Stock markets may be in trouble if U.S. retail sales data disappoints, adding to slowdown fears
- Slowing inflation might weigh on the Canadian dollar and the British pound.
- Stock markets may face selling pressure if U.S. retail sales data disappoints.
- A dovish ECB stance may punish the euro as well as Eurozone stock markets.
A defensive tone prevailed on Wall Street last week despite swelling Federal Reserve interest rate cut expectations. Treasury yields plunged across maturities as dovish guidance from Fed chair Jerome Powell and weaker-than-expected inflation data firmed up bets on the start of an easing cycle in September.
Against this backdrop, the bellwether S&P 500 stock index added just 0.8%—the smallest rise in three weeks—while the tech-oriented Nasdaq 100 fell 0.5%. That seemed to mark a tone shift for the markets, whereby recession worries build as the arrival of…
