Equity futures are sharply lower this morning ahead of several key data points for the U.S.

“The whiff of uncertainty is still in the air on this Friday morning, ahead of a handful of U.S. economic data,” said economists at BMO. “Indeed, with the slew of data from Europe and China now out of the way this week, the focus returns squarely on North America and, in particular, the U.S.”

Ninety minutes before the opening bell, Dow futures are off 64 points to 10,709 and S&P 500 futures are down 11.50 points to 1,145.25. The 2 year Treasury note is 2.5 basis points lower at 0.81% and the benchmark 10 year Treasury note is 3.6 basis points lower at 3.502%. The Fannie Mae 4.5 MBS coupon is +0-04 at 101-11.

Meantime, the euro fell to as low as $1.2433USD overnight, its worst level since November, while gold climbed to an historic new high at $1,249. Also, WTI crude oil is down $1.50 to $72.90 per barrel.

Last night, former Federal Reserve Chairman Paul Volcker said in London that he is concerned the Greek fiscal crisis could cause some euro zone nations to pull out of Europe’s Economic and Monetary Union, as the benefits promised from the currency union have not materialized.

Key Events Today:

8:30 ― Retail Sales are anticipated to inch forward by 0.2% in April following a much larger 1.6% gain in March and a 0.5% climb in February. Economists say a decline in vehicle sales ― from 11.8 million units to 11.2 million ― and softer gasoline prices are two reasons why the headline will be weak. With autos excluded, the headline should be +0.5%, versus +0.6% in March. 

“With the increase in consumer confidence and the improvement in the labor market, retail sales are expected to rise for the fifth time in six months, illustrating that consumer demand is strengthening,” said economists from BBVA. “While the slow in auto sales will weigh on the total, the impact will be limited because fewer price discounts were offered. This result would support our expectation that consumer spending will again be an essential driver of economic expansion in the second quarter.”

“A seasonally adjusted decline in gasoline prices and cool, rainy weather contributed to the weak results,” said analysts at IHS Global Insight. “April chain store sales indicate strong sales at wholesale clubs and luxury chains but disappointing results at apparel and department stores. Retail sales growth should resume in May, supported by renewed growth in employment and real incomes.”

9:15 ― In contrast to retail sales, Industrial Production should be much stronger in April compared to March. Activity is anticipated to have picked up by 0.6%, compared to a 0.1% increase the month before. This will be the ninth straight month of growth in the index, which has recently been led by manufacturing (+0.9% in March).

“Industrial production growth was held back in March as utility production ― which was temporarily elevated in February due to cold weather ― declined sharply,” said analysts at Nomura Global Economics. “Excluding this distortion production remained quite strong.” 

They noted that regional surveys indicate continued increases in manufacturing output,  while last week’s labor report suggested an uptick in manufacturing hours and employment. 

“The production side of the economy continues to generate positive signals in terms of strong orders and relatively low inventories,” added economists from IHS Global Insight. “Manufacturing employment grew for the fourth consecutive month in April, a sign that businesses are becoming more confident about the strength and duration of the recovery. The European crisis might dampen corporate spending enthusiasm to some extent, but not upset the apple cart of the production recovery.”

10:00 ― Consumer Sentiment hasn’t moved too much in the past five months, and with stocks suffering last week and European debt problems in constant headline rotation, it seems unlikely that much improvement will be seen in the preliminary May survey from Reuters and the University of Michigan. Economists anticipate some improvement, from 72.2 to 73.8, based on the recent employment report, but as non-economists tend to look at the unemployment figure more frequently than the movements of nonfarm payrolls, that seems like a shaky foundation to build a forecast.

“After slipping in April, consumer sentiment is expected to rise in May prompted by the improvement in the employment situation,” said analysts from BBVA. “Private non-farm payrolls added 405K jobs over the past two months. Other economic data has been pointing to growth since mid 2009, but the labor market usually adjusts with a lag. The beginning signs of job growth will improve consumers’ outlook of both the present and the future and translate into greater consumer spending.” 

“Employment gains in March and April should help to instill confidence in the economic recovery,” added analysts from IHS Global Insight. “Recent stock market volatility will, however, prolong anxiety about personal finances. Consumers continue to rate buying conditions favorably, largely due to the availability of price discounts.”