S&P 500 Futures snap four-day downtrend, US 10-year Treasury yields refresh yearly top on upbeat sentiment

 

  • S&P 500 Futures regain 3,900, up 0.20% intraday, to rise for the first time in a week.
  • US 10-year Treasury yields jump to the fresh high since February 2020.
  • Comments from Chinese diplomat join virus, vaccine optimism to back the mood amid a light calendar.

Risk-on mood gains momentum during early Monday as global rating agencies sound cautiously optimistic for Pacific majors while Chinese diplomat highlighted areas of cooperation with the US. Also favoring the mood could be the hopes of US covid relief package and easing of the coronavirus (COVID-19)-led activity restrictions in the UK.

While portraying the sentiment, S&P 500 Futures rise for the first time in five days, currently up 0.28% to 3,915, whereas the US 10-year Treasury yields rally to the fresh high in 12 months by rising 3.2 basis points (bps) to 1.3770%.

Following Fitch’s no change in Australia’s ‘AAA’ credit rating, S&P raised New Zealand’s rating to ‘AA+’ from ‘AA’ in the latest analysis. The Pacific nations have recently witnessed snap lockdown measures amid the virus resurgence and hence these news rebuild optimism in Australia and New Zealand, which in turn backs the overall upbeat sentiment.

Elsewhere, the UK is determined to reopen schools by March 08, per Sky News, amid receding virus statistics and success in vaccinations. British PM Boris Johnson also lauded the immunization by preponing the deadline for all the adults and above-50 UK locals from September to July. It should be noted that Israel is the strongest contestant that won over the virus with a heavy vaccination drive and recently backed Pfizer for an over 85% success ratio.

On the contrary, the Fed’s fear of downside risks to the US business and the Sino-American tussle try to tame the market bulls, but fail off-late.

Amid these plays, Asia-Pacific stocks also remain positive while prices of gold and AUD/USD, the traditional risk barometer, are up over 0.30% by press time.

Considering the lack of major data/events, risk news is likely to determine the market mood.

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2021-02-21