In U.S, the dollar held a rally in the wake of the inflation print and caution triggered by a U.S. warning that Russia may be weighing a potential invasion of Ukraine. Five-year notes led a continued selloff in Treasuries after a trading holiday. The spread between 5-year and 30-year yields shrank, at one point to the narrowest since March 2020. A rout hit bonds Wednesday after the fastest U.S. inflation in three decades stoked bets on faster monetary tightening. Today, traders will be awaiting University of Michigan survey results Friday that is expected to consumer expectations of inflation in the coming year climbed to a fresh 13-year high.

In Asia stocks rose, and U.S. equity futures were steady Friday, bringing some relief for shares from the inflation fears still roiling Treasuries. The MSCI Inc.’s Asia-Pacific gauge posted its biggest rise this week, helped by a rally in Japan and a jump in China’s technology stocks. The view that the worst of Beijing’s regulatory blitz has passed supported sentiment. President Xi Jinping delivered the first doctrine on Communist Party history by a Chinese leader in 40 years, giving him a mandate to potentially rule for life. Xi’s “common prosperity” drive to curb inequalities has spawned overhauls that whipsawed Chinese sectors ranging from technology to property. There are tentative hopes the strictures may ease, with Goldman Sachs Group Inc. predicting a brighter outlook for Chinese equities. It said onshore and offshore stocks will return 16% and 13% in the next 12 months respectively.

Crude prices weakened Friday, weighed by the continued strength of the U.S. dollar which makes the commodity more expensive for non-U.S. buyers. U.S. crude futures traded 0.8% lower at $80.94/bbl while the Brent contract fell 0.9% to $82.12/bbl. Both contracts are on course to record losses of around 0.7% this week.

European markets closed higher on Thursday, showing underlying strength in coping with a surprisingly strong reading on U.S. inflation, which raised the possibility of the Federal Reserve bringing forward plans to lift interest rates. The DAX futures contract in Germany traded 0.1% higher, the CAC 40 futures in France closed 0.2% higher from its opening levels and the FTSE 100 futures contract in the U.K. closed 0.6% higher. European stock markets are expected to open largely unchanged Friday, consolidating after withstanding the shock of a sharp rise in U.S. inflation, helped by generally positive corporate earnings. The European economic calendar centers around Eurozone industrial production data for September, while the U.K. and the European Union are due to enter new negotiations over trade arrangements in Northern Ireland, to avoid a potential trade war.

Ethiopia says it will pay a $33 million Eurobond coupon due Dec. 11, hours after S&P Global Ratings cut the nation’s sovereign credit rating for the third time since January. S&P lowered Ethiopia’s rating deeper into junk to CCC, citing a risk to debt payments as the civil and geopolitical conflict in Africa’s second-most populous nation worsens. Ethiopia’s Eurobonds have plunged to fresh records as fighting spread across the country and toward the nation’s capital. S&P estimates Ethiopia’s external obligations at $5.5 billion in the three years to 2024.