US equity futures remained flat on Friday, while the US dollar weakened and Treasury bond yields fell after three days of gains.
The renewed strength of the yen is now a challenge to the recovery of global markets. This comes after a more upbeat US jobless claims report, which helped ease fears of a recession fueled by disappointing jobs data.
Focus now shifts to a new batch of US economic indicators due to be reported next week, including key consumer price (CPI) data.
Investors are also bracing for mixed signals from Federal Reserve officials. Kansas City Fed President Jeffrey Schmid, in his speech on Thursday, suggested that he is not yet ready to support a rate cut, given that inflation is still above target.
His cautious stance has led market players to further reduce expectations for aggressive Fed easing in 2024, which has indicated a 60% probability of an interest rate cut by the Fed.
Current market prices now indicate around a 40 basis point cut is expected for September.
Meanwhile, oil prices remained steady after Thursday's gains, amid continued tensions in the Middle East.
Gold prices, however, continued their downward trend. Investors remain cautious, as they navigate a landscape marked by uncertainty and mixed signals from central banks.
