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

The cheer from Wall Street darling Nvidia's strong results didn't last long as fears that interest rates would stay higher for longer once again dampened the AI rally.

Retail sales for April in Britain and detailed GDP data for Germany headline European economic calendar, keeping investors risk averse, weighing on stocks and taking the dollar higher.

Futures indicate a weak open in Europe with the STOXX 600 index poised for a near 1% weekly decline, its biggest such drop since mid April. The blue-chip UK stock index will also be in focus after the surprise call for a general election by Prime Minister Rishi Sunak.

The Bank of England also has to contend with UK inflation that slowed less than expected in April. Markets are now pricing in 30 basis points of cuts this year, with expectations BOE is most likely to start cutting rates at its September meeting though markets are not ruling out August, both after the election.

Meanwhile, traders are pricing in 58 basis points of cuts in 2024 from the European Central Bank, compared with 67 at the start of the week in the wake of key wage data.

The ECB has long pinned rate cut hopes on this crucial wage figure but has essentially committed to policy easing on June 6, so the fresh number is more likely to influence policy decisions later in the year.

As for the Federal Reserve, markets now fully expect a rate cut only in December and are pricing in 36 basis points of easing after robust economic data. It was not long ago (in January) that markets had priced in as much as 150 basis points of easing this year.

In corporate news, the focus will be on Hargreaves Lansdown after Reuters reported the UK retail investment platform's biggest shareholder, Peter Hargreaves, was open to taking the company private.

Key developments that could influence markets on Friday:

Economic events: Germany Q1 GDP, UK April retail sales, Sweden April PPI