European markets expected to open lower, flash PMIs are in focus
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European markets expected to open lower, flash PMIs are in focus

Following the selloff in US markets last night, we can expect a sharp decline in European stock markets this morning, with the main focus on UK retail sales for March and the flash PMIs for April from France, Germany, and the UK.

In contrast to yesterday's generally positive session in the European markets, US markets turned negative following a speech by Fed chair Jay Powell laying out the case for a possible 50bp rate hike next month.

In Asia, the dollar rose on Friday morning. With higher US yields, the dollar increased for a seventh consecutive week against the yen and posted gains against China's yuan for the best week in over two years.

UK retail sales

Consumer spending in the UK rebounded in January after a slowdown of -0.4% in December. The fuel sales boom was backed by a rebound in the household goods and furniture sectors, with high street sales also showing a decent pickup in 2022, which began with a 1.9% rise.

Nevertheless, it appears that consumers are already holding back, as BRC retail sales declined by 0.5% in February, which suggests the March core retail sales may come in a negative number too, with expectations of a -0.4% decline. The retail sale is also expected to shrink 0.3% month on month.

Japan CPI data

Japan's consumer price index (CPI) grew 0.4% month-over-month, and the national core CPI increased 0.8% year over year. The national CPI rose 1.2% year-over-year in March 2022, according to data released earlier in the Asia-Pacific session. For April, purchasing managers' indexes (PMIs) were 53.4 in manufacturing and 50.5 in services.

Events of today

Later today, the European economic calendar is packed with flash PMIs from Germany, Europe, the UK, and the US. In the meantime, investors focus on Canada's retail sales for February ahead of the speeches from Lagarde and Bailey.