The interest rate relief this week is pervasive, however, as the Federal Reserve, European Central Bank and Bank of England all paused tightening and U.S. Treasury debt sales worries ebbed somewhat.
Ten-year U.S. Treasury yields have recoiled almost 30 basis points from Wednesday’s highs to sit at 4.66% – and are on course for their biggest weekly drop since March.
U.S. Treasury and equity market volatility gauges have subsided to their lowest levels since early last month.
What’s more, other incoming economic numbers underlined a reason for renewed market optimism after a torrid few months.
Labor Department statistics showed worker productivity grew faster than forecast in Q3 as labor costs declined — recording its quickest pace in three years. If sustained, that should help the Fed’s efforts to bring inflation back to target and may also reflect investment in technology and artificial intelligence.
Elsewhere, Chinese stocks also caught a bid at last after a survey showed services activity improved slightly last month, even though new orders rose at their slowest in 10 months and employment stagnated.
U.S. service sector readings are also due later on Friday. The dollar held steady ahead of the payrolls release.
With U.S. Secretary of State Antony Blinken in Israel seeking a pause in the Gaza war as Israeli troops surround Gaza City, investors will likely keep a wary eye on the conflict there as the weekend nears.
And the crypto world may well take a deep breath after FTX founder Sam Bankman-Fried was late Thursday found guilty of stealing from customers of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record.
