After the rally in March and April, things are still looking a little bit uncertain,economy is facing downward pressure and gross domestic product data due Friday will reflect challenges.
European and Asian equities fell with U.S. stock index futures, weighed down by weakening corporate earnings and subdued economic data. Crude oil retreated from a six-month high, while haven assets including the Japanese yen and gold advanced. Germany announced its fastest GDP growth in two years for the first quarter, before updated figures are released for the euro area. Malaysia unveiled its slowest expansion in six years. U.S. reports are projected to show retail sales increased in April for the first time this year and consumer sentiment climbed in May from a seven-month low. South Korea’s central bank left its key interest rate at a record low.
The MSCI All Country World Index was set for a third weekly decline, its longest losing streak since January. South Africa’s rand and South Korea’s won led declines among emerging-market currencies as the yen strengthened against all of its major counterparts. Australia’s dollar slid to a two-month low amid speculation the central bank will cut interest rates further this year. Crude fell toward $46 a barrel as copper slumped in Shanghai. The 10-year U.S. Treasury yield slipped to a one-month low. Bullish momentum in equities from a February low faltered this month as signs of weakness in the global economy heightened concern about whether central banks’ have the ability to revive growth. Bank of Japan Governor Haruhiko Kuroda said Friday that risks to Japan are tilted to the downside and reiterated that monetary policy will be loosened further if needed. Chinese figures for new loans and money supply are scheduled to come out as early as Friday, while reports on industrial production and retail sales are lined up for Saturday. Industrial output growth is expected to have cooled in April and new loans are estimated to be down more than 40 percent from March. The Shanghai Composite Index dropped for a fourth week, the longest string of losses in two years, and the Hang Seng China Enterprises Index was poised to enter a correction. Hong Kong’s Hang Seng Index slid to a two-month low.