Look ahead 28/11/23: Australia retail sales; German, US consumer confidence; easyJet; API

(Video Transcript)

Aussie benefits from weak US dollar

Hello, I'm Angeline Ong, and welcome to a look ahead to Tuesday 28 November 2023. We begin with Australia, because we've got retail sales numbers out from there. October expectations 0.2% month-on-month.
Let's have a look at the cross here, the Aussie dollar versus the US dollar.

The Aussie dollar did climb to more than a three-month high of around 66.08 before coming off slightly. And this is before the RBNZ interest rate decision on Wednesday, where the central bank is seen keeping rates unchanged.

Traders also returning from the Thanksgiving a lull late last week. This is also a US dollar story, and the US dollar has been weakening as markets – the markets price in a roughly 25% chance. The Federal Reserve (Fed) may begin easing monetary policy as early as March. This is according to the CME FedWatch tool.

Euro zone looking weak lately

Looking at Germany, we've got the GFK consumer confidence numbers from there. And also, it has to be said that the euro zone has been seeing some really weak numbers of late. There's been a chink of light in the purchasing managers’ index (PMI) number, but overall, it has been still a very sombre time for the euro zone economy.

And the same has to be said for Germany as well. Expectations there for December for the GFK consumer confidence, near 26. Now, out of the US, we've got the S&PK Shiller home price data coming out.

And also, probably the more important one is the consumer confidence reading, especially given we've just had Black Friday and Cyber Monday as well. And the anecdotal evidence shows that consumers are buying, but they're becoming more cost conscious.

Key US risk events on deck

We're also looking out for several key US risk events as well. We've got the core personal consumption (PC) price Index. This is the Fed's preferred gauge of inflation. And also, the speech by Fed chair Jerome Powell later in the week. And the key one to look out for in the coming week is the jobs report next Friday.

Meanwhile, we've got ATI crude oil inventories as well. Just showing you Western Texas Intermediate (WTI) here, because oil has been weakening the prices rather. This comes in a time when COP 28 kicks off this week in Dubai, the same day when Organization of Petroleum Exporting Countries Plus (OPEC+) is meant to have their delayed meeting online. And the cartel is seeing concerning production cuts into the start of the new year.

In terms of earnings, well, it's starting to get really quiet now, but we still have a few names reporting, and they include Tops Tiles, Pets at Home and also easyJet.

Travel fatigue may be setting in

Now, EasyJet is, of course, the British discount airline, and it said back in October that it had had 73% of its fuel needs for the first half of 2024 and 46% for the second. This is at an average cost of $109.62 a barrel and $104.05 a barrel, respectively.

Now, this is going to be key, but also watch out for what EasyJet says about consumer travel behaviour in the coming year, because as you know, many consumers this year, many travellers have prioritised experiences and seeing family and friends overseas.

But there are emerging signs that we are coming to the end of this travel surge, and we're starting to see some travel fatigue seep in.

From the US, look out for Hewlett Packard Enterprise out with fourth-quarter earnings.

That's it for now. For more market-moving news, I'll be back on beat the streets at 1.30pm London time to give you a heads up to the US trading day. And Angela Barnes will be on at 7.30am on early morning calls, due the same ahead of the European trading session. Follow me on Twitter @AngelineOng. This is IGTV.