Stocks rallied to a three-month high in the past week, helped by more assertive language from the Fed Wednesday. But the market rose sharply Friday after the July employment report showed a surprise gain of 163,000 jobs to nonfarm payrolls, breaking a string of disappointments. Stocks and the euro were also lifted by optimism that ECB President Mario Draghi’s promises for ECB action would take shape in the next several weeks. The Dow, up for a fourth week, gained 217 points Friday, but was up just 0.2 percent for the week to 13,096. The S&P ended the week up 0.4 percent at 1390, and the Nasdaq was up 0.3 percent at 2967.

“There’s not a lot of things for the markets to be afraid of. This week was full of event risk,” said John Briggs, senior Treasury strategist at RBS. “We are through that, and the markets are coming out with some confidence when it comes to risk assets. With the markets not having a lot to be afraid of, and no blatant ‘risk off’ events on the calendar, we’re looking at auction supply.” The Treasury auctions $72 billion in 3- and 10-year notes, and 30-year bonds Tuesday through Thursday.

“The path of least resistance is higher yields,” Briggs said. “I think we could get the 10-year (yield) up to 1.70 through the auctions.” The 10-year yield was at 1.575 percent Friday.

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