Market tones are calmer to start the day, with equities looking to bookend the week with gains. Futures are pointing higher although there are still lingering nerves surely after last week’s crushing blow. Despite a potential respite in Europe, the outlook remains gloomy with the ECB likely to hike into a recession.

In FX, the yen is holding its ground after yesterday’s retracement. USD/JPY has slipped back below 135.00 and the weekly close today will be one to watch in determining whether the breakout earlier in the week is more of a fake out instead.

Meanwhile, there has been ongoing choppiness in the dollar and the early gains yesterday were wiped out after US PMI data highlighted a slowdown in the economy. That could be a cause of concern for the Fed later on in Q3 and in Q4.

There is plenty for markets to digest as such but for now, a pushback on factors vindicating more aggressive Fed tightening may be reason enough for some relief.

Looking ahead to Europe today, UK retail sales will be one to watch in seeing how much the cost-of-living crisis is weighing on consumption. The May readings are expected to reflect a decline already, so we’ll see if there is any heavier miss on estimates. Then, we’ll have the Germany Ifo business survey to gauge further the damage to economic sentiment following the dismal PMI readings yesterday.

0600 GMT – UK May retail sales data0700 GMT – Spain Q1 final GDP figures0800 GMT – Germany June Ifo business survey current conditions, outlook

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.