Sentiment remains sour, stocks under pressure

Unfortunately, this week's three-day Powell testimony failed to calm the markets, and the negative trend persisted despite his ability to send stocks higher usually.

However, it looks like the 10-year yield might be topping in the 1.5% area, at least from the short-term perspective, possibly offering some respite to US stocks.

Earlier today, German retail sales for August failed to meet expectations and jumped 1.1% year-on-year, up from -4.5% in July, with the monthly change staying at 0.4% against the consensus of a 1.9% increase.

Elsewhere, the EU inflation just rose to 3.4% in September, up from 3% previously, while the core gauge jumped from 1.6% to 1.9%. Nevertheless, the ECB is in no rush to tighten monetary policy. 

During the US session, investors will pay attention to the Canadian GDP data for July, expected to decline notably to -0.2% from 0.7% previously. As a result, the Canadian dollar might be volatile afterward.

US personal income and spending data are on the agenda as well, along with PCE inflation indices. 

Lastly, the US manufacturing ISM will be released and should tick lower from 59.9 to 59.6 but remain above the euro zone's 58.6.