Korean bond market has been volatile dancing to the tunes of varied hopes on interest rate changes. South Korea's sovereign bonds shed early gains as forecasts that Bank of Korea (BoK) may not reduce the interest rate from the record low of 1.5 percent.

Taking cues from the overnight gains on Wall Street, Asian markets moved upwards marginally on Thursday. The reopening of trading in Chinese markets after a long-week holiday streak also infused fresh interest into the market.

Bill Gross, a bond manager, forecasts further fall of 10 percent in many asset classes, while advising investors that cash is the best bet until a clear picture about the next direction of the market emerges.

Giving much wider scope of speculation on possible interest rate hike in next October meeting, the US Federal Reserve Chair Janet Yellen has indicated that there would be interest rate hike this year. Yellen further opined that it's necessary to increase short-term rates in a gradual manner as the improvement in labor market further continues and inflation rate reaches to the government target of two percent. The US Central Bank has been sending feelers about the possible rate hike this year for some time. The job market growth is the major factor that puts the US Fed in a comfortable position to take a decision on interest rate hike.

Oil prices dropped further on Friday trading following the alert from the US Central Bank that global economy is weakening. Adding to this, indications that Organization of Oil Exporting Countries (OPEC) would keep up oil production, in order to maintain its market share, also further dampened the market confidence. Equities on the US and European stock markets opened lower. The fundamentals seem to have turned bearish, fell the analysts. Oil price is expected to be $80 per barrel by 2020.

The market analysts, economists say that current situation is favoring the US Fed to take a decision on interest rate hike. The improvement in the labor market in low-income jobs is giving much-needed support to the US Fed.

After the market downfall from the previous weeks, IMF and ECB gave a warning on the effects of China's deceleration. Both European Central Bank and International Monetary Fund admonished the risks of economic growth from China's slowdown and other establishing markets.

The latest projects indicating job gains in August are giving a much wider scope for US Fed rate hike speculation. According to research firms, non-farm payrolls were up 220,000 in August from 215,000 in July. Unemployment rate is also at 5.2 percent indicating near seven-and-a-half-year low.

The London property market that's been a favorite global hotspot for years, is fast losing its sheen as British pound becomes stronger, while emerging economies currencies are turning out to be weaker.

The Chinese stock market is registering a volatile trading pattern as investors became nervous about the future course of the market. The slowdown in the dragon country's economy growth has become a cause of concern for the investors.