Asian stocks surged on Friday, following Wall Street's record high close. Treasury yields also dropped to four-month lows as traders increasingly expect the Federal Reserve to cut rates this month, despite looming U.S. jobs data later in the day.
The U.S. dollar slipped slightly after gaining ground on Thursday from weaker labor market figures. Gold remained steady after a brief pullback, while oil prices declined for a third consecutive day ahead of an upcoming OPEC+ meeting to discuss output hikes.
In anticipation of the Fed's two-day rate-setting meeting on September 17, markets are nearly certain of a quarter-point cut, with expectations of further reductions later in the year.
Recent data pointed to a softening job market, with an increase in new applications for unemployment benefits and slower private payroll growth. Economists project a modest gain of 75,000 jobs in August, reinforcing the likelihood of a Fed rate cut.
Global equities have been bolstered by expectations of looser monetary policies, with the S&P 500 reaching a new high. Similarly, Japan's Nikkei and Taiwan's stock benchmark approached record levels, while Hong Kong and Chinese markets saw moderate gains. Australian stocks also climbed amidst positive market sentiment.
The focus remains on Friday's non-farm payrolls report, which could shape market expectations for future Fed action. Analysts are closely monitoring whether the Fed is adequately positioned to lower rates to support economic growth or risks falling behind the curve.
Amidst global economic uncertainties, long-end sovereign bonds experienced heightened volatility this week. However, the belief in imminent rate cuts by the Fed helped stabilize bond yields, with U.S. Treasury rates hitting multi-month lows.
The U.S. dollar index saw a marginal decline after recent gains, while gold prices and crude oil futures experienced minor fluctuations. Oil prices have declined amidst discussions of potential production increases by OPEC+ members.
Overall, investor sentiment remains positive, driven by expectations of central bank support and optimism surrounding trade talks. The market eagerly awaits further developments in monetary policy and economic data to guide future investment decisions.
