S&P 500 Futures pause three-day uptrend, US T-bond yields pare losses amid Russia-Ukraine stand-off

• Market sentiment remains sidelined during Tuesday’s Asian session.
• S&P 500 Futures seesaw around intraday high but fails to extend previous three-day advances.
• US 10-year Treasury yields consolidate the biggest daily losses in three months.
• Russia criticizes Western Sanctions, bombards civilian buildings in Ukraine despite halted peace talks.

After the recently volatile trading days, global traders lacked direction during Tuesday’s sluggish Asian session as traders await key data/events.

While portraying the mood, the US 10-year Treasury yields rose 2.6 basis points to 1.865%, bouncing off the lowest level in a month, whereas the S&P 500 Futures take rounds to 4,370 following a three-day winning streak.

The recovery in the US Treasury yields could be linked to the upbeat US inflation figures as the price pressure gauge rallied to the highest in 14 weeks the previous day. The US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, don’t comply with the recently easing Fed chatters as the gauge jumped to the highest since November 23, marked a 2.62% figure by the end of Monday’s North American session.

However, downbeat expectations from March’s Fed meeting and recently mixed Fedspeak tests the US bond bears. That said, the CME’s FedWatch Tool marked nearly 5.0% probabilities of a 0.50% Fed rate hike in March, versus more than 50% before a few days. While considering this, Atlanta Fed President Raphael Bostic said on Monday, “Today I am in favor of a 25 bps move at March meeting."

On a different page, Russia harshly criticizes Western sanctions while also escalating the invasion of Ukraine. Recently, US Republican Senator called for more sanctions for Russian oil companies while imagery company Naxar recently mentioned Russian troops' length of around 40 miles near Ukraine’s capital Kyiv.

On Monday, negotiations between Russia and Ukraine concluded without any core results, as expected. The diplomats assured further talks during this week but Moscow isn’t ready to step back as Russian troops bombard civilian buildings in Kyiv. On the other hand, Ukraine President Zelenskyy was quoted by Reuters’ reporter Phil Stewart to consider a no-fly zone for Russian missiles, planes and helicopters. The same would push the US to jump into the battle, as signaled earlier by the White House (WH). However, the WH press secretary Jen Psaki on Monday ruled out the idea of using US troops to create a no-fly zone over Ukraine amid the Russian invasion of the eastern European country.

Talking about data, China’s headline NBS Manufacturing PMI for February rose to 50.2 versus 49.9 expected and 50.1 prior. Further, the Non-Manufacturing PMI crossed 51.1 previous readouts with 51.6 figures for the stated month. Additionally, China’s Caixin Manufacturing PMI also rallied to 50.4 compared to 49.3 expected and 49.1 prior.

Looking forward, US ISM Manufacturing PMI for February and US President Joe Biden’s State Of The Union (SOTU) speech will direct short-term market moves but geopolitical headlines will be the key to fresh impulse.