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

Wee

An ugly selloff in technology stocks swept across Asia on

Monday as investors slammed the brakes on the red-hot AI rally,

with a more than 8% fall in South Korea's KOSPI triggering

circuit breakers.

The moves followed that of last week's shakeout on Wall

Street, after a blowout U.S. jobs report ramped up expectations

for Federal Reserve interest rate hikes - a bane for growth

stocks.

Markets are now pricing in a more than 70% chance that the

Fed will raise rates in December, up from a 45% chance a week

ago, according to the CME FedWatch tool.

Friday's nonfarm payrolls report came just days after

Broadcom's ( AVGO ) underwhelming results last week, which sent

its stock slumping and dragged share prices of other technology

companies lower.

But that's the price to pay for perfection - when

expectations run so high, even a small miss can deliver a huge

blow.

Analysts and investors have, for the most part, dismissed

the latest selloff as a "healthy correction", with concentration

risks and leveraged positions amplifying the market moves,

though it remains to be seen how long the rout will last.

Elsewhere in markets, the dollar was at a two-month

high, helped by the Fed hike bets and resilience in the U.S.

economy.

The resurgent dollar pushed the yen deeper into

intervention territory, leaving investors on alert for further

yen-buying action from Tokyo to stem the currency's slide.

Revised gross domestic product data on Monday showed Japan's

economy lost momentum in the January-March quarter from the

previous three months on sluggish capital expenditure.

The data calendar for Monday is light, though the week ahead

is headlined by the giant SpaceX listing and U.S. inflation

data, alongside a European Central Bank policy meeting.

And the war in the Middle East rages on, with Israel saying

it struck military targets in western and central Iran on

Monday, even after U.S. President Donald Trump reportedly told

Israeli Prime Minister Benjamin Netanyahu to refrain from

further attacks.

Key developments that could influence markets on Monday:

- Boeing ( BA ) to release May numbers for deliveries and

orders

- Global airline CEOs gathering for an event in Rio de

Janeiro

- France: Reopening of 3-month, 4-month, 6-month and

11-month government debt auctions

- Germany: Reopening of 5-month and 11-month government debt

auctions

(Editing by Sonali Paul)