Look Ahead 10/10/23: Middle East tensions eyed; BRC retail sales; Australia confidence; PepsiCo

(Video Transcript)

Markets volatile amid Middle East uncertainty

Hello, I'm Angeline Ong and welcome to IGTV. This is your special Look Ahead to 10 October 2023. There'll be plenty of market-moving action given we're keeping a close eye on what's happening in Israel.

The safe-haven dollar, rising against the euro and sterling as military clashes between Israel and the Palestinian Islamic group, Hamas, deepened political uncertainty across the Middle East.

Taking a look at this chart, because we've got the BRC Retail Sales Monitor as well. That is a key one to look out for given that we are starting already the countdown to the holiday shopping season.

Can we expect a recession?

This is very much a US dollar story as well because, since the geopolitical uncertainty out of the Middle East, there have been many concerns of recession fears, concerns that perhaps the US dollar's inverse relationship with risk appetite will become more pronounced again. This is according to the global head of ethics research at HSBC, Paul Mackel.

Australian business and consumer confidence data due

Also turning our attention to Australia because we've got consumer confidence details there as well and the business confidence data.

Let's take a look at the Aussie dollar versus the US dollar because this is the hourly chart.
There has been quite a bit of volatility there given that both central banks from Australian and New Zealand hit the pause button for now on interest rate hikes. However, they have not completely closed the door to that and said they are closely monitoring the situation.

We haven't yet quite started on the earnings season. However, it is almost upon us. We've got a trading statement from REACH. This is out of the UK.

PepsiCo weathers turbulence through diversification

The big one to look out for will be PepsiCo. PepsiCo out with third-quarter earnings: it has been quite robust recently in terms of its numbers, despite the fears that consumption was just going to fall away.

However, given that it also has diversified - it's got a wider ‘fun food’ segment - it has managed to weather the storm. Look at its chart there ahead of its results. What will be interesting, of course, is what PepsiCo says about consumer behaviours as we come up to Thanksgiving, Black Friday and, of course, the Christmas shopping season.

And that's the latest from us. We'll be keeping a close eye on the market reaction to Israel-Hamas, as I mentioned earlier. And don't forget, Beat the Street is at 1.30pm at London time. We'll be counting down to the market reaction across Wall Street ahead of the Open for you as well.