US T-bond yields ease from two-week top, S&P 500 Futures defend 4,700 as Omicron, holidays play their roles

• US 10-year Treasury yields retreat from a fortnight high, S&P 500 Futures print mild gains.
• Omicron woes battle stimulus hopes, holiday season amid a sluggish session.
• Off in New Zealand, Australia, Canada and the UK add to the market’s inaction.

Risk sentiment dwindles during early Monday as global traders cheer the holiday mood during the final days of 2021.

In doing so, the market participants ignore recently escalating numbers of the South African COVID-19 variant, namely Omicron. The reason could be linked to the mixed updates over the US President Joe Biden’s Build Back Better (BBB) plan and geopolitical concerns surrounding Russia and Ukraine, not to forget upbeat retail sales figures from the US.

That said, the benchmark US 10-year Treasury yields dropped 1.1 basis points (bps) to 1.482%, stepping back from a two-week high flashed the previous day. On the contrary, the S&P 500 Futures rise 0.11% intraday around 4,720 by the press time.

The average number of new US coronavirus cases has risen 45% to 179,000 per day over the past week, per Reuters tally whereas the UK and France reported a fresh high of Covid-19 daily infections, respectively crossing 122,000 and 94,000 daily cases at the latest. Elsewhere, China reported 206 new COVID-19 cases for December 25 versus 140 the previous day while Australia’s most populous state New South Wales (NSW) unfortunately reported a new high in coronavirus infections, to 6,394, while ABC news cites 36% fall in tests.

The Omicron woes resulted in the cancellations of over 4,500 flights during the Christmas weekend. However, global policymakers remain hopeful to overcome the pandemic amid promising studies showing lesser hospitalizations.

Further, geopolitical Russia and Ukraine also gain the market’s attention after Moscow withdraw 10,000 tops from the border with Kyiv during Christmas. The TASS news agency also reported that Russia has received a NATO (North Atlantic Treaty Organization) proposal to commence talks on Moscow's security concerns on Jan. 12 and is considering it. Though, the pressure global policymakers trying to exert on Russia seems to fail to placate the tension.

Elsewhere, US Vice President Kamala Harris sounds hopeful over the passage of President Biden’s BBB stimulus plan despite Senator Joe Manchin’s rejection, while speaking on the CBS interview. Though, US VP Harris also cited inflation fears and showed readiness to tame them, which in turn favors the Fed’s hawkish view and underpin the market fears.

Additionally, a report from Mastercard, shared by Reuters, shows that the US retail sales rose 8.5% during this year's holiday shopping season from Nov. 1 to Dec. 24.

Looking forward, an off in major markets and the year-end holiday mood will restrict the momentum but US Dallas Fed Manufacturing Index for December, expected 13.2 versus 11.8 prior, may offer intermediate moves.