Growth fears fade as quickly as they appear By Reuters

A look at the day ahead in European and global markets from Rae Wee

Last week’s market turmoil quickly faded into a distant memory – at least for now – after a flurry of US economic data this week eased fears of a deep recession in the world’s largest economy.

Recession alarm bells have stopped ringing, and investors appear convinced that the Federal Reserve is no longer behind the curve on interest rate cuts.

Market prices are now pointing to just a 25% chance of a 50 basis point cut by the Fed next month, down from a 55% chance a week ago, according to CME’s FedWatch tool, after July’s inflation report from the US rejected the bets. of an extraordinary movement.

In Asia, it had a notable performance with its 3% gain on Friday, putting it on track for its best week since April 2020 as it tries to reclaim its record. What happened last week?

Meanwhile, the yen is down nearly 5 percent from last week’s seven-month peak and was last near the 149 level to the dollar.

Even as it starts to look cheap again, the currency’s volatility is causing global investors to rethink the viability of yen-financed deals.

Stock futures on Friday point to a firmer open in Europe and the US, with UK retail sales data just as London wakes up.

Shoppers are expected to have returned to the high street in July after a sharper than expected decline in June.

Bets remain that the Bank of England will ease rates at least once more this year as inflationary pressures ease and the outlook for the UK economy for the rest of 2024 turns less rosy.

And as most central banks globally look to cut interest rates, Down Under, the Reserve Bank of Australia (RBA) is slowly becoming an outlier.

RBA Governor Michele Bullock said on Friday it was premature to think about rate cuts, adding that core inflation was too high and the board remained focused on potential upside risks.

Her remarks came after her counterpart in the Antipodes, the Reserve Bank of New Zealand, earlier this week made its first interest rate cut in more than four years.

Key developments that could influence markets on Friday:

– UK Retail Sales (July)

– University of Michigan Preliminary US Consumer Sentiment Reading (August)

– Goolsbee from the Fed is speaking