FTSE to test 7500p, energy stocks seen lower, gold higher and pound under pressure before UK retail sales data

US equities gave back gains for the second day, the US dollar index consolidated around its 100-day moving average (97), as the US 10-year yield dived to 2.04% on Wednesday. Mixed earnings, combined with escalating Iran tensions, pushed some investors to the sidelines.

Japanese yen, Swiss franc and gold nudged higher as a reaction to a typical risk-off market. But the expectation of cheaper liquidity from the Federal Reserve (Fed) may not keep investors worried for so long.

The US Beige book released a positive outlook on the economy in July despite the trade disruptions. US policymakers remain concerned with higher input costs due to tariffs and rising labour costs, while the competition prevented firms from reducing their costs. But thats the reality of a capitalistic economy. Happily, the Fed is committed to provide sufficiently low-cost liquidity to maintain profitability and growth across the US firms.

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Opening calls

FTSE is expected to open 28 points lower at 7507

DAX is expected to open 103 points lower at 12238