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  • S&P 500 Futures catch a breather following the first negative daily closing in eight days.
  • Mixed messages concerning the US stimulus bill, uncertainty surrounding Japanese leadership question risk-on mood.
  • Vaccine hopes, recovery in US statistics keep buyers hopeful.

S&P 500 Futures drop to 3,498, down 0.03% on a day, amid the initial hour of Tokyo open on Tuesday. The risk barometer searches for fresh clues after stepping back from the record top of 3,524.50 the previous day.

The absence of any major data/events could be traced for the recent risk reset following the previous week’s heavy optimism, backed by the Fed’s readiness to keep the door open for further monetary easing. However, hopes that the coronavirus (COVID-19) vaccine will out soon join mixed signals concerning the US aid package to restrict the bears’ entry.

It’s worth mentioning that the absence of downbeat manufacturing data from the US and China helps market players to ignore the Sino-US tussle. The fight among the world’s top two economies recently favored Beijing after news suggesting the dragon’s ability to interfere in TikTok ruling by America.

Elsewhere, Japanese Prime Minister (PM) Shinzo Abe has retired after helping the nation for a long time while citing health reasons. Japanese Chief Cabinet Secretary Yoshihide Suga is leading the race for the next PM amid questions surrounding the future of Abenomics.

Against this backdrop, the US 10-year Treasury yields recovery 2.2 basis points (bps) to 0.713% whereas Japan’s Nikkei 225 drops 0.25%. Further, Australia’s ASX 200 and New Zealand’s NZX 50 mark over 1.5% loss even if the latest COVID-19 numbers have been upbeat.

Looking forward, manufacturing activity numbers from China and the US will join the RBA interest rate decision to direct near-term market moves. Should the data carry the latest improvement, coupled with a surprisingly positive tone from the Australian central banker, the risk-tone sentiment could regain the previous strength.

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