EuroStoxx 50 futures rose 0.2%, and those for the S&P 500 gained 0.1% overnight as equities in both Japan and South Korea advanced. The Hang Seng has surged since China announced its stimulus plan in September and now sits around the 22,000 level, although the buying frenzy appears to have waned slightly. Markets in mainland China are closed for Golden Week. The dollar is poised for its biggest weekly gain in nearly six months as traders adjust expectations for aggressive rate cuts in the US. Currently, 66 bps of cuts are priced into the OIS curve by the end of the year.
WTI and Brent Crude eased slightly after both surged more than 5% to one-month highs yesterday. The primary market concern is potential supply disruptions from Iran, while demand for oil remains strong.
Amidst the geopolitical uncertainty, investors are also watching for signs of a healthy US economy, with non-farm payrolls due today. Unemployment is forecast to hold steady at 4.2% for September, and payrolls are expected to rise by 150,000. Even if unemployment ticks up and a more aggressive rate cut becomes likely, the dollar could stay supported due to safe-haven demand.
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