European stock futures saw an increase, reflecting a surge in Asian equities and currencies driven by optimism that the Federal Reserve is approaching the conclusion of its tightening cycle.
The MSCI Asia index rose by more than 1% on Friday, marking its strongest performance in two months. Hong Kong indices led the regional gains. Meanwhile, US stock futures declined following disappointing results from Apple Inc. Contracts on the Euro Stoxx 50 edged up in anticipation of eurozone unemployment data scheduled for release on Friday.
The Korean won strengthened by over 1% against the dollar, leading among Asian currencies. The Bloomberg Dollar Index fell for a third consecutive session, on track for its most substantial weekly decline since mid-July.
Investors are closely monitoring the US non-farm payrolls data scheduled for later in the day to gain insights into the Fed’s interest rate trajectory. Bloomberg Economics anticipates that the pace of hiring will slow to less than half of September’s robust gain.
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Anticipated US economic shift: projections for payroll and unemployment trends
Pre-payroll data indicated a notable three-year high in US labor productivity, helping to counterbalance the inflationary impact of recent wage growth.
Longer-dated Treasury yields experienced a decline on Thursday, with the 10-year yield dropping by nearly eight basis points. Trading in Asian Treasuries will be closed due to a holiday in Japan.
UBS predicts that the 10-year Treasury yield will reach 3.5% by June of next year as the Fed shifts its focus from raising rates to potentially cutting rates. However, some hold a more cautious view.
Oil is poised for its second consecutive weekly loss as the conflict between Israel and Hamas remains contained, and demand signals exhibit some uncertainty. Gold is on track for its first weekly decline in four weeks. Bitcoin experienced a drop on Friday.
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