CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

FTSE Set For A Softer Start Despite Retail Sales Surging

Article By: ,  Senior Market Analyst
July 24, 2020 3:17 AM
Concerns over the economic recovery in the US and raising US – Sino tensions are dragging on investor sentiment at the end of the week. European bourses are heading for a weaker start on the open despite UK retail sales soaring.

The week was on the whole upbeat following the EU recovery fund agreement; a stimulus package which sent a strong message as the EU reached an important milestone funding expenditure through capital market borrowing. The package will also go some way to cushioning the blow from the coronavirus crisis. Needless to say, the Euro has been the star performer this week, surging to a 21-month high versus the US Dollar.

US labour market recovery stalls
Concerns over the economic recovery in the US are weighing on risk sentiment. Data yesterday showed that the US labour market recovery was stalling as the US struggles to get control of the coronavirus outbreak. The number people signing up for unemployment benefits saw a weekly increase to 1.4 million, up from 1.3 million. The weekly increase comes as parts of California and the sunbelt re-impose lockdown measures in an attempt to slow the spread of the virus. 

The data comes as Republicans and Democrats on Capitol Hill fail to reach and agreement on further stimulus ahead of the expiry of desperately needed unemployment benefits.
Adding to the risk adverse mood, China ordered the closure of the US consulate in Chengdu, in a tit for tat move following the shutting of the Chinese consulate in Houston. Fears are growing over the stability of the Phase 1 trade deal.
UK retail sales
UK retail sales surged in June, smashing expectations. Sales jumped 13.9% mom, adding to May’s 12% surge. This was well ahead of expectations for an 8% increase. The data shows that as lockdown measures eased and non-essential shops opened in the middle of the month, consumers were ready to spend. This is a very encouraging reading and boosts optimism surrounding a V-shaped recovery. However, as the government withdraws its support from the labour market, retail sales could quickly fall away. The Pound has lifted off session low and moved into positive territory at $1.2745.

PMI’s up next
Looking ahead PMI data will be in focus across the regions. The UK data is expected to be upbeat showing that activity in both the dominant service sector and the manufacturing sector expanded in July. If strong enough the numbers could boost optimism further surrounding a V-shaped recovery. Eurozone and US PMI data is expected to be similarly upbeat.



StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024