Global Market Watch: Focus on Central Bank Decisions and Economic Indicators

All eyes are on the Bank of England today following a historic rate hike by the Bank of Japan and a potential rate reduction by the U.S. Federal Reserve in September. Economists anticipate a rate cut by Britain's central bank amidst various economic data releases in Europe and notable earnings from tech giants like Apple and Amazon.

All eyes are on the Bank of England today, coming off the heels of a historic rate hike by the Bank of Japan and clear signals from the U.S. Federal Reserve about a potential rate cut in September.

Economists widely expect Britain's central bank to trim rates from their 16-year peak. The markets predict a cautious 58% chance of this happening, with uncertainty lingering due to policymakers' silence for over two months ahead of Britain's July 4 election. This has slightly weighed on European assets, even as Asian shares have mostly rallied, mirroring a tech-led rebound on Wall Street.

European markets are set for a calm start, with FTSE futures up 0.3% and EUROSTOXX 50 futures unchanged. Manufacturing surveys from the UK, Germany, and France and eurozone unemployment data are also on the agenda for today. Weakness in these indicators could strengthen the case for another rate cut in Europe.

In Asia, the yen soared to its highest in 4-1/2 months before hitting resistance, keeping its upward trend intact on the expectation of more central bank rate hikes. This sent Japan's Nikkei down 2.6%. Chinese markets also dipped after a private survey revealed a contraction in July's manufacturing sector, raising questions about the nation's growth trajectory.

Meanwhile, the tech sector remains in the spotlight as extraordinary comebacks led by Nvidia and Meta drive optimism. Nvidia surged by 13%, while Meta's earnings surpassed expectations, pushing its stock up 7%. Anticipation builds for earnings results from Apple and Amazon later today.

Investors are banking on a rate cut from the Fed in September to support risk sentiment, whether it be 25 basis points or even 50. Key developments to watch on Thursday include the Bank of England's rate decision, manufacturing PMIs from France, Germany, and the UK, the eurozone's unemployment rate for June, and earnings reports from Apple and Amazon.

(With inputs from agencies.)