Risk sentiment was notably weaker in today’s London trading session, despite the positive signs seen during the Asian trading hours, leading traders to speculate that US equities are in for a day of small losses. The benchmark index for European equity markets ended at its lowest level in a month, as uncertainties lingered in the global economy.
For one, the recent run of weak data from China is starting to look like a concern for most investors, leading to a bit of selloff during the Tokyo trading session. However, other Asian equities were able to rebound quickly when the RBNZ decided to hike interest rates and Australia printed a very strong employment report.
Right now, traders are looking at the upcoming US retail sales release for further clues on how to trade the major currency pairs. The report is slated to show a 0.3% uptick in the headline figure and a 0.2% increase for the core version of the report, which excludes volatile items in the computation. This should mark a decent recovery from the previous report, which showed either a decline or a flat reading in consumer spending.
US Equities Outlook
A strong showing from the US retail sales release in today’s US session could help boost risk appetite, at least for equity traders. This might lead to small gains for the indices, such as the S&P500 and Nasdaq, unless the risk off market sentiment continues to haunt trading.
Bear in mind that Stoxx Europe 600 index marked a 0.2% dip for the day while the UK FTSE index lost 0.2% as well. A weaker than expected US retail sales report could spell bad prospects for future hiring and spending, which might then lead to a weaker open for most US equities.
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