Look Ahead 6/9/23: Bank of Canada; US trade; Halfords; Barratt Developments
Canada’s central bank is expected to hold rates steady as its economy cools. US trade figures will be key after Friday’s soft US jobs report. Plus, numbers from Halfords, Barratt Developments and the Restaurant Group.
Hello, I'm Angeline Ong. Welcome to your Look Ahead to Wednesday, 6 September 2023. First up, we're looking at Australia out with their key to gross domestic product (GDP) growth rate numbers, expectations, 0.3%, quarter-on-quarter. Of course, taking a look at the Australian dollar against the US dollar here, because, as expected, the Reserve Bank of Australia (RBA) kept its cash rate at 4.1% for a third month.
Economists warn of Australian high inflation
However, what was perhaps more important or more interesting was that in its statement, the RBA said the Aussie economy was experiencing a period of below-trends growth and expected it to continue for a while. RBA warning that further tightening might be needed to bring it to heel in a reasonable timeframe.
Yesterday, a Reuters poll on RBA rates indicated that most economists did expect a final rate hike next quarter, and also that inflation was still too high, and that services price inflation had been surprisingly persistent overseas, and the same could occur in Australia, too.
Now, turning to the United States, we've got the trade balance figures, the ISM service purchasing managers' index (PMIs), and also the Federal Reserve Bank (Fed) Beige Book.
BoC expected to hike interest rates
And over in Canada, there's also FX volatility, perhaps because we've got the Bank of Canada's interest rate decision, the overnight rate expectation, they're expected to stay at 5%. Just taking a look at the Canadian dollar versus the US dollar here, if I may.
Now, this cross has been trending higher since around mid-July, and if we go further back, it has been quite a volatile one, which is probably why our clients like trading this interest rate.
It has recently been trading within this 12,978 and 13,800 band, but after that July low, it has started to edge higher towards 13,638, and we see it pass this 13,800 level. We could see it traversing higher towards that next resistance point at 13,872.
The Bank of Canada, as I mentioned earlier, seen keeping its overnight rate at 5%. The Canadian economy on Friday missed expectations on its GDP growth rate, which is flat quarter-on-quarter. Economists were expecting a 0.3% rise.
WH Smith trading statement due
And in terms of trading statements, we do still have a few, even though the earnings that season has quietened down now. WH Smith is out with its numbers. This is the chain that sells everything from chocolates to magazines, and they are located quite strategically in many sort of transportation services-related areas. And they also tend to do well, this company tends to do well, when there's the back-to-school sort of surge in consumption as well.
And finally, here we've got Palford out with its trading numbers as well. Now, do remember that Palford did have quite a good running during the lockdown and also the Covid period. And now that lockdown is over and people are returning and it's back to normal, largely, it has been quite painful for Palford's share prices.
Back in June, the company posted a 43% fall in annual profits, not because it wasn't doing well, but because it was hit by a tough comparison against Covid-boosted bike demand the previous year. And also in the UK, we're expecting four-year earnings from Barrett Developments and the Restaurant Group.
Well, that's it for now. For more market-moving news, I'll be back on Beat the Street at 13.30 London time to give you a heads-up to the US Trading Day and IG's Jeremy Naylor will also be on at 7:30 am on early morning call ahead of the European market opening. Follow me on at IG.com and at Angeline Ong on Twitter. This is IGTV.
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