A look at the day ahead in European and global markets |
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By Rae Wee, Correspondent |
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Earnings results from Nvidia will be the marquee event for markets on Wednesday, with all eyes on how much U.S. technology curbs on China will cost the AI bellwether. Company watchers expect the chip giant to report a 66.2% surge in first-quarter revenue to $43.28 billion, however uncertainty surrounding its China business looms large even as a pullback in other regulations is set to open up new markets. As it is, traders in the options markets are bracing for industry-wide volatility after the results, with defensive options contracts on a major semiconductor ETF drawing heavy attention. |
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Nvidia's CEO, Jensen Huang, looks on as he answers questions from members of the media at a press event in Taipei, Taiwan, May 21, 2025. REUTERS/Ann Wang |
Earnings aside, investors will also be watching developments in global bond markets after demand on Wednesday for Japan's 40-year government bond auction was its lowest since November, underscoring the market's diminishing capacity to absorb new debt. Long-end yields have surged worldwide in recent weeks on a heavy selloff in bonds as concern mounts over fiscal deficits, particularly in developed nations such as the U.S. and Japan. Worries over tax cuts and that the United States' chaotic tariff policy will stoke inflation and propel government spending have made investors increasingly nervous about holding long-dated sovereign debt. |
Graphics are produced by Reuters. |
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On Tuesday, Reuters' exclusive report that Japan is considering trimming the issuance of super-long bonds was followed by a drop in both yields and the yen. Yields on Japanese government bonds were little changed following Wednesday's auction. U.S. Treasury yields edged up slightly after falling the previous day. Over in New Zealand, the central bank cut its benchmark interest rate by 25 basis points and flagged a slightly deeper easing cycle than it forecast three months ago, underlining risk to economic growth from a sharp shift in U.S. trade policy. |
Graphics are produced by Reuters. |
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Key developments that could influence markets on Wednesday: |
- North America earnings: Nvidia, Bank of Montreal, National Bank of Canada, DICK'S Sporting Goods, Macy's
- U.S. auction of two-year floating rate, five-year notes
- German auction of 15-year Federal bonds
- German unemployment data for May
- France Q1 GDP final reading, producer prices for April
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. |
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