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

Stella Qiu

It is a sea of red in Asia as AI darling Nvidia ( NVDA ) failed to

meet expectations of investors who were not satisfied with its

profits, revenue and outlook simply beating the Street.

Nvidia ( NVDA ) shares have rallied more than 150% this year thanks

to insatiable demand for generative artificial intelligence

(AI), so the 7% drop in its shares after-hours could turn out to

be just another dip to buy into the world's second-most valuable

company.

However, with valuations sky high, it is probably time for

some caution. Taiwan-listed shares of chipmaker TSMC

slid 2%, Nasdaq futures dropped 0.7%, and Europe is set

for a lower open, with EUROSTOXX 50 futures off 0.2%.

Next up, Germany and Spain will publish their

preliminary inflation readings for August later in the day. And

a few European Central Bank officials will be taking part in

some panel discussions.

Headline inflation is expected to slow to 2.3% for Germany

and 2.5% for Spain. Any downward surprises there will feed into

the eurozone inflation reading due on Friday and add to the case

of consecutive policy easings from the ECB for the rest of the

year.

Swaps imply a cut in September is a done deal, but they are

less sure about the chance of a move in October and December,

pricing in just about 60 basis points of easing by the year end.

The often volatile U.S. jobless claims report, due later in

the day, has also gained prominence after Federal Reserve Chair

Jerome Powell declared policymakers do not wish to see further

weakening in the labour market.

Elsewhere, currency markets were mostly steady in the

Asia session. The kiwi dollar rose 0.6% to a fresh 2024

high of $0.6281 after a local survey showed a huge turnaround in

business activity fuelled by a rate cut from the Reserve Bank of

New Zealand.

U.S. Treasury yields were also quiet, although the inverted

curve between two- and 10-years came within a whisker of turning

positive. That would be the first time since July 2022, barring

the brief un-inverting during the Japanese market crash earlier

this month.

Two-year yields held at 3.8671%, just 3 basis points higher

than 10-year yields.

Key developments that could influence markets on Thursday:

- Spain, Germany preliminary CPI for August

- U.S. weekly jobless claims

- Panel participation from ECB chief economist Philip R.

Lane

- ECB deputy governors Aino Bunge and Olli Rehn take part in

panel discussions

- Final U.S. Q2 GDP reading

(Editing by Muralikumar Anantharaman)