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  • S&P 500 Futures tease intraday low while consolidating the heaviest gains in three weeks.
  • USTR rejects hopes of China tariff relief, Beijing diplomat criticizes Western alliance.
  • France warns over jump in covid-infected patients in ICU, Germany hints using Federal law to push for covid restrictions.
  • Brisbane announces three-day lockdown, colossal explosion in Indonesia, Suez Canal chatters also weigh on sentiment.

S&P 500 Futures takes offers around 3,945, down 0.50% intraday, during early Monday. In doing so, the risk barometer drops for the first time in three days as the coronavirus (COVID-19) fears join US-China tussles to weigh on sentiment amid a light calendar day.

Following US Trade Representative (USTR) Katherine Tai’s comments suggesting no relief to China under the new government, China’s Xinjiang region Government Spokesman alleged the Western group to allies to destabilize Beijing. The US, the UK, Canada and the European Union (EU) have recently joined hands to voice their grievances against China’s human rights violations in Xinjiang. On the other hand, USTR Tai didn’t turn down the hopes of Sino-American negotiations while refraining from any immediate tariff relief to the dragon nation as she recently took the office.

On the other hand, German Chancellor Angela Merkel said that the virus-led lockdown is needed while showing readiness to use Federal law to push people to accept the government guidelines. Also, French doctors conveyed that the virus-infected people in the Intensive Care Unit (ICU) have jumped to the highest in 2021. Furthermore, Australia’s third-largest city by population announced a three-day lockdown after community transmission of the virus found in the last week.

Elsewhere, Indonesia witnessed a colossal explosion while Ever Given is still stuck in the Suez Canal.

It should be noted that hopes of a US $3.0 trillion infrastructure spending plan from US President Joe Biden and his push for faster vaccinations to all by May favored risk-off mood on Friday.

Against this backdrop, stocks in Asia-Pacific trade mixed whereas the US 10-year Treasury yield stays unchanged around 1.66% by the time of writing.

Considering a lack of major data/events during the holiday-shortened week, ahead of Friday’s US employment data, risk catalysts remain as the key driver to watch.