S&P 500 Futures drop 1.5% as US-China tension flares up risk aversion

• S&P 500 Futures registers three-day losing streak to revisit one-week low.
• US 10-year Treasury yields down 2.2 basis points (bps) to 0.618%.
• US President Trump cites an intelligence report to allege China for the virus outbreak.
• Positive news concerning the virus cure fails to get traders’ attention in Asia.

With the US-China tussle fuelling the market’s risk-off sentiment in full stream, S&P 500 Futures drop over 1.5% to 2,775 during the early Asian session on Monday. While also portraying the risk aversion, US 10-year Treasury yields slip 2.2 bps to 0.618% by the press time.

US President Donald Trump cheers his ability to hold China responsible for the global coronavirus (COVID-19) outbreak as his latest tweet reads, “Intelligence has just reported to me that I was correct, and that they did NOT bring up the Coronavirus subject matter until late into January, just prior to my banning China from the US Also, they only spoke of the Virus in a very non-threatening, or matter of fact, manner…”

Additionally, US Secretary of State Mike Pompeo also alleged, during the interview in the AP’s This Week, the dragon nation for the current global crisis due to the pandemic.

In return, China’s Global Times considers the US diplomat’s comments as a bluff to woo the voters.

It should also be noted that the Telegraph relies on US President Trump’s adviser Jack Keane, to say that China is eclipsing the US in Asia.

Amid the pessimism surrounding US-China relations, the markets failed to cheer the news that Gilead’s Remdesivir, a much-championed drug for the COVID-19, will be out during this week.

Amid a light economic calendar in Asia, traders will keep taking clues from the US-China drama, which in turn is likely to weigh on the market’s risk-tone and drag the antipodeans further towards the south. It’s worth mentioning that Japanese banks are off today and may limit the market’s reaction to the risk-off sentiment.