- 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.
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 climbs above 1.0500 on persistent USD weakness
EUR/USD preserves its bullish momentum and trades above 1.0500 on Monday. In the absence of high-impact data releases, the risk-positive market atmosphere makes it difficult for the US Dollar (USD) to find demand and helps the pair push higher.
GBP/USD rises to 1.2600 area as mood improves
Following a short-lasting correction, GBP/USD regains its traction and trades at around 1.2600. The US Dollar struggles to stay resilient against its rivals as market mood improves on Monday, allowing the pair to build on its bullish weekly opening.
Gold slumps below $2,650 despite falling US yields
After recovering toward $2,700 during the European trading hours, Gold reversed its direction and dropped below $2,650. Despite falling US Treasury bond yields, easing geopolitical tensions don't allow XAU/USD to find a foothold.
Five fundamentals for the week: Fed minutes may cool Bessent boost, jobless claims, core PCE eyed Premium
Will the rally around Scott Bessent's nomination continue? The short Thanksgiving week features a busy Wednesday packed with events, and the central bank may cool the enthusiasm.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.