Yields, S&P 500 Futures portray cautious optimism, coronavirus variant is the key

• US 10-year Treasury yields struggle to keep previous day’s rebound, S&P 500 futures print mild gains.
• Global policymakers placate market fears over the South African covid variant, Fed’s Powell, US Treasury Secretary Yellen eyed.
• Indecision over severity of virus strain, comparatively better economies favor optimists.

Having witnessed an upbeat start to the week, market sentiment dwindles during early Tuesday as traders await more developments on the coronavirus front, as well as the week’s key event. Showcasing the mixed sentiment are the sluggish US Treasury yields, in contrast to mildly bid stock futures.

That said, the benchmark US 10-year Treasury yield drops one basis points (bps) to 1.52% while the S&P 500 Futures rise 0.40% by the press time. It’s worth noting that shares in Asia-Pacific markets print gains at the latest.

Among the positives, China’s first in three-month above 50 NBS Manufacturing PMI reading for November gains major attention. On the same line is US President Joe Biden’s rejection of lockdown’s need and Fed Chair Jerome Powell’s acceptance of the covid challenges for inflation and jobs report while also backing reflation fears. Further, US Treasury Secretary Janet Yellen also placates market pessimism while pushing Congress to overcome the US debt limit deadlock, as well as highlighting the strength of the US economy.

Alternatively, the updates from the US military posture highlights Sino-American tussles and exert downside pressure on the risk appetite. Further, the market’s anxiety ahead of the week’s key data, like Fed Chair Jerome Powell’s testimony and jobs report for November, also probe the risk-on mood.

Above all, global medicine supplies’ optimism to have the vaccines for the strain and policymakers’ ability to take quick measures to tame the Omicron breakout favor the bulls. Additionally keeps the market players hopeful is the current conditions of the global economies versus the initial days of the pandemic.

Moving on, US CB Consumer Confidence for November and covid updates will be important for the traders ahead of testimonies from Fed Chair Powell and Yellen, not to forget Friday’s US Nonfarm Payrolls.

Read: Conference Board Consumer Confidence Preview: Spending immunity