Treasuries edged up to recover some of their losses from a higher US inflation print, which led traders to trim bets on an interest-rate cut by the Federal Reserve next month.
Bonds advanced across the curve, with yields on the policy-sensitive two-year note falling two basis points to 3.71%. Futures for European stocks rose 0.5% while that for the S&P 500 advanced along with Asian shares.
Oil steadied ahead of the summit between the US and Russian presidents in Alaska later Friday.
The dollar weakened while the yen led most Group-of-10 currencies higher. Shares in Hong Kong weakened 1% after data showed China’s economy slowed in July with factory activity and retail sales disappointing, suggesting Donald Trump’s trade war is starting to weigh on the world’s No. 2 economy.
Japanese shares gained 1.6% after the country’s economy expanded faster than expected last quarter. Risk sentiment had been buoyed in previous days by expectations of monetary easing in the US, with traders fully pricing in a quarter-point reduction.
