Central bank signals dominated Thursday's macro landscape: multiple Fed officials including Vice Chair Philip Jefferson, NY Fed President John Williams, and Minneapolis Fed President Neel Kashkari all emphasised data dependence and trimmed market expectations for an October rate hike to roughly 25–38% odds, even as the US 10-year Treasury yield briefly spiked to 5.34% — its highest level since 2002 — before partially retracing to close at 5.29%. The Bank of England held rates at 3.75% in a razor-thin 5-4 vote, with four members favouring a cut, while the ECB remained on hold; geopolitical risk intensified with reports of stalled US-Iran talks, Houthi strikes on Saudi Arabia's Abqaiq facility, and US plans to deploy an additional aircraft carrier and up to 10,000 troops to the Middle East, pushing Brent crude back toward and above $100 per barrel.
The cross-asset picture heading into Friday's US open is defined by a steepening Treasury curve — with the 30-year yield up 5 basis points to 5.64% and the 2-year down 1 basis point to 4.88% — alongside a firmer dollar (DXY +0.64% to 102.1) and elevated oil prices that are simultaneously stoking inflation concerns and supporting energy equities. The all-important September Non-Farm Payrolls report at 08:30 ET, with consensus at just 89K versus a prior 162K, is the single most consequential data point for the session: a material miss could reinforce the Fed's pause narrative and provide relief to rate-sensitive equities, while a beat risks reigniting long-end yield pressure and challenging the afternoon rebound seen in US stocks on Thursday.