S&P 500 Futures, Treasury bond yields print mild gains as banking optimism prevails amid sluggish session

• Global markets remain dicey as traders await this week’s key data/events.
• Mixed concerns about banking sector risk, US-China woes and Fed bets also limit trading activities.
• S&P 500 Futures snap two-day losing streak, yields rise for the third consecutive day.
• Risk catalysts are the key for clear directions, banking news, geopolitics are important for fresh impetus.

Risk appetite stays firmer despite early Wednesday’s inactive markets as traders seek confirmation of banking optimism amid an unimpressive calendar in Asia.

While portraying the mood, US Treasury bond yields print a three-day uptrend while the S&P 500 Futures print mild gains, the first in three. That said, the US 10-year and two-year Treasury bond yields recently refreshed intraday high around 3.58% and 4.12% in that order.

It should be noted that the receding fears of a banking crisis and hopes of less aggressive rate hikes from the top-tier central banks seem to gain the market’s attention. Also keeping the traders positive are chatters that the likely recession in some of the developed countries will be less severe than initially expected.

Furthermore, recently mixed US data and challenges for the Fed hawks also keep the market players optimistic, which in turn weigh on the US Dollar even as the yields recover of late.

Alternatively, headlines from the South China Morning Post (SCMP) suggest that the US has added 5 Chinese firms to its trade blacklist, which in turn should have probed the market’s optimism.

On the same line is the news that Australian Treasurer Jim Chalmers will convene a meeting of the country's top financial regulators to check how the latest volatility in global financial markets could affect the country, an official in the treasurer's office said on Tuesday per Reuters, prod the optimism. Furthermore, a discussion revealing the US and European regulators’ dislike for the latest banking fallouts and risks associated with it joined the much-debated $5.4 million Credit Default Swap (CDS) trade of Deutsche Bank to prod the risk-on mood.

Moving on, the second-tier US housing numbers may entertain market players but more important will be the headlines surrounding the global banking sector's health and easing fears of more rate hikes by the top-tier central banks.

Also read: Forex Today: Dollar keeps moving south as markets settle down