US stocks are set to trade sideways on Friday as the rally triggered by the Federal Reserve’s dovish comments this week loses some of its momentum.With a little over 30 minutes to go before the markets open, US stock futures pointed to small changes at most for the main three indices. The Dow Jones Industrial Average and the Nasdaq Composite are poised to open 0.1 per cent higher while the S&P 500 is expected to add a quarter of a point.
Industrial production data, due out at 9:15am EST, could provide the impetus needed to draw traders out. Investors are also waiting for the start of the Group of 20 finance ministers in Germany.
Meanwhile, US government bonds resumed their rally following yesterday’s moderate sell-off. The yield on the 10 year Treasury, which moves inversely to price, fell 1.3 basis points to 2.53 per cent. It had its best day since June on Wednesday after the Fed refrained from accelerating its outlook on the pace of future rate rises.
The dollar was steadier on Friday following two days of retreats. The DXY index – which measures the buck against a basket of major currencies – crept 0.1 per cent higher. However, it is still poised for its worst week in over two months.
Emerging markets assets continue to find favour among yield hungry investors. The MSCI Emerging Market index tacked on 0.3 per cent, taking its gains this week to 4.3 per cent – its best weekly stretch since last July.