S&P 500 Futures prod optimists despite softer yields as traders await key statistics, events

• Market sentiment remains dicey as economic calendar braces for top-tier catalysts.
• S&P500 Futures struggle to defend two-day winning streak, yields remain pressured.
• US Dollar holds lower grounds and helps commodities, Antipodeans to grind higher.
• US CB Consumer Confidence will entertain intraday traders ahead of key inflation, employment data.

The risk appetite dwindles during early Tuesday, after an optimistic start of the week, as traders seek more clues to defend the previously firmer sentiment, especially amid a light calendar in Asia and a few macro headlines to track.

While portraying the mood, the S&P 500 Futures lack clear directions around 4,445 after rising in the last two consecutive days whereas the US 10-year Treasury bond yields remain pressured around 4.19% by the press time. It’s worth noting that the US two-year bond coupons reversed from the highest level since 2007 the previous day and remained depressed near 5.00% by the press time.

Headlines suggesting challenges for the global central bankers, due to the mixed data and looming recession woes, keep traders on their toes after the policymakers defended their respective hawkish practices at the last week’s Jackson Hole Symposium.

Notable among them was Fed Chair Jerome Powell who showed readiness for rate hikes while pushing back rate cut bias. However, Powell’s speech also highlighted the data dependency and hence increased the importance of the incoming statistics, as well as amplified uncertainty about the US central bank’s next moves. Alternatively, Cleveland Fed Bank President Loretta Mester favored a rate hike, even if not in September, while the odds of witnessing an increase in the Fed rate in November improved of late, per the CME’s FedWatch Tool.

Elsewhere, the mixed updates about the US-China trade talks in Beijing join the International Monetary Fund (IMF) Director Kristalina Georgieva’s readiness to visit the senior leaders of China’s Communist Party prod the risk appetite.

On Monday, China’s halving of the stamp duty on stocks trading joined a Wall Street Journal (WSJ) piece suggesting Chinese Communist Party Chairman Xi Jinping’s indirect push for stimulus to favor market sentiment. On the same line were the global policymakers’ inabilities to please markets with a major hawkish surprise during the annual Jackson Hole Symposium.

Against this backdrop, the US Dollar Index (DXY) remains on the back foot around 103.95 by the press time, after reversing from an 11-week high to snap a two-day winning streak the previous day. That said, the Gold Price joins the AUD/USD and NZD/USD to print mild gains at the latest. It’s worth noting that the market’s indecision prods the Oil price after a three-day uptrend.

Moving on, Germany’s GfK Consumer Confidence Survey for September will become the immediate catalyst for the traders ahead of the US Conference Board’s (CB) Consumer Confidence Index for August, expected at 116.2 versus prior 117.00. However, major attention will be given to the Fed’s preferred inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) Price Index for July and Nonfarm Payrolls (NFP) for August.

Also read: Forex Today: US Dollar weakens slightly as risk sentiment improves