Treasuries broadly held gains after a rally that pulled yields down from multi-decade highs, as traders looked past higher oil prices. Asian equities fell, with MSCI's Asia Pacific benchmark declining 0.8% and Hong Kong leading with a 2.6% drop. The benchmark 10-year Treasury yield held at 5.25%, having climbed to a 24-year high in the previous session.
Government debt in Japan, New Zealand, and Australia advanced. US bonds rebounded on Thursday from a global selloff as pressure in European markets spurred demand for haven assets. Mostly dovish commentary from Federal Reserve officials also supported the rally, ahead of Friday's US payroll data.
Meanwhile, the prospect of renewed US-Iran hostilities lifted oil, with Brent rising 0.3% to $102.60 a barrel. The Pentagon may deploy another aircraft carrier and 10,000 sailors to the Persian Gulf. French bond futures held near an all-time low, while German equivalents climbed amid concerns about contagion from France's debt risks.
In Japan, the yen was little changed around 158 per dollar after Tokyo's key inflation gauge rose, backing the Bank of Japan's stance. Fed Vice Chair Philip Jefferson and New York Fed President John Williams said policymakers should take more time before deciding on additional rate hikes, while Dallas Fed President Lorie Logan said the central bank must continue raising rates to cool inflation. With markets driven by geopolitical risk and monetary policy uncertainty, the tone this Friday will be dictated by any fresh headlines about the war or US nonfarm payrolls data.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing