- US 10-year Treasury yields reverse the previous day’s losses around two-year high.
- S&P 500 Futures ignore Wall Street losses to print mild gains.
- US President Biden’s speech, PBOC rate cuts are the key catalysts.
- US stimulus headlines encourage buyers of late, second-tier data eyed ahead of next week’s FOMC.
Market sentiment remains mixed during early Thursday, despite the latest gains of the US stock futures, as fears of hawkish monetary policy actions and geopolitical tensions battle stimulus hopes.
That said, the benchmark US 10-year Treasury yields rose 2.5 basis points (bps) to 1.852% after reversing from a two-year high of 1.90% the previous day. Further, the S&P 500 Futures rise 0.20% to 4,533 even as Wall Street benchmarks end Wednesday on a softer footing.
US President Joe Biden highlights Chief Trade negotiator Katherine Tai’s efforts to placate Sino-American trade tussles. However, he also mentioned that the US is “'not there yet' on possible easing of tariffs on Chinese goods”. Biden also said, “China is not meeting its purchase commitments.”
Further, comments favoring Federal Reserve (Fed) Chairman Jerome Powell’s push to recalibrate the support also raised concerns over faster rate hikes and balance sheet normalization, which in turn favored the US Treasury yields to recover the previous day’s losses.
It should be noted that Biden’s warning to Russia and hopes of getting the support of Senator Joe Manchin and Kyrsten Sinema to the Build Back Better (BBB) plan during Friday’s initial voting tested the investors but favored T-bond yields.
Following that, the People’s Bank of China’s (PBOC) surprised markets by the first cut in the 5-year Loan Prime Rate (LPR), by 5 basis points (bps) to 4.60% in 21 months.
Elsewhere, firmer Aussie jobs report and New Zealand’s cautious optimism ahead of witnessing the Omicron wave keeps the traders slightly positive during Thursday’s Asian session.
Moving on, developments over the US-China story and the Fed updates, not to forget geopolitics and stimulus, will entertain traders while the US Jobless Claims, Philadelphia Fed Manufacturing Survey for January and Existing Home Sales for December decorate the calendar.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.