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(Bloomberg) -- Global stocks posted modest gains as traders prepared for a week packed with US data that will shed light on the health of the world’s largest economy and the outlook for Federal Reserve interest rates.

Most European equity sectors traded in the green as the Stoxx 600 index eked out a fifth day of advances. A gauge of Asian stocks was off its highs for the session, while US futures were steady. BT Group Plc rallied more than 7% in London after Bharti Global agreed to buy a stake of about 24.5% in the UK carrier.

There was some relief from the volatility that ripped through markets last week, fueled by concerns the Fed is waiting too long to cut interest rates. The Cboe Volatility Index — Wall Street’s fear gauge — has retreated from its highest levels since the early days of the Covid-19 pandemic.

“The skies are not fully clear yet, but there are several reasons that suggest to us that some relatively calmer seas are ahead of us,” analysts at Nomura Holdings Inc. said in a note, citing a lessening of fears about a US recession and lower chances of a very hawkish Bank of Japan as among the grounds for optimism.

There’s no certainty the relative calm will continue, with Wednesday’s US inflation data the key volatility event for the week. According to Citigroup Inc., traders are positioning for the S&P 500 to move 1.2% in either direction when the consumer price index report is released.

Meanwhile, while bond markets have moved to price in a Fed that is “behind the curve,” the risk isn’t “priced into current equity multiples,” according to Morgan Stanley strategists. The team led by Michael Wilson says economic growth is the primary concern for investors, rather than inflation and rates.

“Markets are looking for better growth or more policy support to get excited again,” the team wrote in a note. “We don’t see confirming evidence in either direction near term, leaving the index to trade in a tight range for now.”

In currencies, the yen dropped the most against the dollar among major peers Monday. The yen surged last week as traders slashed bearish bets following the BOJ’s rate hike, forcing a negative feedback loop as investors dumped carry trades that ricocheted across global markets. Treasury yields ticked higher.

The US consumer price index is expected to have risen 0.2% from June for both the headline figure and the so-called core gauge that excludes food and energy. The modest moves, however, may not be enough to derail the Fed from a widely anticipated interest-rate cut next month.

At the weekend, Fed Governor Michelle Bowman said she still sees upside risks for inflation and continued strength in the labor market, signaling she may not be ready to support an interest-rate decrease when US central bankers next meet in September. Money markets have fully priced a rate cut in September and about 100 basis points of easing for the year, according to swaps data compiled by Bloomberg.

In commodities, oil rose Monday, extending a 4.5% gain last week. Some top US oil refiners are throttling back operations at their facilities this quarter, adding to concerns that a global glut of crude is forming. Gold edged higher.

Some key events this week:

Some of the main moves in markets:

Stocks

Currencies

Cryptocurrencies

Bonds

Commodities

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Sagarika Jaisinghani and Catherine Bosley.