Oil prices slipped, after surging over 2% overnight to seven-week peaks as a surprise drop in U.S. crude inventories added to supply worries amid export issues in Iraq, Venezuela and Russia.

European stocks are set for a subdued open, with EUROSTOXX 50 futures off 0.1%. S&P 500 futures and Nasdaq futures were flat ahead of a lineup of Federal Reserve officials, whose remarks will be closely watched for their views on interest rates.

San Francisco Fed President Mary Daly said further rate cuts will likely be needed but the timing remained unclear. Earlier in the week, Fed Chair Jerome Powell had struck a cautious tone about further rate cuts, after the central bank delivered the first easing this year just last week.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS),slipped 0.1%, having rallied over 5% for the month and 9% for the quarter. Japan’s Nikkei (.N225), rose 0.2%, after jumping 7% for the month and 13% for the quarter.

“It must be said that fresh catalysts were lacking across the board, with little by way of impactful news or data-flow to move the needle especially much,” said Michael Brown, a senior research strategist at Pepperstone.

“Long equities also continues to make a lot of sense… The Fed’s ‘run it hot’ approach tilts risks to the outlook to the upside, and marks a restoration of the ‘Fed put’ dynamic with which participants have become so familiar over the years.”

Chinese shares outperformed, with blue chips (.CSI300), 0.7% higher and Hong Kong’s Hang Seng (.HSI), advanced 0.2%. Chinese tech shares (.HSTECH), are up for the eighth straight week, the longest winning streak on record on AI optimism.

Overnight, Wall Street closed lower for a second straight session as investors booked profits from record-high stocks. Futures still imply a 92% chance for a rate cut from the Fed in October, but the total expected easing has faded to 100 bps, from 125 bps a few weeks ago.

Next up, the spotlight will be on U.S. economic data, including the Fed’s preferred gauge of inflation, the Personal Consumption Expenditures report on Friday and the final estimate for second-quarter GDP on Thursday, while the prospect of a government shutdown looms large

The Treasuries market see-sawed as markets absorbed a huge amount of higher corporate and government bond supply. The benchmark U.S. 10-year Treasury note yield was flat at 4.1408%, having risen 3 basis points overnight, reversing Monday’s fall.

The Treasury Department will auction $44 billion in seven-year notes on Thursday, following auctions of five-year and two-year notes earlier in the week.

In foreign exchange markets, the dollar index held onto overnight gains at 97.82, having bounced 0.6% overnight. That left yen bulls in a spot of bother after some piled into long yen positions after the Bank of Japan’s hawkish hold on policy last week.

“A lot of guys, whether they’re macro or discretionary, have been on the wrong foot looking for dollar/yen to trade lower and that dollar/yen move would certainly be causing some concerns,” said Tony Sycamore, analyst at IG.

That spilled into yen crosses, with the Swiss franc hitting an all-time high on the yen and the euro hovering at over a one-year peak at 174.66 , just below a record top of 175.90.

The Swiss National Bank is expected to hold its policy rate at zero later in the day, its first pause since late 2023.

In commodity markets, spot gold prices were flat at $3,739 an ounce, having slipped 0.7% overnight in the face of a strong dollar.

U.S. crude slipped 0.4% to $64.73 a barrel, while Brent was off 0.3% at $69.11.