S&P 500 Futures stay pressured, yields rebound on full markets, geopolitical concerns

• Market sentiment remains downbeat as geopolitical fears joins the return of full markets.
• The return of US, Canada traders renew US Treasury bond yields’ run-up amid hopes of hawkish Fed, upbeat US data.
• S&P 500 Futures print four-day downtrend around the monthly low.

Risk profile fades the week-start cautious optimism as hawkish expectations from the key central banks join the fears of recession and geopolitical concerns.

While portraying the mood, the US 10-year Treasury bond yields pick up bids to near the highest levels marked since early November 2022, mildly bid around 3.86% at the latest. On the same line, S&P 500 Futures declined 0.40% intraday at the latest.

An uptick in the yields welcomed the full markets’ return amid hawkish hopes from the US Federal Reserve (Fed), which in turn underpinned the US Dollar’s recovery. On the other hand, the US and China alleged each other over the balloon shooting whereas the US diplomatic ties with Taiwan teased Beijing. On the same line, the United Nations (UN) Security Council is alarmed by Japan for North Korea’s missile testing and the same weigh on the sentiment, as well as favors the US Dollar.

Elsewhere, a cautious mood ahead of the preliminary readings of the S&P Global PMIs for February will be crucial for the market players as recent US data have been mixed, which in turn could recall the US Dollar bears and favor the market’s cautious optimism. Also important will be the Federal Reserve (Fed) talks to watch for clear directions.

Above all, Wednesday’s Fed Minutes will be crucial for the market players to follow as the US monetary policymakers seem to have lacked unity about the next rate hike and the same can weigh on the US Dollar if confirmed by the Minutes Statement.

Apart from what’s already mentioned above, inflation numbers from Canada and the Reserve Bank of New Zealand (RBNZ) monetary policy meeting will also be important for traders. The reason could be linked to the Bank of Canada’s (BoC) hints for pausing the rate hikes, as well as New Zealand’s geopolitical crisis that challenges the Kiwi buyers but also propel the inflation in the nation and favor RBNA hawks.

Also read: Forex Today: Slow start to the week