Key points:
The U.S. dollar slipped after its sharpest drop in a month, tracking a pullback in U.S. Treasury yields from three-month highs.
The 10-year yield dropped to 4.19%, easing from a peak of 4.26% reached earlier this week. Despite Friday’s retreat, the dollar is still on course for a fourth consecutive weekly gain, driven by stronger-than-expected U.S. economic data.
Picture: The 10-year U.S. Treasury note has fallen from 114.99 to 111.38 with weak momentum as seen on the VT Markets app.
Markets remain cautious as investors anticipate the Federal Reserve’s next policy steps, with a key payrolls report due on November 1, followed by the U.S. presidential election on November 5.
Asian stock markets showed mixed performances, with Japan’s Nikkei down 1% as of 0154 GMT. The yen rebounded sharply from a three-week low against the dollar, adding pressure to Japan’s equity market ahead of a general election this weekend.
The election outcome could disrupt the ruling coalition’s hold on power, increasing political risks for market participants.
Looking ahead, traders will closely monitor the mega-cap earnings reports next week from companies such as Alphabet, Amazon, Meta, and Apple.
These earnings will play a critical role in shaping market sentiment, particularly in tech-heavy indices.
Meanwhile, rising bond yields continue to weigh on global stock markets, with the MSCI world equities index down 1.2% for the week. Safe-haven gold is on track for a third consecutive weekly gain, trading at $2,729 per ounce, though it eased slightly on Friday.
Crude Oil Prices Rise as Middle East Tensions Support Gains
In the energy market, crude oil prices are set for a weekly advance as risks to output remain elevated amid the ongoing Middle East conflict.
Brent crude futures rose 0.6% to $74.83 a barrel, with U.S. West Texas Intermediate following suit at $70.62 per barrel. Oil traders remain watchful as geopolitical tensions continue to support higher prices.
As the U.S. presidential election draws nearer, speculation around a potential Donald Trump victory has supported U.S. yields and the dollar.
Trump’s policies, which include inflationary tariffs and tax cuts, are likely to influence market expectations on inflation and rates.
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