S&P 500 Futures print mild gains despite yields’ rally to multi-month top on hawkish Fedspeak

• Market sentiment remains mildly positive amid mixed concerns over Ukraine, Fed.
• US Treasury yields rise to the fresh high since May 2019, S&P 500 Futures track Wall Street gains.
• Fed’s Powell, second-tier US data will be eyed for fresh impetus.

Risk appetite remains firmer during Wednesday’s Asian session, despite the stellar run-up in the US T-bond yields.

That said, the US 10-year and 2-year Treasury yields remain firmer around the highest levels since May 2019 while the S&P 500 Futures print 0.12% intraday gains after the Wall Street counterpart renewed five-week top.

The Fedspeak keeps inflating expectations of faster rate hikes from the US central bank but hopes that the policymakers will be able to tame inflation and return to normal after the battle seems to have kept equities positive despite bond rout.

Among the latest hawks was St. Louis Fed President, James Bullard and Cleveland Fed President Loretta Mester clearly showed signals of 50 basis points (bps) of a rate lift.

Also keeping Asia-Pacific buyers hopeful are the chatters over Japanese Prime Minister (PM) Fumio Kishida’s additional economic stimulus package by the end of March, as well as New Zealand Prime Minister Jacinda Ardern’s easing of covid-linked activity restrictions.

Even so, a continuation of the Ukraine-Russia crisis and a light calendar in Asia challenges the market sentiment of late. Ukraine’s President Volodymyr Zelenskyy who previously eased on his stand to faster the peace talks recently said, “Talks with Russia are difficult, at times confrontational.” On the other hand, war escalates in Mariupol. It’s worth observing that Moscow managed to pay the second tranche of Eurobond coupon payment in the USD and avoided default for the second consecutive time.

Looking forward, Fed Chairman Jerome Powell’s speech will be crucial for the markets amid aggressive rate-hike talks. Also important to watch are the headlines concerning Ukraine and Russia, as well as US New Home Sales for February.

Read: S&P 500 sits above the 200-DMA as dip buyers reclaim 4500