European equities opened at fresh all-time highs to start the day amid a weaker euro
US stocks finished little changed overnight, with banks and communications stocks leading the gains in cautious trading ahead of the retail sales report due later today. October retail sales are expected to increase by 1.5%, up from September’s 0.7% gain, boosted by higher gasoline prices. US President Biden’s formal signing of the $1.0 trillion infrastructure spending bill added to a more upbeat mode in the markets. Now, market participants await quarterly reports from big retailers later in the week.
Asian stocks climbed on Tuesday, cheering a virtual meeting between US President Joe Biden and China’s President Xi Jinping that triggered a risk-on tone across the markets. Biden said that US-China relation is profoundly important to the world while China’s Xi noted he stands ready to move US-China relations forward in a positive direction. However, the Shanghai Composite Index failed to preserve early gains to shed 0.3% eventually and Tokyo’s Nikkei 225 added 0.11%.
In Europe, equities opened at fresh all-time highs to start the day amid a weaker euro following yesterday’s dovish comments from the ECB Governor as Lagarde said that conditions for a rate hike are very unlikely to be met in 2022. On the data front, the UK ILO unemployment rate declined to 4.3% in September from 4.5% in August while the average earnings including bonus rose by 5.8% in September, surpassing an estimate of 5.6%. US stock index futures are keeping closer to flat levels, struggling for direction ahead of the opening bell.
In currencies, the dollar is slightly off fresh long-term peaks but stays resilient ahead of US retail sales data. The EURUSD pair extended losses to the 1.1355 area on Monday to turn marginally positive today. Still, the common currency struggles to get back above the 1.1400 figure as traders continue to digest a dovish message from Lagarde. It looks like the pair would stay under pressure in the short term.
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