Markets cautious ahead of US retail sales news
By Pan Pylas, AP and AFPLONDON/HONG KONG--Caution was the watch-word Friday as investors awaited U.S. retail sales figures in the run-up to a crucial meeting of the U.S. Federal Reserve next week. Ongoing uncertainty over Syria also kept a lid on sentiment.
September 14, 2013, 12:01 am TWN
The consensus in the markets is that retail sales rose by a monthly 0.4-percent in August. Though that's hardly spectacular, analysts said it would probably be enough to cement market expectations that the Fed will start reducing its stimulus at the end of its two-day policy meeting on Wednesday. Producer price data for August will also be monitored.
Currently, most analysts expect the Fed to begin “tapering” its stimulus by US$10 billion. The Fed has been buying US$85 billion in bonds every month in an attempt to keep a lid on borrowing rates and boost lending. Most economic indicators have suggested that the U.S. economy, the world's largest, is healing.
In Europe, the FTSE 100 index of leading British shares was down 0.3-percent at 6,573 while Germany's DAX fell 0.1-percent to 8,487. The CAC-40 in France was 0.2-percent lower at 4,100.
Wall Street was poised for a steady opening with Dow futures and the broader S&P futures down 0.1-percent. How they open will likely hinge on the retail sales figures in particular, which are released an hour before the bell.
As well as focusing on the future of Fed policy, investors continued to monitor any developments surrounding Syria. Russia proposed Monday that Syria avoid a U.S. military strike by surrendering control over its chemical weapons. Damascus quickly jumped at the offer. Top U.S. and Russian diplomats are holding talks in Geneva to discuss the specifics.
Asian markets were mostly lower in quiet trade on Friday, at the end of a positive week for investors, as attention turns to next week's U.S. Federal Reserve meeting.
Tokyo rose 0.12 percent, or 17.40 points, to 14,404.67 thanks to a pick-up in the dollar against the yen, but Sydney drifted 0.44 percent, or 22.9 points, lower to 5,219.6 after almost ending at a five-year high on Thursday.
Seoul finished 0.49-percent, or 9.74 points, down at 1,994.32 while Shanghai shed 0.86 percent, or 19.39 points, to 2,236.22. Hong Kong slipped 0.17 percent, or 38.44 points, to 22,915.28.
Global markets have enjoyed a bright week following a string of upbeat Chinese data — including on trade and factory output — indicating the world's number two economy may have turned a corner after suffering a slowdown in the first half of the year.
Figures showed Japan's economy grew faster than initially thought in the April-June quarter while concerns over a possible U.S.-led strike on Syria also abated.
Gold was US$1,314.40 an ounce at 1030 GMT compared with US$1,341.30 late Thursday.