European stocks have been on track for a sixth successive week of gains and government bond yields globally traded near multi-week lows as investors reacted to positive data and signs central banks might not hike rates as aggressively as feared.
The 10-year Treasury yield dipped to 3.65 per cent on its return from the Thanksgiving holiday, its lowest since October 5 and down from as high as 4.34 per cent in mid October.
Germany's 10-year yield, the euro zone benchmark, stood at 1.91 per cent, just off a seven-week low hit a day earlier.
Europe's STOXX 600 was little changed on Friday and heading for a 1.5 per cent weekly gain, its sixth weekly percentage gain in succession, after taking a battering earlier this year
"The correction had affected all major asset classes with the exception of the dollar and hard commodities and it's now a big reversal of that," said Olivier Marciot, head of investments, for multi-asset, at Unigestion.
"The pace of the (central bank) tightening cycle was unprecedented and created that shock, and now that specific factor is stabilising it creates lift for all asset classes."
The US Federal Reserve has raised interest rates aggressively throughout this year, but a "substantial majority" of Fed policymakers agreed it would "likely soon be appropriate" to slow the pace of interest rate rises, minutes of their latest meeting showed on Wednesday.
Expectations that the peak in rates is approaching were raised earlier this month when US October inflation data came in cooler than expected.
Investors in European stocks are treating positive economic data as a reason to buy, and took heart from Wednesday's data showing the German economy expanded by 0.4 per cent on the quarter and by 1.3 per cent on the year - slightly above expectations - thanks to greater household spending.
S&P 500 futures are up 0.15 per cent, though trading is likely to be subdued after Thursday's Thanksgiving holiday.
Currency markets also reflect the recent improvement in risk sentiment, with the safe-haven dollar set for a weekly softening against most G10 currencies.
Sterling has been one of the better performers and hit a three-and-a-half month high of $US1.2153 on Thursday.
Asian shares were struggling more than their European peers after China reported another record rise in daily COVID infections along with more curbs, snuffing out recent hopes the country would phase out strict zero-COVID policies.
Hong Kong's Hang Seng dropped 0.5 per cent, led by a 2.29 per cent tumble for the tech sector, though Chinese onshore blue chips rose 0.5 per cent, buoyed by more government measures to support the slumping real estate market.
Oil prices rose sharply, reversing declines earlier in the week, with Brent crude futures up 1.58 per cent at $US86.69 per barrel and US crude futures 2.13 per cent higher at per cent79.6.
Gold ticked 0.2 per cent higher to about $US1,758 an ounce amid the dollar's weakness.