- S&P 500 Futures print mild losses, takes offers to refresh intraday low of late.
- Deadlock over US debt limit, stimulus join Powell’s readiness for tapering to challenge bulls.
- Shenzen government’s investigation of Evergrande assets contrasts PBOC-led optimism.
- Fed Chair Powell’s testimony, risk catalysts will be the key.
S&P 500 Futures take offers around 4,425, down 0.18% intraday during early Tuesday. In doing so, the risk barometer follows mixed catalysts to extend Wall Street losses.
Among the risk-negative headlines are related to the US debt limit extension and infrastructures spending bill. Earlier in Asia, US Treasury Secretary Janet Yellen pushed for swift address to the debt limit issue after the Senate’s failures to advance a measure to suspend the federal debt ceiling and avoid a partial government shutdown. However, US Senate Democratic Leader Chuck Schumer said that Democrats will take further action this week to avoid a government shutdown and debt default. Furthermore, House Speaker Nancy Pelosi showed optimism to tackle the deadlock of the US infrastructure stimulus bill the previous day but hinted at a lesser figure than President Joe Biden’s $3.5 trillion push.
On a different page, the prepared remarks of Fed Chair Jerome Powell for today’s testimony show the readiness of the US central banker to dial back the easy money amid heating inflation and employment recovery.
Goldman Sachs cuts China’s GDP while the Wall Street Journal (WSJ) hints at a new threat to the chip shortage, namely power cuts in Beijing. However, the People’s Bank of China (PBOC) indirectly hinted at supporting the real-estate firm the previous day while supporting the view to keep liquidity reasonably ample. It should be noted that the Shenzen government analyzes Evergrande assets and recently urged the real-estate player to pay to investors.
Elsewhere, Australia sounds optimistic over reaching the vaccination target of 80% while Japan is also up for removing the virus-led emergencies from Tokyo and 18 other prefectures.
It’s worth noting that the US Durable Goods Orders came in better than forecast the previous day while the Fedspeak kept taper tantrums on the table, which in turn offered a mixed closing by the Wall Street benchmarks.
Amid these plays, US 10-year Treasury yields ease from the fresh three-month high of 1.50% to 1.48% by the press time.
Looking forward, actual testimony by the Fed Chair Powell, speech from the European Central Bank (ECB) President Christine Lagarde and developments concerning the aforementioned issues should be watched for fresh impulse.