• S&P 500 futures recorded a modest gain after a six-day winning streak, reaching as high as 3,498.12.
  • Fed Chairman Powell’s AIT move was well appreciated and hopes for US stimulus added to the market’s optimism.
  • Viral woes, a US-China tug-of-war and a light calendar could provide intermediate callbacks ahead of the Jackson Hole Symposium 02 update.

S&P 500 futures remained positive, albeit with modest gains, wheeling up to 3,490 for a seventh straight day in Asia on Friday. U.S. equity derivatives, mostly considered a risk barometer, brushed the previous day’s all-time highs before inching below the 3,500 mark.

Federal Reserve (Fed) Chairman Jerome Powell had confirmed the US central bank’s bullish bias the day before. Even so, the market still sees the average inflation target (AIT) as a positive, perhaps due to the prolonged monetary easing. It is also important to note that the Fed head signaled that employment and inflation data are likely to remain low for an extended period of time.

In addition to Powell’s power play, clues about the U.S.’s coronary (COVID-19) stimulus plan also favor market sentiment. Earlier marking major differences with the ruling Republicans, House Speaker Nancy Pelosi showed a willingness to further ease Democratic demands.

Elsewhere, China banned beef from another Australian supplier, while the U.S. continued to threaten ticker-tape while also expressing red eyes over Dragon’s use of missiles in military exercises near the South China Sea.

Against this backdrop, US 10-year Treasury yields rose to a 2.5-year high, while Asia-Pacific stocks were mixed at the time of writing.

Looking ahead, the lack of significant data could keep the Asian session mostly inactive. However, the COVID-19 update could entertain traders ahead of a presentation on the second day of the Jackson Hole Symposium. Also important will be data on U.S. spending, consumer confidence and the Chicago Purchasing Managers Index.

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2020-08-27