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

Ankur Banerjee

Another day of dollar selling, albeit not an intense one,

while Treasury yields remain elevated, keeping investors jittery

as they watch for possible developments on U.S. trade deals and

worry about the fiscal health of the U.S. economy.

The safe haven yen and Swiss franc were

again the main beneficiaries, as well as the euro,

hitting their strongest levels in two weeks even though U.S.

Treasury yields were on the rise in Asian hours.

Rising Treasury yields usually underpin the dollar,

especially against the yen, but that correlation has been

weakening over the past month as U.S. President Donald Trump's

erratic trade manoeuvres upended global markets and shook

investor confidence in U.S. assets.

The spotlight during European trading hours will be on

annual earnings from retailer Marks & Spencer ( MAKSF ), which was

hit by a costly cyberattack a month ago, and on British

inflation data for April.

The attack on 141-year-old M&S has likely already cost it

more than 60 million pounds ($81 million) in lost profit,

according to analysts. Wednesday's report will offer details on

the attack, which prompted the retailer to suspend online

ordering.

Investors will also scour the inflation report, which may

influence the Bank of England's monetary policy, to gauge cost

pressures following upbeat British GDP data last week.

The BoE cut the bank rate by 25 basis points on May 8 and

traders are betting it will deliver another 25 basis-point cut

at its next meeting in June.

Economists polled by Reuters estimated that Britain's

consumer price index rose 3.3% in April, compared with the

previous month's 2.6% rise, mainly due to an increase in

regulated tariffs for household utility bills.

A Reuters poll of economists forecast that Britain's economy

will grow a bit faster this year than had been expected a month

ago, partly due to unexpectedly strong growth in the first

quarter.

Long-dated Japanese government bonds found little relief on

Wednesday after a poor auction result sent yields to record

levels in the previous session.

The steep selloff in bonds is a quandary for the Bank of

Japan, which is trying to taper its debt purchases and normalise

monetary policy. Rising long-term borrowing costs are also a

warning sign for the highly indebted Japanese government.

Key developments that could influence markets on Wednesday:

Economic events: UK inflation data for April

Earnings: JD Sports, Marks & Spencer ( MAKSF )

Trying to keep up with the latest tariff news?

Our new daily news digest offers a rundown of the top

market-moving headlines impacting global trade. Sign up for

Tariff Watch here.

($1 = 0.7448 pounds)