US T-bond yields, stock futures rebound as markets wait for US data

• US Treasury yields consolidate the heaviest daily fall in a month.
• S&P 500 Futures rise half a percent, Asia-Pacific equities trade mixed.
• Cautious sentiment ahead of US Core PCE Inflation data, mixed updates over Russia-Ukraine story probe traders amid sluggish Asian session.

Global markets take a breather during early Friday after two consecutive days of Fed-led volatility. That said, the risk appetite remains sluggish as traders await key US inflation data amid an absence of major catalysts. Also contributing to the boring session are the mixed updates on the Russia-Ukraine tussles.

While portraying the mood, the benchmark US 10-year Treasury yields stay firmer around 1.81%, after declining the most in a month the previous day. However, the S&P 500 Futures also print mild gains around 4,330 by the press time.

Additionally, stocks in Australia, Japan and South Korea stay positive whereas those from China and New Zealand print mild losses at the latest.

It’s worth noting that firmer US data drowned Wall Street the previous day despite an upbeat start to Thursday’s trading. That said, Advance Q4 US GDP rose 6.9% annualized versus 5.5% market consensus and 2.3% prior. On the same line was the US Initial Jobless Claims for the week ended in January 21that came in 206K compared to 260K expected and 290K previous. It should be noted, however, that the US Durable Goods Orders for December dropped by -0.9% for December, below -0.5% market consensus.

In addition to the mixed data, the active US role in the Russia-Ukraine tussles and Moscow’s refrain to step back also test the market players.

Above all, an absence of major data/events and cautious sentiment ahead of the Fed’s preferred inflation gauge, namely the US Core PCE Price Index, seem to confuse traders and restrict the market moves of late. It should be noted that the key US data for December is expected to rise from 4.7% to 4.8% YoY, suggesting further upside for the US Treasury yields and favoring the US dollar which in turn could exert downside pressure on commodities and other riskier assets.

Read: US PCE Inflation Preview: Dollar rally has more legs to run