US Treasury yields, S&P 500 Futures print mild losses on coronavirus jitters
- US 10-year Treasury yields drop back to 1.26%, S&P 500 Futures print three-day downtrend.
- Australia refreshes previous records of infections, New Zealand cases jump as well.
- FOMC Minutes favor tapering concerns but not rate hike, mark dissatisfaction from employment recovery.
- DXY refreshes multi-day high amid risk-off mood, commodities drop.
The escalating Delta covid variant concerns weighed on the market sentiment during early Thursday. While portraying the mood the US bond coupons and the stock futures both printed mild losses.
That said, the US 10-year Treasury yields drop 1.1 basis points (bps) to 1.26% whereas the S&P 500 Futures drop 0.05% to mark the third daily fall.
Virus infections in Australia jump to a fresh high since August 2020 and push New South Wales (NSW) to extend the local lockdowns to late August. New Zealand’s daily covid cases jump to 10 from 1 marked on Tuesday. On the same line, Reuters said, “The United States leads the world in reported COVID-19 cases and deaths. Daily U.S. cases soared from fewer than 10,000 in early July to more than 150,000 in August as the Delta variant took hold.”
In addition to the worsening coronavirus conditions, the July Federal Open Market Committee (FOMC) Minutes also weighed on the risk appetite. The FOMC minutes shed the rate hike concerns, despite supporting the tapering, while also conveying the dissatisfaction of employment recovery among the policymakers.
The risk-off mood underpins the US dollar, due to its safe-haven allure, which in turn propels the US Dollar Index (DXY) towards the yearly top, up 0. 26% intraday to 93.40. The DXY upside weighs on the prices of gold and WTI crude oil, down 0.12% and 0.33% on a day by the press time.
Looking forward, a light calendar comprising the US Jobless Claims and monthly Philadelphia Fed Manufacturing Index for July may offer short-term direction. However, major attention will be paid to the COVID-19 headlines and central bank comments, if any. Overall, the risk aversion may keep favoring the US dollar bulls and probe equities.