S&P500 Futures, yields aptly portray cautious mood ahead of key data, central bank announcements

• Market sentiment remains dicey as traders await top-tier data, events.
• S&P500 Futures retreat from 16-month high but lack downside momentum, Treasury bond yields edge higher.
• DXY lacks clear directions after bouncing off 15-month low, commodities, Antipodeans stay pressured.
• Fed Chair Powell’s speech, monetary policy announcements from BoJ, ECB and other top-tier data eyed for clear directions.

Risk profile stays sluggish early Monday as market players brace for a slew of top-tier data events. That said, an absence of impressive statistics during the early hours of the week, as well as a light macro, also restricts immediate moves of the market.

While portraying the mood, the S&P500 Futures seesaw around 4,565-60 as it struggles to extend the previous week’s U-turn from the highest level since March 2022. That said, the US 10-year and two-year Treasury bond yields edge higher around 3.85% and 4.85% in that order after posting the weekly gain in the last.

Elsewhere, the US Dollar Index (DXY) stays defensive around 101.00 after bouncing off the lowest level since April 2022 while prices of Crude Oil and Gold remain mostly pressured around $1,961 and $71.65 at the latest.

During the last week, the US equity benchmarks refreshed the yearly top and the Treasury bond yields reversed the previous weekly loss as an improvement in the US Retail Sales Control Group for June joined upbeat headlines from the technology and energy giants. It’s worth noting that the upbeat prints of the University of Michigan’s (UoM) Consumer Sentiment Index and consumer inflation expectations for July previously renewed hawkish bias about the Fed and weighed on the sentiment. However, the US Consumer Price Index (CPI) and Producer Price Index (PPI) for June joined the first below-expectations Nonfarm Payrolls (NFP) in 15 months to tease the Federal Reserve’s (Fed) policy pivot past July and drowned the US Dollar earlier in July but kept the sentiment firmer.

Elsewhere, the US-China tensions escalate as Taiwan's Foreign Ministry recently said that they have spotted Chinese military planes near the border. That said, Washington previously showed the mood to restore its political ties with Beijing via multiple diplomatic visits and hence suggest likely better days for the Sino-US trade.

It should be noted that the early-Monday releases of Australia and Japan's PMI, as well as New Zealand trade numbers, haven’t been positive to the sentiment by posting mixed outcomes.

Looking forward, the preliminary PMIs for July from the UK, Eurozone and the US will entertain the market players on Monday. However, major attention will be given to the monetary policy announcements from the US Federal Reserve (Fed), Bank of Japan (BoJ) and the European Central Bank (ECB). Also important will be the first readings of the US second-quarter (Q2) 2023 Gross Domestic Product (GDP) and the quarterly earnings releases from global equity giants like Apple, Meta and Alphabet.

Also read: Forex Today: A busy week ahead, and it's not all about central banks