Early morning call: Halifax house price index rises for the first time in eight months

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Halifax house price index unexpectedly rises

World indices are set to post declines for the first week of the year, with one exception, Japan’s Nikkei 225, which benefited from the weakness of the Japanese yen. The Halifax house price index is unexpectedly rising for the first time in eight months, up 1.7% YoY. Economists had anticipated a decline of 0.4%. In Germany, retail sales fell more than expected in November: -2.4% YoY. The market had forecast a 0.1% fall.

USD strength

One trend that seems to be in place is US dollar strength. It is poised to record its highest weekly gains since the end of July 2023. Stats released earlier this week encouraged the market to review its Federal Reserve rate cut expectations. Yesterday ADP employment change rose more than anticipated, showing resilience in the US labour market. The idea is that the data seems to be demonstrating that the US economy is weathering higher rates better than previously thought. This may encourage the Fed to keep the rate pressure up to make sure, beyond any doubt, that it's beaten inflation out of the economy.

Could this change with two stats to be released later today? First at 10am, with eurozone consumer price index. Economists expect a 3% rise in December YoY, after a 2.4% increase the prior month. Yesterday Germany's CPI growth accelerated for the first time in seven months, to 3.7% YoY.

But of more importance will be NFP. Expectations are for 170,000 job creations for the last month of 2023. The unemployment rate should rise to 3.8%, from 3.7% in November. As for average hourly earnings, they should rise by 0.3% MoM and 3.9% YoY. That annual figure would be at its lowest since mid-2021.

Endeavour Mining appoints new CEO

After the London market closed yesterday, Endeavour Mining announced it had removed CEO, Sébastien de Montessus, with immediate effect, citing "serious misconduct". The action followed an investigation by the board into an irregular payment instruction of $5.9 million issued by him in relation to an asset disposal by the company. The company has appointed Ian Cockerill, deputy chair of its board, as the new CEO.

Constellation Brands to include more higher-end alcoholic brands

Beer maker Constellation Brands will report its quarterly earnings today before the market opens. Q3 earnings forecast to come in at $3.02 per share and revenue at $2.54 billion. Demand for premium products continues to grow, and Constellation Brands is revamping its portfolio to include more higher-end beer and wine brands.

The lowdown on commodities

WTI dropped below $73 mid-afternoon yesterday, driven by the latest EIA oil inventories. In line with the API data on Wednesday, the EIA reported that crude oil stocks fell more than expected, but this was overshadowed by big increases in gasoline and distillate stockpiles. Crude oil inventories fell by 5.5 million barrels, more than forecast, mainly due to the situation in the Red Sea. A lot of refiners and buyers of crude oil choose to go to the United States rather than sail their boats around the Horn of Africa. Gasoline stocks rose by 10.9 million barrels, their highest week-on-week rise in more than 30 years. Distillate stocks rose last week by 10.1 million barrels. Refineries ran hard and gasoline demand dropped over the holidays. As for distillates, they rose as the weather in the Northeast is unusually mild. Oil analysts are now waiting for Baker Hughes data later today. Last week, the total oil rig count rose by two to 622, a rise entirely due to the number of rigs in operations up to 500 from 498.