Look Ahead 13/9/23: US CPI; UK GDP; IEA oil report; Redrow
Watch out for the equity, dollar and oil reaction to the keenly watched US inflation reading, UK GDP, industrial production and trade figures. Redrow’s results give us more clues as to how the UK property market is faring.
UK GDP, industrial production and trade balance figures due
Hello, I'm Angeline Ong, and welcome to your Look Ahead to Wednesday, 13 September 2023. We begin in the United Kingdom, where we have gross domestic product (GDP) numbers and industrial production, along with trade balance figures.
Just looking at sterling versus the euro here, because this is a really interesting cross, given that we are in an European Central Bank (ECB) week. The UK economy has also been in an interesting states, given that its growth of 0.2% in the second quarter confounded and surprised economists who were expecting a weaker number.
Sterling has also been supported versus the euro, as increasingly data has started putting the Bank of England (BoE) on track to hike rates again, although they are watching data points very closely, especially that inflation data. Manufacturing investments also will be ones to watch, given they perform relatively strongly in the second quarter.
Turning to the US, where inflation will be key. We are looking out for the consumer price index (CPI) number there. What will be very, very interesting is if suddenly we see inflation start kicking up again. There's no expectation from that from the polls at the moment.
But don't forget, those are backward-looking numbers. Those polls would have been done many, many weeks earlier. Now there is this growing concern that actually inflation is starting, those inflation pressures are starting to creep back again. And this might mean that the Federal Reserve Bank (Fed) will have to keep rates higher for longer.
Oil investors wait on inflation data
I also want to chat to you about oil, because oil is going to be quite key in this coming session. We've got the EIA oil market report and also the EIA crude oil inventories. What they say will be interesting, given that Brent futures are still holding above $90 a barrel.
Investors, of course, waiting on the inflation data as well, because that could give us an indication of where interest rates are hedged and whether they might go higher for longer in the US and Europe.
Brent, though, reaching $90 a barrel in the last week, for the first time in 10 months, if I widen out this chart for you, after Saudi Arabia and Russia announced that they would extend voluntary supply cuts, or they combined 1.3 million barrels per day until the end of the year. And sticking with the energy theme, we've got Tele Oil also out with first-half numbers.
Housing sector volatility evident
In the housing industry, Redrow is out with four-year numbers. Now, this is going to be interesting reading, because home builders like Redrow, like Belware, and like Persimmon, they've all flagged persistent, stubborn market challenges, despite some signs that there is a pick-up in activity.
Of course, rising interest rates and also the slowdown amid uncertainties of the consumption have meant that it's really been quite a difficult time for this industry as a whole. And you can see here Redrow's chart.
Look at that volatility there, even on a daily basis. So trading between 4.27 and 5.40, struggling to break above the 5.20 resistance point here in the near term, and also longer-term view, that 5.40 resistance level.
Now, if we see that Redrow comes out saying that perhaps inflation and those pressures on new mortgage borrowers, those that are wanting a mortgage for the first time, first-time buyers, if pressures are easing there, then perhaps we could see this stock pick higher.
If not, if we don't get any positive comments in that sort of regard, then we could see Redrow and its peers still being under the cosh in the months to come.
And that's it for now. For more market-moving news, I'll be back on Beat the Street at 1.30pm, London time, every single day to give you a heads-up to the Wall Street Open.
My colleague Jeremy Naylor will be on at 7.30am every morning for Early Morning Call ahead of the European opening bell. Follow me on Twitter at IG.com and @aAngeline Ong. This is IGTV. Thank you.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance. Upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.