Tech leads the drop as equities correct in European morning trade

Risk sentiment leans towards the softer side today

  • Eurostoxx -0.9%
  • Germany DAX -1.5%
  • S&P 500 futures -0.6%
  • Nasdaq futures -1.4%
  • Dow futures -0.2%

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.

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.

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.

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