S&P 500 Futures consolidate heaviest losses in three weeks above 3,900 as US Treasury yields ease

• S&P 500 Futures bounces off weekly low, flashed previous day, as bond bears catch a breather, fresh vaccine optimism.
• US 10-year Treasury yields step back from January 2020 top.
• Reflation fears step aside, for now, as geopolitical tension returns to the desk.
• BOJ, risk catalysts to offer an easy day.

S&P 500 Futures keep corrective pullback from the week’s bottom of 3,900 while taking rounds to 3,915, up 0.15% intraday, during early Friday. The risk barometer dropped the heaviest in three weeks the previous day as reflation risks returned to the table. Though, the easy mood of the US bond bears seems to favor the American equity derivate off-late.

US 10-year Treasury yield drops 1.7 basis points (bps) by the press time. Even so, the widely followed bond coupon stays near the highest levels in 14 months flashed the previous day as markets reject the Fed’s efforts to cut the rate-hike odds.

Also likely to have favored the mood could be covid vaccine optimism conveyed by US President Joe Biden and South Korea, not to forget the European Medicines Agency (EMA).

It should, however, be noted that the US-China tussle in Alaska and American Defence Secretary Lloyd Austin’s warning to North Korea weigh on the risks by the press time. Additionally, the pre-BOJ mood and a light calendar add to the sluggish performance of the markets.

Given the key central bank events of the week have already been out, but not loud, market players will keep their eyes on the risk catalysts, mainly the geopolitical headlines and vaccines, for fresh impulse. On the calendar, the Bank of Japan (BOJ) and Canadian Retail Sales may entertain traders.

Read: BoJ Preview: Policy review to focus on yield curve control framework and ETF-buying