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

Ankur Banerjee

You know markets are fully risk-on when cryptocurrencies are

on a tear, with bitcoin joining global stocks to scale a record

peak as the near certainty of U.S. interest rate cuts bolsters

risk sentiment and weighs on the dollar.

The world's best-known cryptocurrency, bitcoin, has a

lot going for it: prospects of lower interest rates, a more

favourable regulatory environment, and bullish inflows from

institutional investors.

Ether too has been on the charge, hovering near its

highest since November 2021, becoming the token of choice for

those looking for more active returns. In fact, ether is up 42%

this year, outstripping the 32% gain for bitcoin.

Stocks in Asia were taking a bit of a breather after a

blistering rally this week. Japanese shares fell after hitting a

record high, while tech-heavy Taiwan and South Korean shares

eased after recent highs.

Investors are wagering that the Federal Reserve will resume

cutting interest rates from next month, with traders starting to

even price in odds of a 50 basis points cut after comments from

Treasury Secretary Scott Bessent.

"If we'd seen those numbers in May, in June, I suspect we

could have had rate cuts in June and July. So that tells me that

there's a very good chance of a 50 basis-point rate cut," in

September, Bessent said in an interview on Bloomberg Television.

Fed Chair Jerome Powell, who has been regularly lambasted by

U.S. President Donald Trump, is expected to speak at a central

bank research conference in Wyoming next week and the focus will

be on his tone on policy path.

Bessent also said the Bank of Japan will likely be raising

interest rates as it is behind the curve in dealing with the

risk of inflation, leading to strong gains in the yen,

which stayed around its strongest level in three weeks.

Investor focus during European hours will be on a swathe of

economic data that will offer a glimpse of the tariff

uncertainties and the impact of the duties on the economy.

Key developments that could influence markets on Thursday:

Economic events: Euro zone flash GDP for Q2, UK prelim GDP

for Q2

(By Ankur Banerjee; Editing by Muralikumar Anantharaman)