Following two consecutive days of risk-on, market sentiment dwindles during early Thursday.
While portraying the mood, the US 10-year Treasury yields seesaw around 1.457% after declining for the first time in three days on Wednesday whereas the S&P 500 Futures struggle to copy the Wall Street’s gains, up 0.05% around 4,687 by the press time.
It’s worth noting that fresh challenges to the previously positive risk catalysts and cautious mood ahead of the key US data seem to test the optimists amid a light calendar.
Among the negatives, China’s biggest-ever lockdown, of around 13 million residents in Xi’an as stated by the Wall Street Journal (WSJ) gains major attention. On the same line are the White House fears over the availability of Pfizer’s pill to battle the Omicron that recently got the US Food and Drug Administration (FDA) approval. Additionally, the Financial Times (FT) news stating, “France on Wednesday canceled its order of Merck’s drug after data showed it resulted in a reduction of only 30% in the risk of hospitalization and death, significantly lower than earlier expectations,” also challenge the previously upbeat market mood.
It’s worth observing, however, that the White House optimism over US President Joe Biden's Build Back Better (BBB) stimulus plan is likely battling the bears. Additionally, Japan’s positive GDP revision and push for a record budget joins US Military’s progress over having a single cure for all covid and variant, not to forget studies showing Omicron has lesser scope hospitalization, to keep the bulls hopeful.
Moving on, markets are likely to remain divided as traders approach Christmas Eve amid light volume. However, the US PCE inflation and Durable Goods Orders for November can entertain the momentum traders. Also important are the aforementioned risk catalysts like Omicron news and US stimulus updates.
Read: Dollar falls broadly as risk sentiment returns on rise in US equities
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