Stocks Bounce Back as Bond Yields Ease Ahead of US Jobs Report
The European session has seen stocks advance as bond yields ease ahead of the highly anticipated US non-farm payrolls (NFP) report. The bond market continues to be a major driver, with yields falling back after investors await fresh clues from the NFP. Ten-year Treasury yields have dropped to 5.22%, down from yesterday's high of 5.34% - the highest level since 2002.
In Europe, 10-year German bund yields have also cooled to 3.40%, holding much lower compared to the high earlier this week of 3.65%. This has provided equities with a lift, as European stocks bounce back and US futures build on the rebound from yesterday. The DAX is up by 0.9% and CAC 40 up by 0.5%, while S&P 500 futures are up 0.4% ahead of the open.
The lower borrowing costs and softer inflation worries, coupled with a drop in oil prices to $89.50, have helped stocks recover. However, market participants remain cautious as they await the US jobs report, which could reset the mood. The ECB policymaker Rehn has flagged energy and AI risks, keeping rate outlook uncertain.