LONDON/TOKYO: Global stocks were set to end the week lower as looming US data and a weekend election in Japan halted a rally already marred by a short White House race and expectations that the Federal Reserve will resist rapid rate cuts interest.

MSCI’s index of global shares was flat on the day but headed for a 1.2 percent decline for the week, its first weekly loss of the month, while European shares started the day 0.2 percent lower.

U.S. Treasuries drew buyers on Friday but were still headed for a sixth straight week of losses, futures dragged down Wall Street’s S&P 500 in weak trading later in the day and the dollar fell.

A parade of key events for markets is about to begin, with Japan’s parliamentary election on Sunday and the US monthly payrolls report on Friday.

Gains are also due from tech megacaps Alphabet, Amazon, Apple, Meta and Microsoft. Next up is the US presidential election on November 5, with a Fed rate decision two days later.

Markets rallied toward Donald Trump’s return to the White House, driving Wall Street stocks to record highs earlier this month on bets that business tax cuts would protect the economy from further inflation triggered by his proposal to raise import tariffs.

But with Republican nominee Trump and Democratic Vice President Kamala Harris neck and neck in key swing states, investors are worried about a contested result roiling global markets and triggering new geopolitical uncertainty.

“I think we might have two or three months of maximum uncertainty and social risk. And the markets wouldn’t like that at all,” Carmignac chief economist Raphael Gallardo said.

Britain’s 10-year gilt yield, at 4.212%, rose 18 basis points this week amid fears of disorderly moves around the October 30 Budget, where Chancellor of the Exchequer Rachel Reeves has hinted she may relax debt rules to increase loans.

VOLATILITY

Indices that track predictions of market volatility rose this week, with the VIX gauge of expected changes in the S&P 500 rising to 19 from about 15 a month ago.

The MOVE index of bond market volatility is nearing its highest point in years, and euro volatility hit an 18-month high on Thursday.

Gold fell 0.3 percent to $2,727 an ounce on Friday after hitting a record high on Wednesday as haven buying picked up.

The euro was steady at $1.0823, down sharply from around $1.12 a month ago. The pound, at $1.297, is down nearly 3% this month.

Ahead of the November 1 monthly payrolls report, which Fed watchers scrutinize for monthly policy cues, overnight data showed an unexpected drop in weekly US jobless claims.

The Fed cut borrowing costs by 50bps in September in its first such move since 2020, but money markets pared earlier bets on another jumbo move next month, with most traders anticipating a quarter-point cut instead.

The 10-year U.S. Treasury yield, which moves inversely to the price of the debt instrument and sets the tone for global debt costs, was at 4.1801 percent on Friday after hitting a three-month peak of 4.26 on Wednesday %.

The dollar index, which measures the currency against major peers, was little changed at 104.03 after hitting a three-month high on Wednesday.

EYES ON JAPAN

Polls suggest Japan’s ruling Liberal Democratic Party, which wants the BoJ to raise ultra-low interest rates, could lose its majority and have to enter a coalition with opposition parties that support continued monetary stimulus.

Japan’s Nikkei fell 0.7 percent on Friday and the yen was steady at 151.87 per dollar after Japanese officials warned speculators against betting against the currency, which fell sharply from around 141 in mid- of September.

Elsewhere in Asia, Hong Kong’s Hang Seng rose 0.5 percent and shares in mainland China rose 0.7 percent.

Brent crude futures rose 0.3 percent to $74.66 a barrel.