The Bank of Japan downgraded its growth forecast for the current fiscal year
Wall Street stocks were mostly lower overnight, pulling back further from the record highs amid uncertainty over rising coronavirus cases. On the positive side, unemployment claims fell by 26,000 last week to 360,000, the lowest level since the pandemic struck last year.
In individual stocks, AIG rallied over 3.5% after the company reached a deal with Blackstone Group to help manage some of its life insurance assets. As such, the S&P 500 and the tech-heavy Nasdaq fell 0.33% and 0.70% respectively while the Dow Jones Industrial Average bucked the trend to finish 0.15% higher.
Asian equities were mostly lower as well. Tokyo’s Nikkei 225 index shed nearly 1% after the Bank of Japan kept its policy settings intact but downgraded its growth forecast for the current fiscal year, citing high uncertainty related to the pandemic. The Kospi in Seoul declined 0.28%, the Shanghai Composite index declined 0.71% while Hong Kong’s Hang Seng and Australia’s S&P/ASX 200 gained 0.03% and 0.17% respectively.
In Europe, however, investor sentiment has improved somewhat, with major indexes trading higher on Friday. The Stoxx Europe 600 index rose 0.25% in early trade. On the data front, Eurozone’s final CPI came in at +1.9% in June, in line with the preliminary estimate. U.S. stock futures were flat ahead of retail sales data due later today.
Meanwhile, the dollar index extends the ascent, approaching recent highs in the 92.80/85 band. On Thursday, Fed’s Powell suggested that high inflation might persist more than initially anticipated. Amid these comments, the greenback derived some support to send the euro back to the 1.1800 area following failed bullish attempts in the 1.1850 area. Strong US retail sales data could add to the positive momentum surrounding the dollar later in the day.
