Morning Bid: Markets stoic over Powell's shifting fate

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

The markets were in a calm but sombre mood on Thursday after a dramatic session on Wall Street driven by renewed uncertainty over the tenure of Federal Reserve Chair Jerome Powell.

U.S. President Donald Trump soothed investors' nerves a bit by stating he was not planning to fire Powell, but he confirmed he floated the idea with Republican lawmakers and kept his options open, saying he would love for the Fed Chair to resign.

Stocks in Asia were largely muted on Thursday while Wall Street futures fell, although European stock futures edged higher after slipping during the cash session on Wednesday.

The long-running Trump-Powell saga continues to undermine the dollar, which on Thursday was on fragile footing given lingering worries over the Fed's independence.

With calm mostly restored to the markets, investors have enough earnings reports and data releases on their plate to keep them distracted for now, barring any stepped-up attacks on Powell.

Top of mind are results from TSMC, the world's main producer of advanced AI chips, and streaming giant Netflix, both expected later in the day.

TSMC, a key supplier to Nvidia and Apple, is expected to post a 52% jump in second-quarter profit to record levels, although U.S. tariffs and a strong Taiwan dollar could weigh on its outlook.

As for Netflix, the bar is high for it to deliver a result that could impress investors. They are likely to focus on the company's expansion into live sports and the growth of its ad-supported tier.

Over in the UK, Thursday's jobs numbers could provide further clarity on the outlook for domestic interest rates.

Pay growth in Britain is expected to have slowed further in the three months to May with the unemployment rate likely to have stayed steady at 4.6%.

Still, Bank of England policymakers could turn more cautious on further rate cuts this year, after data on Wednesday showed Britain's annual rate of consumer price inflation unexpectedly rose to its highest in more than a year, at 3.6% in June.

The Australian dollar fell sharply in the Asian session after domestic employment rose only marginally in June, while the jobless rate jumped to its highest since late 2021.

Japan's exports fell for a second straight month as sweeping U.S. tariffs took a toll on the country's manufacturers, and Canadian retailer Alimentation Couche-Tard pulled its $47 billion bid to buy Seven & i Holdings, citing a lack of constructive engagement by the Japanese retailer.

Key developments that could influence markets on Thursday:

- TSMC, Netflix earnings

- British labour market data (May)

- U.S. weekly jobless claims

- Fed's Waller speaks

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(By Rae Wee; Editing by Edmund Klamann)