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  • S&P 500 Futures ease from six-month high amid a lack of risk-positive headlines.
  • Geopolitics, trade tension weigh on market sentiment amid US stimulus deadlock.
  • US President Trump’s economic optimism struggles to recall the bulls.

S&P 500 Futures drop to 3,366 down 0.10% on a day, during the initial hour of Tokyo open on Thursday. The risk barometer refreshed the six-week high the previous day but fails to ignore the underlying threats to optimism off-late.

Among them, the Sino-American tension and the deadlock in the US stimulus talks gain major attention. Recently, Trump administration showcased stealth bombers near Vietnam where China was already flaunting its nuclear weapons during the drill. On the other hand, US Treasury Secretary Steve Mnuchin and US President Donald Trump alleged opposition Democratic Party for the delay in the aid package. Further, the US Trade Representative Robert Lighthizer’s verbal attack on Europe and America’s citing of Iranian Navy Guard’s performance are some of the additional threats to the market sentiment.

On the contrary, US President Donald Trump keeps highlighting the V-shaped recovery while upbeat inflation data from America favors the claims. Also challenging the bears are welcome Producer Price Index (PPI) from Japan and receding coronavirus (COVID-19) numbers from Australia.

Other than the aforementioned mixed catalysts, Japan’s Nikkei 225, up 1.66% to 23,225, as well as the US 10-year Treasury yields, down 2.2 basis points (bps) to 0.66% also disturb the market players.

While searching for a clear direction, traders may keep eyes on the US budget talks and trade updates, not to forget COVID-19 news, as the economic calendar seems mostly dull. Even so, weekly prints of US Jobless Claims, expected 1120K versus 1186K prior, may offer intermediate moves to the markets.