World stocks attempted a rebound on Friday with Asian and European markets gaining modestly after the previous day's selloff, while oil prices fell as producers bickered over the details of an output cut.
The pan-European STOXX 600 index was up 1.2 percent by 0857 GMT, after falling as much as 3.2 percent during Thursday's rout, which was triggered by the arrest of the chief financial officer of Chinese smartphone-maker Huawei in Canada.
The arrest, coming on the heels of a 90-day trade truce between the United States and China, triggered fears that the dispute could escalate further and dented hopes for a resolution.
The MSCI All-Country World Index, which tracks shares in 47 countries, was up 0.3 percent on the day, on track to end the week down 2 percent.
Chinese shares, which were up earlier in the day, slipped into negative territory with the blue chips off 0.1 percent. E-Mini futures for the S&P 500 also started firmer but were last down 0.4 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan nudged up 0.2 percent, though that followed a 1.8 percent drubbing on Thursday. Japan's Nikkei added 0.8 percent.
Markets also face a test from U.S. payrolls data later in the session amid speculation that the U.S. economy is heading for a tough patch after years of solid growth.
Federal Reserve Chair Jerome Powell emphasised the strength of the labour market in remarks made late Thursday.
Economists polled by Reuters forecast jobs rose by 200,000 in November after surging 250,000 in October. The data is due at 1330 GMT.
"After the G20 Summit, markets have focused on the most recent U.S. yield curve developments," analysts at Credit Suisse wrote, noting the inversion of the spread between 2-year and 5-year U.S. yields.
"Yet we believe that the risks of a downturn are very limited, considering how strong labormarkets are in most economies. We therefore think that risk assets should rebound and regard the yield curve developments essentially as a reflection of a more neutral Federal Reserve going forward."
The mood in risk-asset markets brightened a little after the Wall Street Journal reported Fed officials were considering whether to signal a new wait-and-see mentality after a likely rate increase at their meeting in December.
That only added to recent feverish speculation that the central bank was almost done hiking rates, given concerns about global growth and the disinflationary impact of collapsing oil prices.
Interest rate futures rallied hard in massive volumes with the market now pricing in less than one hike next year. A month ago they had been betting on three increases.
The news helped Wall Street pare steep losses and the Dow ended Thursday down 0.32 percent, while the S&P 500 lost 0.15 percent. The Nasdaq managed to advance 0.42 percent.
Treasuries extended their blistering rally, driving 10-year yields down to a three-month trough at 2.8260 percent, before last trading at 2.8827 percent.
Yields on two-year notes fell a huge 10 basis points at one stage on Thursday and were last at 2.75 percent.
Investors also steamrolled the yield curve to its flattest in over a decade, a trend that has historically presaged economic slowdowns and even recessions.
"The sort of flattening of the yield curve that we have seen recently usually indicates that investors think the Fed is nearing the end of a tightening cycle, and that rate cuts may even be on the horizon," argued analysts at Capital Economics.
The seismic shock spread far and wide. Yields on 10-year paper sank to the lowest in six months in Germany, almost 12 months in Canada and 16 months in Australia.
The sea change in expectations took a toll on the U.S. dollar as bulls had been counting heavily on a steady widening rate differential to propel the currency.
The greenback eased against a basket of currencies to 96.823 , and fell to 112.80 yen from a 113.85 high at the start of the week. The euro was flat at $1.13750.
The cryptocurrency Bitcoin took a fresh spill to be down almost 18 percent for the week at $3,362.89.
In commodity markets, gold firmed to near a five-month peak as the dollar eased and the threat of higher interest rates waned. Spot gold stood 0.1 percent higher at $1,239.49 per ounce.
Oil was less favoured, however, falling further as OPEC delayed a decision on output cuts while awaiting support from non-OPEC heavyweight Russia.
Brent futures fell 0.5 percent to $59.77 a barrel, while U.S. crude also lost half a percent to $51.19. (Reporting by Ritvik Carvalho; additional reporting by Wayne Cole in Sydney)