Stocks set for strongest week of 2023 on interest rate cheer
By Tom Westbrook
SINGAPORE (Reuters) — Stocks were headed for their biggest weekly rise in a year on Friday, while bonds rallied and the dollar was on the back foot as investors cheered a pause in U.S. interest rate hikes.
U.S. jobs data due later in the day is the next major focus.
Benchmark 10-year Treasury yields are down more than 20 basis points in two sessions since the U.S. Federal Reserve left rates on hold on Wednesday and Chair Jerome Powell said risks to the outlook for rates settings was balanced.
Cash Treasuries were untraded in Asia as markets were closed in Tokyo due to a holiday, and 10-year futures held recent gains to imply yields were steady at 4.67%. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9%.
S&P 500 futures were 0.1% lower, weighed by a 3% fall for Apple shares (NASDAQ:AAPL) in post-market trade after the tech giant's sales forecast fell short of expectations.
World stocks are up 4.2% for the week so far, their largest weekly rise since November 2022.
«Markets have become increasingly confident that rates in the U.S. have now peaked,» said ANZ analysts in a note.
«As logical as that is… Powell did warn that for higher bond yields to forestall another hike, they'd need to stay high, so markets can't have their proverbial cake and eat it too.»
The U.S. Treasury department had also said on Wednesday that it would sell less longer-dated debt at auction than had been expected and a softer-than-forecast manufacturing survey helped reinforce bets that no further hikes are necessary.
On Thursday, the Bank of England also left interest rates on hold and stressed it did not expect to cut them any time soon.
Ten-year gilts had their sharpest rally in more than a month, sending yields
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