A disappointing retail sales figure has done little to help elevate an already depressed pound. However, that weak pound has done little to lift the FTSE, with markets continuing to feel the residual effects of Wednesday’s FOMC meeting. 

  • European markets ease back on central bank fears. 

  • UK retail sales highlight a decline in food sales. 

  • Tesco growth slows, but online sales impress.

European markets are heading towards the weekend on the back foot, with declines for the likes of the Dow and S&P 500 highlighting the ongoing concerns that rising inflation could soon curtail the expansive monetary policy mix around the world. Despite promises that central banks will remain accommodative, we are evidently moving towards a phase that will become increasingly dominated by attempting to quantify just how long we have left until the pendulum starts to swing back towards monetary tightening. With Norway’s central bank laying out plans to start raising rates in September, we are evidently seeing growing confidence that the worst is behind us and thus normalization will be required to avoid overheating. 

The pound has been hit hard in the wake of Wednesday’s FOMC meeting, but about of disappointing retail sales figures has further increased the pressure on sterling this morning. Nonetheless, the decline in May retail sales is perhaps more indicative of a shift in spending habits rather than a decline, with consumers opting cut back on food purchases (-5.7%) in favor of eating out. That pressure on food sales does bring the supermarkets into focus, while data from Tesco further highlighted how demand growth has been slowing in recent months. However, while questions have been asked of in-person demand at Tesco, digital capacity improvements have facilitated a whopping 22.2% in online sales compared with last year.  

Ahead of the open, we expect the Dow Jones to open 26 points lower, at 33,797. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD falls toward 1.1850 amid souring market mood

EUR/USD is trading closer to 1.1850, down on the day, as Monday's concerns about slower growth following the disappointing ISM Manufacturing PMI have spilled over to Tuesday. The risk-off mood, also backed by rising US covid cases, is boosting the safe-haven dollar.

EUR/USD News

GBP/USD clings to 1.39 as UK covid cases fall

GBP/USD is trading around 1.39, little changed, as UK covid cases extend their drop toward 20,000. The broader market mood is also calmer despite growth worries. 

GBP/USD News

XAU/USD continues to target $1804 and $1800 support levels

Gold is holding the lower ground, heading closer towards $1800, as traders remain cautious and refrain from placing any fresh directional bets ahead of the all-important US NFP data due this Friday.

Gold News

Bitcoin and altcoins correct before another run-up

Bitcoin price has dropped 10% since its August 1 swing high at $42,599. Ethereum price follows BTC and has shed 9% as it bounces off the $2,460 support level. Ripple price came extremely close to retesting the range high at $0.785 but is now undergoing correction.

Read more

Delta Doom is set to storm America, the dollar could emerge as top dog

"America is coming back" – these words by US President Joe Biden have sounded like a victory lap for the country's success in depressing COVID-19 cases, hospitalizations, and especially deaths. The charts are indeed impressive:

Read more

Majors

Cryptocurrencies

Signatures