Look Ahead 1/12/23: China Caixin; Nationwide; US manufacturing; Powell

(Video Transcript)

Markets set to pivot on Powell’s words

Hello, I'm Angeline Ong. Welcome to your look ahead to Friday 1 December 2023. Now, what a month November has been! We've seen this sudden climb in equity markets due to these expectations that the Federal Reserve (Fed) might soon cut interest rates as soon as March, according to the FedWatch tool. This is the CMEs, of course.

However, there's still a lot that could change the overall mood. For example, we've got the Chinese manufacturing CMEs out of China. Expectations for November 49.8 there. Many have been expecting slightly better figures out of China, but China has so far disappointed.

If we see more weakness, though, that could potentially drive the mood of the markets down. Also, don't forget we've got Fed chair Jerome Powell's speech on deck on Friday. So that could also mean the markets pivot, depending on what he says.

Sterling strong against the greenback

Now, from the UK, we've got the nationwide house price index, the consensus month on month for November, negative 0.4%. And on a year-on-year reading, negative 2.3% expected.

Just taking a look at cable, because this is a very interesting space, especially with sterling holding up quite nicely against a weaker dollar due to the rate cut expectations, which has dampened demand for the dollar.

What's also fascinating in the in the housing space is that we had Rightmove out recently saying that it saw resilience in the housing market in that advertisers are starting to spend a bit more. Now, this is a blink of light in a sector, the UK housing sector, which has been down for some time now.

Further along the session, we are also looking out for the ISM manufacturing PMIs and the Baker Hughes oil rig count as well.

Now, it's a big week for oil. We've been monitoring those prices being underpinned by expectations that OPEC+ meeting currently online, while the cut there could approach two million barrels per day, depending on the talks.

This is according to a source speaking to Reuters, a delegate taking part in the talks. Also, just some other headlines coming through in the last few minutes, really. It says here OPEC+ total cuts could approach for the first quarter of 2024. It could exceed 1.3 million barrels per day in terms of Saudi and Russian voluntary cuts.

So, depending on what we get from OPEC+, that could really shift the mood music surrounding oil prices and do look out for any indications as to whether or not we get those comments from Jerome Powell on Friday.

This could indicate whether or not we get that early interest rate cuts in March, or perhaps it's now a back on ice. This is IGTV.