July 1 (Reuters) - A look at the day ahead in European and

global markets from Wayne Cole.

It's been a hesitant start to the new quarter in Asia, partly as

the market digests the meaty gains made last quarter and partly

as the U.S.-Iran talks are busy going nowhere.

It seems President Donald Trump's son-in-law Jared Kushner and

envoy Steve Witkoff arrived in Doha for top-level meetings, only

to be stood up by Tehran. One very sticky, sticking point is the

Strait of Hormuz and whether Iran gets to charge for passage,

and it's far from clear how that can be resolved.

Asian stock markets are a bit mixed, though that follows a

quarter when the Nikkei rose 37%, the Kospi 68% and the Taiex

45%. Those gains rely on a lot going right in the AI trade, but

the flow of economic data is offering fundamental support.

Sentiment among Japan's big manufacturers has hit heights not

seen since 2018, while manufacturing activity boasted its best

quarter since 2014 as new orders surged.

Trade numbers from South Korea were truly astounding with the

fastest export growth in nearly 50 years in June as shipments of

semiconductors surged almost 200%. As a result, South Korea

became the fourth country in the world to reach a monthly export

value of $100 billion, after Germany, China and the U.S.

Wall Street stock futures are mildly in the red after a

solid session overnight led by the usual tech suspects. The same

companies are expected to deliver an earnings bonanza this

season which starts from the week of July 13.

Analysts at Goldman Sachs note the consensus is for

earnings per share to grow 22% on a year earlier. AI

infrastructure stocks are expected to contribute nearly 60% of

S&P 500 EPS growth, with Micron and Nvidia ( NVDA )

together accounting for more than 40%.

The heady earnings will be needed to offset the

attractiveness of higher bond yields and the risk of a rise in

the cash rate. Yields on 10-year Treasuries jumped

almost 9 basis points on Tuesday, in a late selloff that had no

obvious catalyst.

It could be investors bracing for a surprise in payrolls numbers

tomorrow on the upside and further narrow the odds on a Federal

Reserve hike. A move this month is still one-in-three, while the

chance for September ranges from 67% to 88% depending on how you

calculate Fed fund futures. Fed Chair Warsh is speaking in

Sintra today and we'll see if he sticks to his "no forward

guidance" mantra.

Oh, and there's been a fresh 40-year top for dollar/yen at

162.82, with no sign yet of Japanese intervention. It's notable

the yen hasn't been falling on the crosses, so maybe Tokyo is

prepared to wait it out. Note, there are no major chart levels

now until the dollar reaches Plaza Accord levels around 240.00

yen. That's a big gap to fill.

Key developments that could influence markets on Wednesday:

- Fed Chair Kevin Warsh, European Central Bank President

Christine Lagarde, Bank of England Governor Andrew Bailey and

Bank of Canada Governor Tiff Macklem speak at the ECB Forum on

Central Banking in Sintra, Portugal

- EU CPI for June, EU and US manufacturing PMIs for June

- US ISM manufacturing survey and auto sales for June

(Editing by Muralikumar Anantharaman)