Sentiment improves as Treasury yields retreat from the highs ahead of the weekend
Wall Street rose on Thursday to trim its sharp monthly losses as Treasury yields retreated from multiyear highs along with the US dollar. The S&P 500 rose 0.59%, the Dow gained 0.35%, and the Nasdaq Composite climbed 0.83%. Equities are headed for what’s been a tough trading month, with the Dow poised to end 3% lower in September, the S&P 500 is slated to finish down 4.6% and the Nasdaq is on pace to lose nearly 6% for the month. Now, investors turn their attention to the latest PCE price index reading due later in the day.
In Asia, stocks were mixed on Friday after solid losses this week, with holidays in China and South Korea keeping trading volumes muted ahead of the weekend. Hong Kong’s Hang Seng led the gains, rallying more than 2% as it rebounded from a multi-month low. The regional index is poised to post a quarterly loss of around 4% — the deepest in a year. Japan’s Nikkei 225 finished nearly unchanged on Friday after the data painted a mixed picture of the Japanese economy. Inflation grew less than expected in September, while unemployment rose last month.
After a five-day losing streak, European equities opened higher today, with investor sentiment improving as yields retreat from the highs this week. 10-year Treasury yields are now down 4 bps to 4.556% on the day. The pan-European Stoxx 600 index was up by 0.4% in early deals. On the data front, the final UK GDP for the second quarter came in at 0.2% QoQ, matching the initial estimate of 0.2%. Annually, the economy expanded 0.6% versus 0.4% expected. In the US, stock index futures look mixed-to-lower in early pre-market trading.
The dollar is down to start European trading as Treasury yields continued to retreat from the highs ahead of the weekend. The USD index registered fresh November highs earlier in the week to find resistance marginally below the 107.00 figure. On Friday, the DXY has been suffering losses for the second day in a row, targeting the 105.50 intermediate support after a failure to hold above 106.00 earlier in the day. Should the upcoming US PCE report disappoint by a slower inflation, the greenback may see even deeper losses later in the day.