Asian stocks fell on Monday as new data showed China’s economy slowed slightly in the second quarter, compounded by fears of a full-scale Sino-U.S. trade war looming over markets. Major currencies have been in a holding pattern in recent days thanks in part to a lull in China-U.S. trade skirmishing. Investors had also been awaiting the China data, and are still looking to June U.S. retail sales figures, to gauge the state of global growth.
The U.S. Federal Reserve reiterated on Friday in its semi-annual Monetary Policy Report to the U.S. Congress that it expected more gradual increases in interest rates due to solid economic growth. U.S. crude dipped 0.5 percent a barrel, weighed by easing concerns about supply disruptions that had pushed prices higher. Brent crude was 0.5 percent lower at $74.895 per barrel. A rising dollar drove gold prices to seven-month lows on Friday, but spot gold was up 0.2 percent on early trading today, trading around $1243.36 per ounce. Earnings season continues with reports due from companies including Bank of America, Goldman Sachs, Netflix, Microsoft and IBM.
Coming up today is the retail sales in the US where the Core Retail Sales are expected to rise 0.4%, down from 0.9% and the retail Sales are estimated at 0.4%, down from 0.8%. Stronger than expected retail sales data should be supportive for the dollar. Trading is expected to be light on Monday and Tuesday ahead of Fed Chair Jerome Powell’s testimony before Congress on Wednesday and Thursday.