US 10-year Treasury yields, S&P 500 Futures print mild gains ahead of inflation data

• US 10-year Treasury yields consolidate recent losses, S&P 500 Futures keep recovery from monthly low.
• Market sentiment improves on receding geopolitical fears, easing virus fears and vaccine hopes.
• Pre-CPI anxiety, tapering chatters challenge traders amid a light calendar in Asia.

Market sentiment improves during early Tuesday even as the US Consumer Price Index (CPI) data looms amid the Fed tapering concerns.

While portraying the mood the US 10-year Treasury yields rose 1.7 basis points (bps) to regain 1.34%, reversing the previous day’s losses. On the same line, S&P 500 Futures also keep the week-start recovery from a three-week low, up 0.17% intraday around 4,76 by the press time.

Behind the moves could the global push for faster vaccinations, recently by US President Joe Biden, as well as China’s recently assertive behavior with the global leader that push Biden to host a ‘Quad’ summit with India, Australia and Japan during late September.

Also positive for the risk appetite could be Iran’s readiness to surrender investigation rights at the nuclear facility.

On the contrary, fears of the Fed’s dialing back to the easy money, recently by the US second-tier employment releases and Producer Price Index (PPI), as well as comments from Philadelphia Federal Reserve Bank President Patrick Harker. On Monday, the policymaker refrained from signaling what will the US central bank do in the next week but pushed for sooner tapering.

It should be noted that the covid fears remain on the table and join the tapering chatters to challenge the optimists ahead of the key US inflation figures that will help forecast the next week’s Fed moves.

Should the US CPI for August manage to remain easy, joining the downbeat US NFP, risk-on mood can be witnessed, which in turn could underpin the Antipodeans and commodities.

Read: US Inflation Preview: CPI critical for taper, three scenarios for the dollar