S&P 500 Futures repeat pre-Fed trading lull amid cautious optimism

S&P 500 Futures eases from the record top flashed on Tuesday.
Vaccine hopes join IMF’s upbeat economic growth forecast but traders turn cautious before FOMC.
Aussie CPI, China’s Industrial Profit flashed mixed signals to add to market’s confusion.

Anil Panchal FXStreet

S&P 500 Futures drop to 3,841, down 0.02% intraday, during Wednesday’s Asian session. The risk barometer refreshed record top the previous day as comments from US President Joe Biden and global vaccine manufacturers favored risks. Also supporting the mood was an upwardly revised global growth forecast by the International Monetary Fund (IMF). Though, trader’s caution before 2021’s first Federal Open Market Committee (FOMC) decision joins mixed economics to challenge the market moves.

Following signals that the covid variants can be cured by global vaccine producers and there are welcome results of vaccinations, US President Biden’s comments suggesting sooner immunization backed the risk-on mood. That said, the US government is up for increasing its vaccine purchase from Moderna and Pfizer, the New York Post said.

Read: US President Biden: Recently discovered that vaccine program is in worse shape than we expected

On the contrary, uncertainty over Biden’s $1.9 trillion fiscal stimulus and ex-US President Donald Trump’s impeachment challenge the mood while joining hands with the typical pre-Fed trading lull.

Also testing the market optimism were mixed data concerning Australia’s inflation and sentiment as well as China’s Industrial Production. During early Asia, Australia flashed better-than-forecast Consumer Price Index (CPI) data for the fourth quarter (Q4). Though, soft Business Confidence from the National Australia Bank (NAB), following Westpac Leading Index, spoiled the mood. It should be noted that China’s Industrial Production for December grew 20.1% YoY versus 15.5% prior.

Other than the S&P 500 Futures, the US 10-year Treasury yields and stocks in Asia-Pacific also portray the market’s indecision ahead of the key event, namely the US Federal Reserve’s monetary policy decision.

Read: Fed Preview: Fearing market froth or boosting Biden's stimulus? Three scenarios

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.