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  • S&P 500 Futures follow Wall Street benchmarks’ losses to visit the lowest levels since June 15.
  • EU-US tussle intensifies after Brussels responds to the tariff threats, FBI Chief cites China as the most comprehensive threat.
  • Holidays in Beijing, Hong Kong keeps traders directed to qualitative catalysts for immediate guidance.

S&P 500 Futures print 0.20% loss while declining to 3,043 as Tokyo opens for Thursday’s trading. The risk barometer follows its Wall Street benchmark that dropped 2.60% to 3,050 on Wednesday. Escalating trade war fears and the pessimism surrounding the coronavirus (COVID-19) situations in the US print the risk-off theme.

Be it the Trump administration’s threat to levy $3.1 billion tariffs on the EU/UK goods or the US-China tension, not to forget American anti-dumping investigation on Asian tire manufacturers, trade wars are returning to the desk. It should also be noted that comments from Brussels and White House Adviser Peter Navarro are the latest catalysts suggesting the brewing trade wars between the key global economies.

In addition to the trade pessimism, increasing fears that the pandemic is gaining momentum in the US also negatively affect the global risk-tone sentiment. The CGTN news recently came out with the headlines suggesting the largest single-day increase in the US new cases on Wednesday with over 36,000 figures. Details suggest that hospitalization surged by the record 7.3% in Texas whereas numbers are also on the spike in California.

Other than these catalysts, grim comments from the Fed policymakers and the International Monetary Fund’s (IMF) another downgrade to the global economic forecast also weigh on the trading sentiment.

While also portraying the risk-off mood, the US 10-year treasury yields remain on the back foot near 0.676% whereas Japan’s Nikkei 225 drops to 22,327, down 0.96%, as we write.

Considering the off in China and Hong Kong, coupled with the lack of data from anywhere else in Asia, traders may have to rely on the trade/virus updates for fresh impetus. In doing so, the markets may pause from the previous day’s wild moves.