MSCI’s Asia-Pacific equity index added about 0.5%, with Japan, China and Hong Kong in the green. S&P 500, Nasdaq 100 and European contracts made modest gains after the S&P 500 ended little changed. The dollar edged up.

Treasuries were steady, leaving the 10-year yield at about 2.68%. The inversion between two-year and 10-year yields remained around the deepest since 2000, indicating worries about a recession amid tightening monetary policy.

Cleveland Federal Reserve Bank president Loretta Mester on Thursday reiterated the US central bank’s determination to quell price pressures. The Bank of England earlier unleashed its biggest interest-rate hike in 27 years and warned of a prolonged economic contraction.

Tighter policy is fanning economic angst and sapping assets like oil, which snapped a slide but remained below $90 at levels last seen before Russia’s war in Ukraine.

A global equity index is set for a third weekly advance in a recovery from bear-market lows, helped by resilient company profits in the US. The durability of the bounce remains in doubt because of central bank rate rises to tackle punishing inflation.

“It’s a little too early to say the risk is off the table,” Carol Schleif, deputy chief investment officer at BMO Family Office, said on Bloomberg Television. “Significant slowing” is starting to come in parts of the US economy, she said.

US payrolls on Friday are the next key data point for markets. Hiring likely softened in July but the labour market remains consistent with an expanding rather than recessionary economy and the Fed will press on with rate hikes, according to Anna Wong, chief US economist for Bloomberg Economics.

Investors are also continuing to monitor the aftermath of US House Speaker Nancy Pelosi’s visit to Taiwan. China, which regards the self-ruled island as part of its territory, reportedly fired missiles over Taiwan during military drills on Thursday. If confirmed, that would mark a major escalation. BM