US markets caught a strong rebound on Thursday with the sell-off induced by the surging dollar following the big jump in US payrolls having run its course for now. The unexpected drop in US retail sales during February was heralded as a positive for equities since it possibly delays the first rate hike by the Federal Reserve. There is more downside risk leading into next week’s Fed meeting but with the removal of the “patience” language from the statement now largely expected, US equities may be gearing up for a recovery. Having made big gains yesterday US stocks look like making a small pullback at the open on Friday as trepidation still remains ahead of next week’s meeting of the FOMC. Since the beginning of January capital flows have been distinctly in favour of European over US shares. Europe has seen inflows of over $30bn but the US saw outflows of over $40bn. The German DAX should by the end of today have seen its ninth straight week of advances while the major US benchmarks excluding the Nasdaq are basically flat on the year. The prospect of ECB asset purchases has caused the momentum very much in favour of European equities but as multiples expand in the Europe, US stocks gain better relative valuations. The US is the strongest developed economy and an indirect beneficiary of increased global liquidity from the ECB so those in favour of better value may start to move back to the US in the coming weeks. Aeropostale shares are expected to drop sharply on the open after forecasting a weaker than estimated first quarter. US producer price inflation and consumer sentiment data are expected at 12.30pm and 2pm GMT respectively. Futures suggest the: S&P 500 will open 2 points lower at 2,063 with the Dow Jones expected to open 38 points lower at 17,857 and the Nasdaq 100 5 points lower at 4,331. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.