S&P 500 Futures remain positive, US 10-year Treasury yields recover losses

• S&P 500 futures extend Thursday’s gains, follow Wall Street’s footsteps.
• US 10-Treasury yields bounce back from the three-day low.
• US-China tension renews, trade negotiators will be on the call early next week.
• US employment data, trade/virus update will be the key.

While portraying risk-on sentiment, S&P 500 Futures register 0.15% gains to 2,885 whereas US 10-year Treasury yields rise 1.2 basis points (bps) to 0.643% amid early Asian session on Friday.

In doing so, the equity gauge carries the previous day’s recovery gains, also copies Wall Street’s performance, while US bonds yields bounce off three-day low.

News that top diplomats from the US and China will renew trade negotiations as early as next week, per Bloomberg, initially triggered risk-on sentiment during Thursday. The moves were then carried forward by Japan’s acceptance of Gilead’s Remdesivir as a cure to the coronavirus (COVID-19).

Although the news favored equities to remain on the front-foot, US bond yields fail to carry Wednesday’s run-up to three-week high amid downbeat signals from the US Federal Reserve policymakers.

The latest news from the Bloomberg mentioned that the White House trade adviser Peter Navarro again alleged China for the global virus outbreak and lies for the shortage of Personal protective equipment (PPE).

Moving on, the markets are likely to witness the pre-NFP trading lull but trade/virus headlines could offer intermediate moves. Further, the US employment report for April is likely to weigh on the market’s sentiment considering the virus-led lockdowns during that month. In regards to this, Goldman Sachs said, “Nonfarm payrolls (NFP) declined by 24 million in April, the unemployment rate rose from 4.4% to 14.0%.”