Turbulent week ends on a high By Reuters

A look at the day ahead in European and global markets from Stella Qiu.

No one could have guessed how this tumultuous week in the markets would end, but remarkably it only took a weekly US jobless claims report to undo most of the damage after fears of a recession in The US has panicked investors.

Asian stock markets rallied across the board on Friday, tracking a strong rally on Wall Street. gained 1.6% and erased most of Monday’s 13% loss for a likely weekly decline of just 1.5%.

As it stands, the yen is set to fall about 0.5 percent against the dollar this week, after hitting a seven-month high on Monday that caused the disintegration of yen trading, a driving force in the market’s recent move global.

However, carry trading is far from dead, with JPMorgan estimating that this popular trade has reached around $4 trillion.

Even the much-dreaded China slowdown story is turning back a bit. Consumer inflation data on Friday showed prices rose more than expected in July, after Wednesday’s trade data showed a surprise recovery in import growth. This suggests there is less risk of the world’s second-largest economy sliding into outright deflation.

All of this should lead to a stronger open for Europe, with no major economic data releases, earnings announcements or Fed speakers on the agenda for Friday. Both EUROSTOXX 50 futures and added 0.3%. A decent day would help reverse his weekly losses and build on his gains.

With money less of a headache, investors can likely turn one eye to the final days of the world’s biggest sporting event as the Paris Olympics head to their conclusion on Sunday.

Host nation France is now fourth in gold medals behind the USA, China and Australia. And he has a good chance of winning in men’s basketball, volleyball and boxing.

Key developments that could influence markets on Friday:

— CFTC commitment of position data traders, which will indicate how many yen shorts have exited the market

— Germany’s final CPI data

— France ILO Unemployment Rate for Q2

(By Stella Qiu; Editing by Edmund Klamann)