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  • S&P 500 Futures extend Thursday’s recovery moves amid cautious optimism.
  • Vaccine, stimulus and upbeat US data favor sentiment despite China-UK tussle, fresh covid fears in Australia.
  • World portrays rosy forecast for Asia-Pacific, Fed’s Daly stays worried over US employment.

S&P 500 Futures picks up bids around 3,910, up 0.25% intraday, during early Friday. The risk barometer dropped to the fresh 13-day low the previous day before marking a stellar recovery while piercing the 3,900 level on a daily closing basis.

While carrying the latest recovery, S&P 500 Futures cheer upbeat US GDP and Jobless Claims figures as well as comments from San Francisco Fed President Mary C. Daly that favors the need for further stimulus and rejects the taper tantrums. Also on the risk positive side are the vaccine optimism in the US and Canada as well as chatters surrounding the $3.0 trillion infrastructure spending plan from American President Joe Biden. Furthermore, the World Bank’s upbeat economic forecast for China and the rest of the Asia-Pacific region favor the risk-on mood.

Alternatively, China’s sanctions on the UK over Xinjiang comments and European leaders’ woes on the coronavirus (COVID-19) third wave seems to test the optimism. Additionally, news that Queensland found one fresh community virus transmission case exerts additional downside pressure on the sentiment. Furthermore, Australia’s Chief Diplomat terms Beijing’s trade behavior as ‘vindictive’ and adds challenges to the sentiment.

Given the lack of data and a risk-on mood, the US dollar index (DXY steps back from the four-month high flashed the previous day whereas the US 10-year Treasury yield stays strong above 1.60%.

Looking forward, vaccine and virus updates are likely to be the key ahead of the Fed’s preferred version of inflation, the Core PCE figures for February. Also important will be the chatters surrounding US stimulus and China’s tussle with the West.

Read:  The February Grab-Bag Preview: Personal Income, Spending, Core PCE Prices and GDP