Markets Today: UK Retail Sales Gets Summer Boost, Trade Deal Optimism Wanes & FTSE 100 Steady

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Asia Market Wrap - Positive Sentiment Wanes

A seven-day global stock rally slowed down in Asia as uncertainty about the Federal Reserve’s plans for interest rate cuts made investors more cautious.

The MSCI All Country World Index dropped 0.2% as Asian stocks ended their longest winning streak since January. Hong Kong shares fell 1.1%, and Japan’s Topix index slipped 0.8% after hitting a record high on Thursday.

Strong US jobs data on Thursday weakened the argument for Fed rate cuts. While no rate cut is expected at next week’s Fed meeting, expectations for further cuts this year have dropped to less than two after jobless claims fell for the sixth week in a row.

Firms like Goldman Sachs and Citadel are advising clients to buy cheap hedges to protect against potential losses in US stocks, as risks could threaten the market’s record-breaking run.

Major indexes have surged thanks to US trade deals and strong earnings reports. The S&P 500 has jumped 28% since April 8 and hit a new record on Thursday—its 10th in 19 days—driven by tech stocks. Wall Street’s fear gauge is at its lowest level since February.

For more information on the Asian session, read Asia midday: Asia stock markets pull back as USD rebounds, Hang Seng Index (Chart of the day)

UK Retail Sales Gets Summer Boost

UK retail sales grew by 0.9% in June 2025, bouncing back from a 2.8% drop in May but falling short of the expected 1.2% increase. This was the fourth rise this year.

Food sales went up by 0.7%, recovering from a 5.4% drop in May, thanks to better supermarket sales, especially beverages, boosted by warm weather. Fuel sales saw a big jump of 2.8%, the largest since May 2024, also helped by good weather. Online sales rose 1.7%, reaching their highest level since February 2022. Non-food sales increased slightly by 0.2%, with department stores and clothing shops benefiting from promotions and weather-driven demand.

Excluding fuel, sales rose 0.6%, also recovering from a 2.8% fall. Compared to last year, retail sales grew by 1.7%, reversing a 1.1% drop in May, but just below the expected 1.8% growth.

European Open - Earnings Mixed, Shares Slip

European stocks fell on Friday, reversing gains from the previous day, as investors reviewed mixed corporate earnings and awaited updates on EU-US trade talks ahead of President Trump's tariff deadline next week.

The STOXX 600 index dropped 0.4% to 549.36 points but was still set for small weekly gains. The UK's FTSE 100 also fell 0.4%, pulling back from its record high on Thursday, while most other European markets were also down.

Investors celebrated trade deals with Japan, Indonesia, and the Philippines this week, but hopes for a US-EU agreement remain as talks continue. Financial stocks led the losses, falling 1.3%, while basic resources stocks dropped 0.6%, with Fresnillo down 2.3%.

Among individual companies:

Puma shares plunged 15.1% after cutting its full-year outlook and reporting weak results.

JD Sports fell 1.5%.

Valeo dropped nearly 9% after lowering its sales forecast.

Traton, Volkswagen's truck unit, fell 4.4% after cutting its full-year outlook.

On the positive side:

Carrefour rose 6% after strong half-year results.

Volkswagen gained 2.7% after the CEO announced plans to speed up cost cuts, recovering from an earlier 2.4% drop due to a revised outlook.

NatWest rose nearly 2% after reporting better-than-expected profits and announcing a £750 million share buyback.

In economic news, German business morale improved in July but less than expected.

On the FX front, the yen strengthened to 147.10 per dollar, heading for a 1% weekly gain, its best since mid-May. A Reuters poll suggests Japan's central bank may raise rates by 25 basis points this year.

The dollar index fell to 97.448, down 1% for the week, marking its weakest performance in a month. The euro held steady at $1.1754, close to its near four-year high of 1.183 earlier this month, and has risen 13.5% this year.

The Australian dollar climbed to 0.6593, near an eight-month high, boosted by improved risk appetite after recent trade deals.

Currency Power Balance

Source: OANDA Labs

Gold prices dipped on Friday as progress in U.S. trade talks reduced demand for safe-haven assets. However, a weaker dollar helped limit the decline. The precious metal is once again below the $3350/oz handle.

Oil prices held steady on Friday, supported by optimism over trade talks boosting the global economy and oil demand, while news of possible increased supply from Venezuela kept gains in check.

Brent crude rose 38 cents (0.55%) to 69.56 a barrel, and US WTI crude increased 34 cents (0.51%) to 66.37.

For the week, Brent was set for a 0.4% gain, while WTI was down 1.44%.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, US durable goods orders are on their way later in the day.

In the interim, trade deal negotiations should continue to dominate the conversation. It will also be interesting to see if Fed Chair Powell faces fresh criticism following the Trump administration visit. Such a move could lead to further USD weakness.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE 100 Index

From a technical standpoint, the FTSE 100 index has pulled back from yesterday's all-time highs around 9163 to trade around 9112 at the time of writing.

A brief move higher this morning may keep bulls interested but it does appear that trade deal optimism may be waning. A trade deal announcement between the EU and US or UK and US could help ease tensions at a faster rate.

The FTSE has broken back below the 70 level on the RSI period 14 (see chart below). A break of the 50 level could be another sign that bearish momentum is building. Should such a move not occur. Caution may be the best way to proceed as a renewed rally to the upside could materialize.

Immediate support rests at 9110 before the 9048 and 9000 handles come into focus.

The upside does not have any historical data to focus on and thus I will look toward psychological numbers like 9250 and potentially 9500.

FTSE 100 Daily Chart, July 25. 2025

Source: TradingView.com (click to enlarge)

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