Look Ahead 22/9/23: BoJ; UK retail sales; EZ PMIs; oil

(Video Transcript)

Sun sinking on ultra-easy monetary Japan

Hello, I'm Angeline Ong and welcome to your Look Ahead for 22 September, 2023. Friday couldn't have come any earlier. It's been such a busy week on the central bank front, but we're not done just yet. We've got Bank of Japan out with its interest rate decision.

Just showing you the dollar versus the yen here because this is a really interesting cross given that the Bank of Japan is expected to end its negative interest rate policy next year. This is according to most of the economists polled in a poll by Reuters.

This is as the market has started to talk about the demise of Japan's ultra-easy monetary settings. It's also an interesting time for this cross because it comes at a time when the US Federal Reserve has kept the door open to another rate hike potentially.

This year, traders' bets on the benchmark rate now remaining unchanged in November and December. They stood at 71% and 54% respectively, according to the CME's FedWatch tool.

UK's inflation battle is not yet over - BoE

Also want to quickly check in on cable for you because it's been an interesting day on that front. The Bank of England (BoE) halted its long run of interest rate rises as Britain's economy slowed and inflation fell. However, like the US, the UK is stressing that the job and the fight against inflation is not yet done.

With that, we dovetail nicely to the GFK consumer confidence details and also retail sales data and Confederation of British Industry (CBI) industrial trends orders that is out on Friday. All this will give us a bird's eye view as to whether the UK consumer is starting to buckle or recover after two years of high inflation.

From the Euro Zone, UK and US, we also have manufacturing and services purchasing managers' indexes (PMIs). These are the flash numbers.

And from the US, of particular interest to our clients is the Baker Hughes oil recount because we're seeing a lot of volatility in the oil space, especially in recent sessions, given we've had so much on both the demand and the supply side.

OPEC puts the squeeze on global oil supply

This is a view of US crude for you. This is a daily chart, and as you can see here, we've had higher highs since the middle of June. Prior to that, it has been quite choppy, giving you an hourly view as well, because with the hourly view, you can see how much volatility has been seen in this space.

However, there's probably more to come, given that prices fell in the previous session or post-Fed. This is after the Fed held rates but signalled potential future hikes, and that meant that oil prices fell after posting the biggest decline in a month in the previous session.

At the same time, we've got drawdowns in US crude stockpiles, and we've also got this concern that OPEC plus continues to reign in on the supply side.

So that's it from me for now, but do tune back in at 1.30pm every weekday for Beat the Street, where I give you the heads-up ahead of the Wall Street Open, and IG's Angela Barnes will be on at 7.30am to do the same for the European trading day on Early Morning Call. Until then, do follow us on Twitter at IG.com. This is IGTV.