Look Ahead 22/08/23: UK public sector borrowing; US home sales; Macy’s earnings

(Video Transcript)

GBP climb against EUR halted by joblessness, low sales

Hello, I'm Angela Barnes from IGTV with your Look Ahead to Tuesday, 22 August 2023. In economic news, we will get the UK public sector net borrowing figures at 7am. We will also get the latest Confederation of British Industry (CBI) industrial training orders at 11am.

If we pull up the euro/pound sterling chart, the pound has struggled over the past few weeks since retreating from recent highs. The pound/euro exchange rate went up by more than a percent last week following higher than expected UK inflation and wage growth, also boosting expectations of another interest rate increase from the Bank of England.

However, sterling's progress was halted by rising unemployment and a fall in July's UK retail sales, and UK data ahead could prove pivotal to the pound. Meanwhile, for the euro, limited economic data has influenced a cautious market stance.

US home sales expected to drop

Moving on to the US, where we will have existing home sales at 3pm on Tuesday. The consensus is that July sales will be down by 0.5% month-on-month. Looking at the US dollar basket charts here, the index extended late Friday's pullback after a five-week uptrend. Mixed concerns about Federal Reserve Chair Jerome Powell's speech at Jackson Hole will be watched very closely this week as well.

Mostly upbeat US data has allowed the greenback to remain firmer, keeping an eye on that and other currency spreads, of course, in addition to the pound/dollar in the course of the week.

Oil price on the rise

Moving on to commodities now and oil, so US crude and Brent, both slightly higher today. Actually WTI is now at 0.52%, trading at $81 a barrel. And in the US this week on Tuesday we'll have at 9.30pm the latest API crude oil inventories as well, which we'll be watching very closely.

As I said, oil up again today. Since the beginning of August, US crude is actually down about 0.45%. China demand concerns have been weighing on the minds of the investors. However, supply concerns from the likes of Saudi Arabia and the extended output cuts into September have also been supporting prices.

In other news, on the corporate front in the US, we will also have third-quarter results from Toll Brothers and Q2 results from retailers Urban Outfitters and Macy's as well. Well, that's your Look Ahead to Tuesday, 22 August. Thank you very much for watching IGTV.