US T-bond yields tease multi-year top, S&P 500 Futures print mild gains amid inflation concerns

• US 10-year Treasury yields retreat from July 2019 peak, S&P 500 Futures track Wall Street gains.
• Covid optimism joins comments from Fed’s Daly to trigger market consolidation.
• Traders remain cautious ahead of Thursday’s US inflation data due to Fed’s rate hike fears.

Market sentiment struggles to carry the recent momentum during the mid-Asian session on Wednesday.

That said, the yields retreat and the S&P 500 Futures also struggle to extend early-day gains amid mixed concerns over reflation fears, not to forget trade/political woes.

San Francisco Fed President Mary Daly favored the March rate hike in her latest speech. The policymaker additionally mentioned, “Fed can't be overly aggressive on rate increases,” while saying, “US inflation could get worse before it gets better.”

It’s worth noting that the US 10-year Treasury yields jumped to the highest levels since July 2019 the previous day before recently easing to 1.945%. Further, the S&P 500 Futures print mild gains around 4,520 but struggles of late.

Also contributing to the gold’s upside momentum is the looming risk of a Russian invasion of Ukraine and the US-China trade tussles. On the same line are the latest comments from the Chinese Communist Party (CCP) that was quoted in the South China Morning Post (SCMP) as saying, “China should ‘support and guide’ the healthy development of capital, and prevent the ‘barbaric growth of capital.’”

Earlier in the day, US President’s Chief Medical Adviser Dr. Anthony Fauci said, per the Financial Times (FT), “The US is heading out of the ‘full-blown’ pandemic phase of Covid-19.”

It’s worth noting that worsening virus woes in Japan and Hong Kong added to the challenges for market sentiment.

Looking forward, comments from Fed Cleveland President Loretta J. Mester may offer intermediate directions ahead of Thursday’s US CPI data. Firmer inflation figures will reignite Fed rate-hike concerns and may add strength to the US Treasury yields, which in turn could challenge riskier assets like equities, commodities and Antipodeans.

Read: Currencies range bound as bond prices continue to rise