Bonds gained and equities steadied after benign US inflation data reinforced expectations that the Federal Reserve will cut interest rates this year, helping calm markets unsettled by concerns over AI disruption. Gold slipped.
Government bonds rose in Australia and New Zealand, and Treasury futures were steady as traders continued to fully price in a Fed cut in July and a strong likelihood of a move in June.
US inflation data lifted Treasuries on Friday, with the 10-year and the policy-sensitive two-year yields dropping five basis points.
Asian equities were flat with the MSCI Asia Pacific Index hovering near its record high levels after gaining about 11% this year. Equity-index futures indicated a modest gain for European stocks.
The moves opened a week marked by Lunar New Year holidays, with mainland China closed throughout. There will also be no cash trading in Treasuries on Monday as the US observes Presidents’ Day holiday.
The trading signaled a measure of stability after the S&P 500 notched two consecutive weekly declines driven by uncertainty over the disruptive impact of AI on businesses.
