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  • S&P 500 Futures fail to cross 3,300, drops from the highest since late-February.
  • American Senators still jostle over the coronavirus aid package, Sino-US tussle, pandemic woes add to the risk-off mood.
  • US data, the decision on unemployment claims benefits will be the key.

S&P 500 Futures drop to 3,295 during the initial hour of Tokyo open on Wednesday. The risk barometer fails to track Wall Street’s gains as the US policymakers fail to deliver details of the much-awaited relief bundle. The market’s risk aversion wave also takes clues from the recent US-China tension over TikTok and fears that the latest coronavirus (COVID-19) figures will be devastating.

The US Congress not only crossed the expiry of the unemployment benefit claims but also nears the August vacation, starting this weekend. The same makes the disagreement between the ruling Republicans and opposition Democratic Party worrisome for traders.

Further, US President Donald Trump keeps exerting pressure on China’s TikTok to have an American owner while chatter over consulate closures and the South China Sea keep the risk-tone heavy. Additionally, the Bloomberg report citing Japanese PM Shinzo Abe’s struggle to keep the power and the Herald Sun’s forecast of above 700 new cases from Australia joins the blast in Lebanon to weigh on the trading sentiment.

Amid all these catalysts, the US 10-year Treasury yields stay depressed near March month’s low whereas Japan’s Nikkei 225 declines over 0.80% to 22,388 by the press time.

Moving on, market players will keep eyes on the stimulus updates from the US for fresh impetus while also following the US ADP Employment Change and ISM Non-Manufacturing PMI. Although the American stimulus is likely to roll out soon, fears of downbeat US data could keep the risks heavy.