S&P 500 Futures print mild gains, US T-bond yields drop as traders seek clear view on Ukraine

• Market sentiment remains cautiously optimistic amid indecision over Russian military presence in Kyiv.
• S&P 500 Futures fail to track Wall Street’s losses, US 10-year Treasury yields snap four-day uptrend.
• Inflation fears keep grinding traders, US data will offer additional signals after CPI’s run-up to refresh 40-year high.

Mixed signals over Russian military presence and its invasion of Ukraine allowed the risk appetite to improve during early Friday in Asia. Also helping the market sentiment could be a lack of major data/events.

While portraying the mood, S&P 500 Futures rise six points, or 0.15% intraday, to 4,263 whereas the US 10-year Treasury yields drop 2.4 basis points (bps) to 1.985% by the press time. However, Japan’s Nikkei 225 returned to the losses with a 1.70% daily fall at the latest, after rising the most since June 2020 the previous day.

Reports of a Russian military attack on Kharkiv institute that contains an experimental nuclear reactor initially challenged the market’s mood before the news of no negatives tamed fears. In the same way, chatters swirled that Moscow’s forces are gradually dispersing and may be retreating also favored the optimists before the US Satellite company Maxar’s update suggesting more troops being redeployed.

Elsewhere, inflation fears also weigh on the market sentiment but hopes that the Fed will overcome the crisis, backed by global oil producers’ readiness to battle the supply crunch, seemed to have underpinned the recently positive mood. It’s worth noting that the US Consumer Price Index (CPI) rose to the fresh 40-year high while matching the 7.9% YoY forecast for February the previous day.

Amid these plays, WTI regains upside momentum but the gold and the US Dollar Index (DXY) remain pressured by the press time.

Moving on, geopolitical headlines will be important to watch for clear directions as the United Nations (UN) is up for a Security Council on request from Russia. Also watchful is the US Michigan Consumer Sentiment Index for March, expected 61.3 versus 62.8.