Look Ahead 7/9/23: China trade balance; UK house prices; US jobless claims; Direct Line
China’s trade balance figures will be key after the soft services data release. UK property investors brace for the latest Halifax house price index. Look out for US initial jobless claims and Direct Line Insurance earnings.
Chinese exports expected to drop
Hello, I'm Angeline Ong, and welcome to your Look Ahead to Thursday, 7 September 2023.
We begin in China, which is where we started off the week, this time with August trade balance numbers. Exports expected to fall by 9.5% year-on-year and, of course, we had a huge amount of interest in China and China-related stocks earlier in the week, when we had numbers that showed that China's services sector was weakening.
This is the Hang Seng here, which has come off quite markedly since February 2021. It's fallen by around 53% from that point to around 31 October. It did try to regain its composure from October to around end January this year.
However, it failed to maintain that level, slipping and heading towards the 18,000 level. Much will depend on China's economy and also its very slow reopening, and whether or not we're going to see consumption kick back over there.
Continuing downward trajectory for UK house prices
Now, in the United Kingdom, we've got Halifax house price data to boot. This forecast is that UK house prices will fall a fourth straight month, year-on-year. No surprise, really, given how much the UK housing market has had to contend with in terms of headwinds, high interest rates, a cost-of-living crisis, as well as the shake-out still, which is ongoing after lockdown.
Other compounding factors include Brexit, which has led to higher prices in terms of getting staff and building materials as well, and the supply chain crisis. All of this is leading to a very tough time for the UK housing market, especially with high interest rates as well.
Just taking a look at cable there, because it did climb this cross between September 2022 and on to around June this year. However, it has hit a resistance point at 13,000 and is now starting to bend towards the 12,000 mark there. Much of that because the expectation is that perhaps the Bank of England is in a wait-and-see stance when it comes to any more interest rate hikes ahead.
Saudi oil supply moves under scrutiny
And in the United States, we have initial jobless claims figures and the EIA crude oil inventories as well. Oil, of course, a big focus for us at the moment as investors watch the supply moves by Saudi and also the concerns that if the Chinese economy does bounce back quite rapidly, then we could see supply and demand rise amid that tight supply picture.
Also, just a heads up, we've got Vistry out with first-half earnings. It is starting to be really quiet now on the earnings front, but we also have Direct Line Insurance out with first half numbers. And that's it for now.
For more market-moving news, I'll be back on Beat the Street at 13.30pm London time to give you a heads-up to the US trading day. And IG's Jeremy Naylor will also be on at 7.30am on Early Morning Call to give you the heads-up to the European market opening. Follow me on at IG.com and at Angeline Ong on Twitter. This is IGTV.
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