Market Calm Before the Storm: Key Economic Events Await

As yields ease, European and global markets recover slightly, but major risk events loom: significant U.S. earnings reports, a key payrolls announcement, and a critical presidential election. The dollar and yields gain momentum while stocks see mixed outcomes amid geopolitical and economic uncertainties.

In a tentative respite for global markets, yields have eased, bringing some relief to equities and enabling the euro and yen to stabilize against the dollar. However, this moment of calm may be misleading, as several critical economic events are set to unfold next week.

Among these are mega-cap earnings releases from key players like Alphabet, Amazon, Apple, Meta, and Microsoft, alongside a crucial U.S. payrolls report and the intensifying U.S. presidential election. The potential for a second Trump presidency, characterized by increased tariffs and taxes, has buoyed the dollar and lifted Treasury yields.

While U.S. stock markets saw limited gains driven by optimism over Tesla's earnings, they ended the session without a full recovery. In Asia, Japan's Nikkei fell amid electoral uncertainties, while Europe's markets pointed toward a tentative decline with attention on Germany's Ifo surveys and earnings reports from several major companies.

(With inputs from agencies.)