Yields decline, S&P 500 Futures print mild gains on mixed concerns
|- US 10-year Treasury yield snaps two-day uptrend to ease from weekly top.
- S&P 500 Futures track Wall Street benchmark that jumped the most since March.
- Geopolitical news challenges Omicron-linked optimism, financial market fears also test optimists.
- Light calendar, market’s wait for US CPI can trouble momentum traders.
Risk appetite sours during early Wednesday as geopolitical risks emanating from China and Russia weigh on the previous optimism amid a light calendar day.
To portray the mood, the US 10-year Treasury yield declines two basis points (bps) to 1.47% at the latest while retreating from a weekly high. On the other hand, the S&P 500 Futures print rise 0.20% intraday, and stocks in Asia-Pacific are also trading mixed at the latest.
Among the key-risk headlines were those conveying the latest jitters between the US and Russia, as well as Sino-American tussles. Adding to the market’s fears were chatters over the reliability of the Chinese financial markets considering the heavyweights’ looming debt payment.
Starting with the Washington-Kremlin tussle, President Joe Biden warns Russia of sanctions and help for Ukraine with military power if Kremlin invades Kyiv. “The Biden administration is in ‘intensive consultations’ with the new German government over its response if Russia invades Ukraine and believes Germany would be ready to take significant action if Russia launches an attack, a senior U.S. State Department official said on Tuesday,” said Reuters.
Moving on, the American boycott of the 2022 Beijing Olympics doesn’t bode well with China as the dragon nation hints at consequences due to the same. Additionally, global financial markets turn cautious as Evergrande and Kaisa are approaching bond payment deadlines after barely paying the interests.
On the contrary, Japan’s optimism for more stimulus and Beijing’s readiness to safeguard the financial markets join the receding fears of the South African coronavirus variant, dubbed as Omicron, to favor the market sentiment.
That said, a cautious mood may challenge optimists ahead of Friday’s US Consumer Price Index (CPI), which in turn highlights risk catalysts as the key factor to watch for clear direction.
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