- S&P 500 Futures extends pullback from the weekly high of 3,256.
- Fed showed readiness to pump the markets, cited need of fiscal measures amid coronavirus woes.
- US policymakers jostling over the phase 4 aid package, Senate Leader McConnell hopes to clinch unemployment claim deal on Friday.
- US GDP becomes the key event of the day, virus updates, stimulus headlines shouldn’t be ignored.
S&P 500 Futures drop to 3,248.88, down 0.11%, during the initial hour of Tokyo open on Thursday. The derivative weighs down as markets turn cautious after the Fed cited coronavirus (COVID-19) risks while conveying its bearish bias the previous day. Also weighing the risk barometer is the lack of agreement among the US policymakers on the much-awaited fiscal package.
Read: Breaking: Fed leaves policy rate unchanged, USD weakens modestly with initial reaction
During the early-Asia, White House Chief of Staff Mark Meadows said that the Senators are nowhere close to the deal. Though, the Senate Leader Mitch McConnell, later on, said he hopes of mark agreement on the jobless claims benefits before they expire on Friday. Even so, the huge difference between the US political parties’ bids for the total amount, Democrats are up for $3.5 trillion whereas Republicans propose a $1.0 trillion bundle of help, could derail the final talks.
Elsewhere, Reuters came out with the news suggesting the American push to recall US companies from Asia. The news cited senior diplomat to mark the drive, which in turn could escalate the tension between the US and China.
It should be noted that the COVID-19 is getting worst in America as it marked the highest daily death toll, over 1,200, on Wednesday. The same contributed to the 665K global numbers of deaths due to the pandemic.
Amid all these catalysts, US 10-year Treasury yields remain depressed below 0.58% whereas the 5-year counterpart drops to the record low of 0.25%. However, Japan’s Nikkei 225 and Australia’s ASX 200 flash mild gains by the press time.
Although risk factors are likely to be the key while searching for near-term market direction today’s preliminary readings of the US Q2 GDP, expected -35.1% versus -5.0% prior, could also be the key.
Read: US Second Quarter GDP Preview: Are there any shocks left?
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