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

Gregor Stuart Hunter

Did you really think that the mighty U.S. stock market was going

to be stopped in its tracks by a measly PPI print, even if it

was a blowout?

Despite the jump in wholesale prices, S&P 500 futures

clung to a gain of 0.2% in Asian trading, even as Nasdaq futures

slipped for a third consecutive day. The yield on the

U.S. 10-year Treasury bond was down 2 basis points

at 4.2732%.

One consequence of the hot PPI print is that the market has

given up on hopes of a jumbo 50 basis point rate cut from the

Federal Reserve, according to the CME Group's FedWatch tool. But

traders are still pricing in a 92.1% probability of a 25 basis

point rate cut at its September meeting, compared with a 100%

likelihood of a cut yesterday.

In Asia, data from the region's two biggest economies showed

Japan's economy running hot last quarter to keep shelves stocked

ahead of Donald Trump's tariff deadline, while China indicated

renewed signs of slack.

Hong Kong stocks fell 1.2% after the release of

weaker-than-expected Chinese economic data for July including

retail sales and industrial production, while the large-cap CSI

300 gained 0.5% as traders speculated that the data

may justify extra stimulus. Markets in India and South Korea are

closed for public holidays.

The Nikkei 225 rebounded 1.2% after snapping a

six-day winning streak on Thursday with its biggest one-day

selloff since April 11, as Japanese GDP data showed the economy

expanding by an annualised 1.0% in the April-June quarter,

beating analyst estimates and providing more signals to the Bank

of Japan, which next meets on September 19. The dollar weakened

0.3% against the yen to 147.64.

In commodities markets, Brent crude was down 0.1% at

$66.79 per barrel, not far from a two-month low reached on

Wednesday, ahead of a meeting in Alaska between U.S. President

Donald Trump and Russian leader Vladimir Putin on Friday.

"The first meeting doesn't seem like a major market-moving

event - it's more to set up a second meeting, which will likely

be more important," said Marc Velan, head of investments at

Lucerne Asset Management in Singapore. "If a ceasefire is

reached, expect a positive reaction in the euro and a weaker

dollar; the opposite if a ceasefire fails."

Key developments that could influence markets on Friday:

EU data: Euro zone reserve assets for July

UK debt auctions: Reopening of 1-month, 3-month and 6-month

government debt auctions

(By Gregor Stuart Hunter; Editing by Muralikumar Anantharaman)