Market news

17 December 2021

Yields pare weekly downside, S&P 500 Futures print mild gains amid mixed mood

  • US Treasury yields pause the central-bank induced downturn, stock futures struggle for clear direction.
  • Omicron fears escalate, US stimulus package deadlock extends.
  • Risk catalyst can entertain traders, easy end to volatile week expected due to light calendar.

Risk sentiment dwindles during early Friday as traders take a breather after a slew of monetary policy actions by the key central bankers. Adding to the indecision could be the challenges to the market’s mood, mainly due to the headlines concerning the South African covid variant, China and US stimulus.

That said, the US 10-year Treasury yields seesaw around 1.42% while the two-year counterpart picks up bids to 0.63%, snapping a two-week uptrend. On the other hand, S&P 500 Futures rise 0.10% by the press time but Asia-Pacific stocks traded mixed at the latest.

Talking about Omicron, Australia marks the covid vaccination milestone of 80% but the recent spread in virus variant pushes authorities to introduce tougher activity restrictions in Queensland. Elsewhere, the UK, unfortunately, reports the second consecutive day with all-time high daily covid infections, recently up by 88,376. It’s worth noting that US President Biden earlier mentioned that Omicron is going to start spreading more rapidly. On the contrary, French President Emmanuel Macron said, “I will make COVID-19 decisions based on hospitalizations.”

On a different page, the US Senate that rejected a Democratic proposal over immigration, which in turn stopped the President’s BBB aid package. Even so, Biden sounds optimistic to get the much-awaited stimulus passed soon. Additionally weighing the Aussie pair were comments from the Chinese Ambassador who conveyed dislike for the US actions against Chinese entities over Xinjiang-related issues.

It’s worth noting that optimism surrounding Brexit, a halt in US-Iran nuclear talks and the European union’s push for Russia's sanctions over the Ukraine issue are other geopolitical issues that weigh on the sentiment.

Above all, the lead central banker’s cautious optimism and hawkish plays keep the investors hopeful of firmer days ahead even if the virus strain challenges the near-term outlook for the markets.

As a result, the commodities and Antipodeans are likely to recover the losses marked since late October but the COVID-19 variant is a wild card to watch.

Read: Forex Today: Central banks’ marathon coming to an end

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