S&P 500 Futures print mild gains tracing Wall Street moves, yields stabilize on Japan’s off

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  • S&P 500 Futures extend the previous day’s rebound from yearly low.
  • US Treasury yields remain steady around the highest levels since late 2018.
  • DXY retreat, US inflation expectations drop to three-week low.

Global traders consolidate recent losses amid a lackluster Tuesday morning, with holidays in Japan and China facilitating a pullback in the recently strong yields. This, in turn, weighs on the US dollar and helps commodities, as well as Antipodeans, while favoring equities at the latest.

That said, the S&P 500 Futures remain mildly bid around 4,155 whereas the US 10-year Treasury yields hover around 3.0% after refreshing the multi-day top the previous day.

It’s worth noting that the cautious optimism in the market, as well as a pause in the yields, also trigger profit-booking moves of the US Dollar Index, down 0.18% intraday near 103.41 by the press time. The same helps the Gold Price (XAUUSD) to rebound from the 11-week low.

The recent market action lacks any major fundamental support as the covid resurgence in China and geopolitical concerns surrounding Russia stay on the table to challenge risk appetite. Also challenging the market sentiment is the global central bankers’ rush towards tighter monetary policies amid rallying inflation and supply crunch fears.

On a different page, the US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, dropped for the second consecutive day to 2.81% by the end of Monday US session, the lowest in three weeks. This could be linked to the USD’s latest pullback amid an absence of bond moves.

Additionally, the US ISM Manufacturing PMI for April eased to 55.4 versus 57.6 market forecast and 57.1 prior readings while S&P Manufacturing PMI also softened to 59.2 from 59.7 expected and prior, both of which also probe the USD bulls.

Moving on, the Reserve Bank of Australia’s (RBA) monetary policy meeting will be an immediate catalyst for the markets ahead of the US Factory Orders for March, expected at 1.1% versus -0.5% prior. While the RBA’s 0.15% will need extra support, most likely from the Fed, to keep the AUD/USD bulls hopeful, the quote recently refreshed daily tops by approaching 0.7100.

Read: Forex Today: Dollar reigns in a risk averse environment and ahead of central banks’ announcements