVID-19) numbers from New York and Florida getting along with the White House Adviser Larry Kudlow’s comments indicating further ease for the COVID-19 relief package talks as favoring the reserve currency.
Earlier during the day, American President Trump told the US intends to restore nearly all United Nations (UN) sanctions on Iran. His comments preceded the US Secretary of State Mike Pompeo’s words telling Russia and China to not meddle as they did in the recent past.
It should also be noted that the calls of rescheduling the US-China trade deal talks and recently high Aussie pandemic data, coupled with fears of a wider wave 2.0 in Europe play background music to the market sentiment. Furthermore, the latest Federal Open Market Committee (FOMC) minute mark a lack of reference to the yield curve control and could be a force behind the USD strength.
Amid all these catalysts, the US 10-year Treasury yields drop one basis point to 0.665% whereas stocks in Japan and Australia remain on the back foot by the press time.
Moving on, traders will have to pay close attention to the qualitative risk catalysts amid a light calendar. In doing so, virus updates and Iran’s response to the US, coupled with the Sino-American trade news, will be in the spotlight.
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