S&P 500 Futures, US Treasury bond yields portray anxiety ahead of central bankers’ debate

• Recession fears join chatters surrounding higher rates to reverse Friday’s cautious optimism.
• S&P 500 Futures fade rebound from yearly low, US 10-year Treasury yields remain mildly bid after snapping three-week uptrend.
• US Durable Goods Orders, housing data may entertain intraday traders, ECB Forum is crucial.

Global markets fail to extend Friday’s cautious optimism as fears of higher rates weighing on the economic transition probe traders during Monday’s Asian session. The risk appetite also weakens amid a cautious mood ahead of Wednesday’s debate of the US, the UK and the European central bankers at the ECB Forum on Central Banking.

That said, the S&P 500 Futures drop 0.15% intraday to 3,910 while consolidating a bounce off the yearly low. Further, the US 10-year Treasury yields rose 1.5 basis points (bps) to around 3.13% after posting the first weekly loss in four.

During the weekend, Reuters came out with the news suggesting that the Bank for International Settlements (BIS) calls for interest rates to be raised "quickly and decisively" to prevent the surge in inflation from turning into something even more problematic.

The fears of higher rates and economic recession were also supported by the International Monetary Fund (IMF) Managing Director Kristalina Georgieva’s comments stating, per Reuters, “Further negative shocks would inevitably make US economic situation ‘more difficult’.”

It’s worth noting that the comments from a German Official suggesting the Group of Seven (G7) leaders’ preparedness for taking moves against Russia's oil and gold seem to recently weigh on the risk appetite. On the same line were comments from the White House saying, “The US is confident that NATO's new strategy document will include "strong" language on China, a White House official said on Sunday, adding that negotiations on how to refer to Beijing were still underway,” per the news from Reuters.

On Friday, the US New Home Sales for May, by 10.7% versus April’s revised figures of -12.0%, joined the record low print of the final reading of the University of Michigan's Consumer Sentiment Index for June, to 50.0 from 50.2 initial estimates, also drowned the US dollar.

It’s worth noting that the downbeat US inflation expectations also underpinned the US dollar’s pullback the previous day. That said, the US Dollar Index (DXY) posted the first weekly loss in four by the end of Friday’s trading, down 0.10% around 104.00 by the press time.

Having witnessed a sluggish start to the week, US Durable Goods Orders for May, expected 0.1% versus 0.5% prior, as well as the Pending Home Sales, expected -2.0% versus -3.9% prior, will be important for daily directions. However, Wednesday’s debate of the US and the UK and the European central bankers at the ECB Forum on Central Banking will be an important event to watch for clear market directions.