- S&P 500 Futures edge higher after refreshing record top the previous day.
- Biden’s infratructure spending and EU-US trade optimism battle Fed’s move, covid woes amid a quiet session.
- US Core PCE, Fedspeak will be the key to follow for fresh impulse.
S&P 500 Futures remain firmer around all-time high, flashed Thursday, amid subdued markets on early Friday. The risk barometer earlier cheered US President Joe Biden’s ability to deliver promised stimulus but mixed clues test market bulls afterward. Also challenging the sentiment could be the lack of data/events and month-end positioning.
Although the size of the infrastructure spending and a lack of details dim optimism over the recently announced US stimulus, policymakers’ capacity to break the deadlock ahead of two-week holidays keeps market players positive during late Thursday, as well as early in Asia.
Also on the same line were comments from German Diplomat Peter Almaier suggesting the improvement in the EU-US trade relations after a few years of differences. Germany Economy Minister said, “Talks in Washington showed a window of opportunity to resolve differences and he expected the US and European Union (EU) could resolve differences over steel and aluminum tariffs by the end of the year.”
On the contrary, the US Federal Reserve (Fed) recalling of the pandemic-led relief measures for the large banks and fears of Delta Plus variant of the covid probe the risk-on mood.
Additionally, a lack of major data/events and Australia’s local lockdowns, as well as the EU’s rejection to have a summit with Russian leader Vladimir Putin, also challenges the risk appetite.
Amid these plays, US 10-year Treasury yields print a three-day uptrend and the US dollar index (DXY) remains pressured by the press time.
Moving on, investors will keep their eyes on the US Core Personal Consumption Expenditures (PCE) details for fresh impulse due to its status of the Fed’s preferred inflation gauge. Although the data is likely to favor market sentiment, any negative surprise shouldn’t be taken lightly.