Chinese stocks rallied Thursday, running against the grain of declines across the region, while the 10-year Treasury yield drifted lower after touching the highest level in 16 years.
US futures ticked slightly higher after the S&P 500 slid 1.6% on Thursday, the most since March, and all major US equity benchmarks slipped below their 100-day moving averages. Treasury 10-year yields eased lower after initially rising on the long end of the curve in Asian trading, pushing the 10-year yield to 4.5%, the highest level since 2007. Australian and New Zealand bond yields also advanced, while the Bloomberg dollar index steadied. Rising Treasury yields on Thursday followed the latest reading on the US labor market, which reinforced the case for the Federal Reserve’s higher-for-longer stance.
“On net, it was a solid read from one of the closest to ‘real time’ employment data investors are afforded,” said Ian Lyngen at BMO Capital Markets. “It also marginally increases the chances the Fed hikes in November and certainly reinforces the Fed’s messaging regarding avoiding cuts as long as possible in 2024.”