A look at the day ahead in European and global markets

By Tom Westbrook, Deputy Financial Markets Editor

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The indomitable U.S. consumer may finally have taken a beat, and Friday's figures showing the first fall in U.S. retail sales for nine months will put the spotlight on earnings ‌at Walmart and Home Depot this week, along with the AI spending boom.

The indomitable U.S. consumer may finally have taken a beat, and Friday's figures showing the first fall in U.S. retail sales for nine months will put the spotlight on earnings ‌at Walmart and Home Depot this week, along with the AI spending boom.

The Federal Reserve building is set against a blue sky in Washington, U.S., May 1, 2020. REUTERS/Kevin Lamarque/File Photo

The Aussie and kiwi notched ⁠two-month tops while sterling and the euro were not far from multi-month highs either.

In holiday-thinned trade, the won made no obvious reaction to U.S. President Donald Trump on Sunday ordering the Pentagon to "substantially reduce" military exercises with South Korea.

Alphabet (GOOGL.O), opens new tab has banks working on an inaugural Aussie dollar bond sale, a bookrunner message said on Monday, the latest sign of hyperscalers looking beyond the U.S. to fund their massive capital expenditures on computing.

The message didn't say how much Alphabet could raise in the deal or mention its plans for the proceeds.

Graphics are produced by Reuters

The yen rose a little as a significant shift ‌is ⁠unfolding in market thinking about Japan's interest rate outlook, and increasingly traders are betting on policymakers picking up the pace of rate hikes.

Bank of America analysts are a little more hawkish than market consensus but think that there will be four hikes between September and July next year, taking the policy rate to ⁠2%.

Markets shrugged off a miss in Japanese economic growth on Monday and drove up government bond yields. The benchmark 10-year sovereign has been sold for six straight sessions, for a yield standing at an almost 30-year high ⁠of 2.925%.

The yen flirted with the strong side of 159 per dollar.

Europe's data calendar is fairly bare on Monday, though China has rescheduled monthly activity data to drop during the London session. Later ⁠in the day Canadian inflation figures are due and later in the week there are European confidence indicators, flash PMIs and minutes from last month's Fed meeting.