Tech leads the drop as equities correct in European morning trade
Risk sentiment leans towards the softer side today
We are seeing hints of risk aversion in the equities space to start the day and that is reflecting softer sentiment across the market as we see a slight pullback in precious metals and also some mild strengthening in the dollar in European trading.
- Eurostoxx -0.9%
- Germany DAX -1.5%
- S&P 500 futures -0.6%
- Nasdaq futures -1.4%
- Dow futures -0.2%
Nasdaq futures are bearing the brunt of things with tech hurting once again after yesterday's drop. Futures are down by 1.4% as compared to Dow futures' 0.2% decline.
EUR/USD has pared earlier gains from 1.2175 to 1.2145 while AUD/USD is trading to session lows now of 0.7895 from around 0.7920 earlier.
There are still some exceptions though with the pound keeping more resilient as cable holds at 1.4087, near the day's highs. Meanwhile, the franc is leading losses as USD/CHF climbs above 0.9000 with EUR/CHF breaking to its highest levels since December 2019.
In the commodities space, oil is still hanging on to gains just above $62 though it also has key resistance levels to contend with ahead of the month-end.
Going back to equities and risk, the stronger correction today keeps in tune with the more cautious mood over the past few days. Fed chair Powell will be speaking later but he is expected to stick with the script and retain the status quo.
In any case, I would expect dip buyers to step back in if we do see a deeper pullback from hereon; even more so closer to 3,800 and 3,700 again for the S&P 500.