- Market sentiment remains cautiously optimistic despite Thanksgiving holiday, light calendar.
- Fed Minutes propelled ‘pivot’ discussions, China brush aside virus woes to ease zero-covid policy.
- Wall Street closed positive, US Treasury bond yields refreshed weekly low.
The risk profile improves during early Thursday as a holiday in the US joins a light calendar. Also keeping the buyers hopeful are the expectations from the Chinese authorities, as well as chatters surrounding the Fed’s pivot and the easy monetary policy.
While portraying the mood, S&P 500 Futures print 0.25% intraday gains around the weekly high near 4,045 whereas the US 10-year Treasury yields remain depressed at around 3.69%.
It’s worth noting that the latest Federal Open Market Committee (FOMC) Meeting Minutes signaled that the policymakers discussed the need of slowing down the interest rate hikes. Additionally weighing on the Greenback were chatters over the “sufficiently restrictive” level of the Federal Reserve’s (Fed) interest rates, as indicated in the Fed Minutes.
Elsewhere, Bloomberg said that China’s daily Covid infections climbed to a record high, exceeding the previous peak in April, as it battles an outbreak that has grown since the country adopted a more targeted approach to containing the virus. The news also added that the country reported 29,754 new cases for Wednesday, more than the 28,973 infections recorded in mid-April when the financial hub of Shanghai was in the midst of a grueling two-month lockdown that saw residents struggle to access food and medical services. Even so, Chinese policymakers are warned about altering the zero-covid policy in the latest mediate coverage.
As a result, the ignorance of the Covid conditions and hopes of easy Fed rates seemed to have favored the risk-on mood during inactive markets.
Even so, second-tier European data and talks over the bloc’s recession, as well as geopolitical tension with Russia, might challenge the sentiment. Additionally, higher coverage of China’s COVID-19 woes and an off in the US may allow traders to pare recent gains.
Read More: S&P 500 Futures print mild gains, Treasury yields struggle amid Fed, Covid chatters