INTERNATIONAL: World stocks were headed for a weekly loss on Friday as the prospect of aggressive global rate hikes finally began to rattle investors, while bonds languished and the dollar looked set to ride higher yields to its best week in a month.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was steady on Friday but facing a weekly loss of about 1.5%. Japan's Nikkei (.N225) wobbled a little higher but remained on course for a weekly loss of nearly 2.6%.

S&P 500 futures were flat while FTSE futures and EuroSTOXX 50 futures each rose about 0.8% as traders looked for markets in London and Europe to catch up with a modest Thursday bounce on Wall Street.

A late rally had lifted U.S. indexes a little, but they are also all down for the week led by a 2.5% loss for the yield-sensitive Nasdaq (.IXIC) as higher interest rates loom large.

Federal Reserve minutes this week have confirmed policymakers are ready to hike quickly to curb inflation.

A looming European embargo on Russian coal looks set to further exacerbate economic pain and price pressures, though it also carried Indonesian stocks (.JKSE) to a record high in Jakarta, where coal exporters expect better prices.

A tight French presidential race is adding to nerves amid a growing sense that financial markets are entering a new era.

Rabobank researchers reckon demand falling away leaves equity markets akin to Wile E. Coyote: "Running in the air for several moments before plummeting off a cliff edge."

Hike expectations in Canada, South Korea, Australia and New Zealand are also surging with inflation.

In France, a victory for far-right leader Marine Le Pen over incumbent Emmanuel Macron, while still unlikely, is now within the margins of error, opinion polls show and the euro edged down to a one-month low of $1.0855 in the Asia session.

In bond markets, long-end Treasuries have borne the brunt of this week's selling as traders see it hit hardest by the Fed cutting bond holdings.

The benchmark 10-year Treasury yield is up 26 basis points (bps) to 2.6528% this week, and was steady in Asia trade on Friday. The 30-year yield is up 23 bps.

The U.S. dollar has been the primary beneficiary and the dollar index , which measures the greenback against a basket of six major currencies is up seven days in a row and hit an almost two-year high of 99.914 on Friday.

The stronger dollar, and an oil price easing with supplies being released from reserves, has also pulled commodity currencies off recent peaks and redoubled pressure on the struggling yen. Japan's currency is near its lowest levels in years and was battling at 123.97 per dollar.

Brent crude futures were steady at $100.73 per barrel and U.S. crude futures held at $96.30.

There were also some brighter spots, with Australia's bank-and-miner heavy equity market (.AXJO) hanging in for a steady week.

"A higher rate environment that transpires through the hiking cycle will continue to benefit value vs. growth equities and provides a more constructive outlook for sectors like financials," said Clara Cheong, a Singapore-based strategist at J.P. Morgan Asset Management.