Global stocks have edged up at the start of a week packed with earnings and a trio of central bank meetings that could see the US and UK open the door to interest rate cuts, while Japan might lift borrowing costs in a step toward "normality".
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Also due this week are the US jobs report for July, closely watched surveys on US and global manufacturing, and eurozone gross domestic product and inflation data.
"US markets are approaching crunch time. This coming week could very well set the path for markets over the near term," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
The US Treasury will outline its bond sale plans for the quarter, while China's politburo meeting could produce more stimulus following surprise rate cuts last week.
After a benign June inflation report, markets are wagering the Federal Reserve will lay the groundwork for a September rate cut at its policy meeting on Wednesday.
Futures are fully priced for a quarter-point easing and even imply a 12 per cent chance of 50 basis points, and have 68 basis points of easing priced in by December.
"The FOMC (Federal Open Market Committee) is set to hold steady but is likely to revise its statement to hint that a cut at the following meeting in September has become more likely," wrote analysts at Goldman Sachs in a note.
"We now see the risks to the Fed path as tilted slightly to the downside of our baseline of quarterly rate cuts, though not quite as much as market pricing implies."
The Bank of Japan also meets on Wednesday and markets imply a 70 per cent chance it will hike rates by 10 basis points to 0.2 per cent, with some chance it could move by 15 basis points.
Investors are less sure whether the Bank of England will ease at its meeting on Thursday, with futures showing a 51 per cent probability of a cut to 5 per cent.
The MSCI All-World index was up 0.2 per cent on Monday, with stocks in Europe 0.4 per cent higher, boosted by gains across the pharma and tech sectors.
The consumer products sector offset some of that uplift, as shares in Enfamil formula maker Reckitt Benckiser hit their lowest since early 2013 following a US court ruling against rival Abbott in a case on infant formula.
Around 40 per cent of the S&P 500 by market worth will report this week, including tech darlings Microsoft, Apple, Amazon and Facebook-parent Meta.
Expectations are high so any hint of disappointment will test the mega-caps' sky-high valuations.
"With some sizeable moves implied by the options market for the individual names on the day of reporting, movement at a stock level could resonate across other plays within their sector and potentially promote volatility," said Chris Weston, head of research at broker Pepperstone.
"Company earnings don't come much bigger than Microsoft, where the options market implies a move (higher or lower) of 4.7 per cent - the after-market session on Tuesday could get lively."
Futures on the S&P 500 and Nasdaq 100 were up 0.4-0.6 per cent.
In currency markets, the Japanese yen held on to its recent gains, leaving the dollar flat at 153.845, still clear of last week's low of 151.93.
The euro eased 0.3 per cent to $1.0817, while the pound also fell 0.3 per cent to $1.2825.
In commodity markets, gold inched up 0.1 per cent to $2,387 an ounce, supported by the prospect of a dovish Fed.
Oil prices fell in volatile trading, as investors remained cautious of a widening conflict in the Middle East following a rocket strike in the Israeli-occupied Golan Heights, which Israel and the US blamed on Lebanese armed group Hezbollah.
Brent was down 0.7 per cent at $80.57 a barrel, while US crude dropped 0.8 per cent to $76.55.
Australian Associated Press
