Asia markets set for gains ahead of key economic data

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Hong Kong Street Scene, Mongkok District with busses

Nikada | E+ | Getty Images

Asia-Pacific markets were set to open higher at the end of the week, with investors awaiting a fresh round of data for more clues on the health of services activity through the region.

Services purchasing managers' index data from major economies including China, India and Hong Kong are set to be released throughout the day.

Futures for Hong Kong's Hang Seng index stood at 17,455, pointing to a higher open compared with the HSI's close of 17,230.59.

Japan markets were shut for a public holiday.

In Australia, the S&P/ASX 200 traded more than 1% higher.

Wall Street indexes rose on Thursday as Treasury yields fell, with investors betting the Federal Reserve could be done raising rates for 2023.

The Dow Jones Industrial Average ended 1.7%, higher, its best day since June. The S&P 500 added 1.89%, the first time the S&P 500 posted back-to-back gains of more than 1% since February.

The Nasdaq Composite climbed 1.78%, marking its best session since July.

— CNBC's Sarah Min and Alex Harring contributed to this report

Market sees only a small chance of a December rate hike

Markets found enough in this week's Federal Reserve meeting to suggest that there's only a small chance of any additional interest rate hike.

The odds for a December increase fell Thursday morning to 14.6%, according the CME Group's FedWatch Tool, which uses fed funds futures pricing to gauge probabilities. A month ago, the chances of a move in December were at 39%.

Futures pricing, which can be volatile and swing quickly, now indicates that the first rate cut could come as soon as May.

—Jeff Cox

Treasury yields keep sliding, pushing stock futures higher Thursday

Yields on Treasurys kept sliding early Thursday, helping push U.S. stock index futures higher as debate raged over whether "risk on" trades will return.

Two-year Treasury notes yielded 4.954% and 10-year notes had fallen all the way 4.691% after briefly topping 5% two weeks ago. Bids in Treasurys come as the chance of another quarter point Federal Reserve rate increase at its Dec. 13 policy meeting crumbles -- down to a less than 1 in 7 probability (14.6%), according to the CME FedWatch tool that uses interest rate futures prices.

S&P 500 index futures were recently 31 points higher at 4237, up about 0.7%, while Nasdaq-100 futures climbed 161 or 1.1% to 14,906.

As inflation weakens, "yields will probably drop further but settle at a much higher level than before the pandemic," London-based Capital Economics wrote Thursday.

— Scott Schnipper

Vix falls to lowest level in three weeks

The Cboe Volatility Index (VIX)— Wall Street's preferred fear gauge — traded as low as 16.12 on Thursday, a level not seen in three weeks. This comes as stocks rallied for a second straight day on hope the Federal Reserve is done raising rates for the year.