Dollar recovers from Fed fright, Wall Street watching Netflix

*Dollar recovers after Fed chief firing rumours sparked selloff

*European shares rise after four-day drop

*U.S. retail sales solid, Netflix due later

A healthy crop of earnings helped European stocks bust out of a four-day losing streak on Thursday, Wall Street was watching Netflix and the dollar bounced after U.S. President Donald Trump quashed talk he was about to fire Fed head Jerome Powell.

Traders had also just got sight of a strong batch of U.S. retail sales and jobless claims numbers which gave more insight on how tariffs are impacting the economy and gave a little bit more impetus to the greenback and S&P 500 futures.

Europe's STOXX 600 was already having a good day after record orders at Swiss engineering firm ABB and record $13.5 billion profits at Taiwanese chip giant TSMC had added to rising optimism about a possible EU-US trade deal.

GE Aerospace lifted its profit outlook too ahead of the U.S. opening bell although it was the currency market moves that remained the broader focus.

The forecast-topping U.S. retail sales numbers lifted the dollar below $1.16 against the euro, leaving it almost back where it had been before what Societe Generale's Kit Juckes described as the "madness" triggered on Wednesday by reports Trump was readying to oust the Fed chief.

Japan's yen gave the greenback further help as polls showing Prime Minister Shigeru Ishiba's coalition was in danger of losing its majority in the upper house in upcoming elections pushed it towards its lowest since April at 148.73 to the dollar.

Data had also shown the Asian nation's exports were starting to feel the impact of tariffs with shipments down for a second straight month, while Australia's dollar had taken a 1% overnight tumble after weak employment numbers there.

"The market has got itself solidly short on the dollar and we are going into high summer so people are starting to buy it back a bit," Juckes said.

WATCHING NETFLIX

Earnings were also due later from streaming giant Netflix .

It has outperformed the S&P 500 year-to-date by a sizeable 33 percentage points and with analysts still bullish, it "will need to blow the lights out with a solid beat and raise," Chris Weston, head of research at broker Pepperstone said.

Wall Street futures were pointing to modestly higher start later with the Nasdaq set to add to its recent run of record highs.

U.S.-listed shares of TSMC gained 4% following its bumper results. Advanced Micro Devices rose 1.2%, while $4 trillion-valued Nvidia gained 0.7% in premarket moves.

European stocks were up a comfortable 0.7% after their four-day run of fall and Japan's Nikkei and bluechip markets in Taiwan and China had all notched 0.3%-0.6% rises overnight.

Ending what would have been the biggest foreign takeover of a Japanese company, Canadian retailer Alimentation Couche-Tard withdrew its $47 billion takeover bid for Seven & i Holdings, citing a lack of constructive engagement by the operator of 7-Eleven convenience stores.

Shares of Seven & i Holdings slid to a three-month low and ended down over 9%.

Trump's quick denial of the Powell speculation had helped restore some calm to volatile markets, but he kept the door open to the possibility of ousting him and renewed his criticism of the central bank chief for not cutting U.S. interest rates.

"After yesterday’s scare, markets have probably built even more resistance to headlines on this topic," ING analyst Francesco Pesole said. But, "in that hour, we saw the reaction we would have expected: a steepening in the U.S. yield curve, and the dollar sharply lower."

The benchmark 10-year Treasury yield barely budged on the U.S. retail numbers sitting at just under 4.47%, while German Bund yields were a steady 2.695%, having touched their highest since late March earlier this week.

In the commodity markets, Brent oil prices lost some of their early momentum to stall at $68.46 a barrel and safe-haven metal gold slipped almost 1% to $3,314 an ounce.