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  • S&P 500 Futures consolidate the previous day’s pullback from the highest since February 20.
  • Receding virus cases from Australia and the US, coupled with vaccine hopes, could be traced for the latest shift in market sentiment.
  • Traders remain cautious amid uncertainty over the US stimulus, Sino-American tussle.
  • US CPI, RBNZ to decorate today’s calendar, risk catalysts to remain in the driver’s seat.

S&P 500 Futures keeps bounces off 3,320.12 while taking rounds to 3,333, up 0.11% on a day, during the initial hour of Tokyo open on Wednesday. The risk barometer took a U-turn from the six-month high the previous day as hopes of the American stimulus dwindled. Also joining the riks-off mood were headlines suggesting coronavirus (COVID-19) resurgence in New Zealand and the US-China tension. However, the recent weakness in the Australian and the US virus statistics join the vaccine hopes to print the latest pullback in the market’s risk gauge.

Australia’s Victoria recently registered 410 new cases with 21 deaths while figures from American stay mostly constant near 50,000 a day. Further, US President Trump said, during his daily press conference, to reach a deal with Moderna for 100 million doses of vaccine. The Republican leader also highlighted that three vaccine candidates now in phase 3 trials. Elsewhere, the news that the New Zealand government is considering wage subsidy if the latest lockdown extends also helped the risk-tone sentiment to reimburse the previous day’s losses.

On the contrary, update from the Fox Business News suggested that the American policymakers haven’t yet started to re-discuss the COVID-19 relief bill challenge the market sentiment. Moving on, the US-China tension is likely to escalate as Trump administration eyes terming goods from Hong Kong as “Made in China” after sanctioning 11 diplomats from the Asian major and turning down the phase one deal’s importance.

Other than the S&P 500 Futures, the US 10-year Treasury yields also suggest the shift in the mood as it drops 2.8 basis points (bps) after rising over seven bps the previous day. It’s worth mentioning that stocks in Japan and Australia, the Asia-Pacific leaders, print mild losses by the press time.

Looking forward, the RBNZ meeting will be the key immediate catalyst ahead of the US Consumer Price Index (CPI) data for July. While the RBNZ is likely to announce a dovish halt, US CPI may recovery to 0.8% on a YoY basis. It’s worth mentioning that the virus updates, US relief package news and Sino-American tension can offer background music to the market sentiment.