Look Ahead 5/09/23: RBA; BRC; China’s Caixin Services PMI
Currency moves are likely to be the focus on Tuesday with the release of the BRC retail sales figures, China Caixin services PMI and the Reserve Bank of Australia seen leaving rates unchanged. IG analyst Angeline Ong reports.
(Video Transcript)
UK inflation forecast to cool
Hello, I'm Angeline Ong, and welcome to your Look Ahead to Tuesday, 5 September 2023. First up, in the United Kingdom, we've got BRC Retail Sales. This is the monitor, the August expectation 0.3% year-on-year.
Of course, taking a look at the chart here, cable has been quite an interesting one to watch because it has been traversing higher, as you can see here. But it hit this level here, resistance point, at around 13,170 before heading lower.
I have to add that a lot of this is also down to the cooling or tapering inflation expectations. There are now forecasts that inflation in the UK is going to cool quite rapidly in the months ahead.
US's Fed may cut interest rates
Meanwhile, in terms of the US dollar picture, we've got expectations that the Federal Reserve Bank (Fed) is close to the end of this tightening cycle.
Then we turn to China, where we have the Caixin Services PMI expectations there in August at 54.
Australia is the big one to watch out for because we have the Reserve Bank of Australia (RBA) interest rate decision on deck. The cash rate is expected to stay at 4.1% and the expectation also that this will be unanimous amongst the members there.
Economists predict RBA won't change rates
The latest Reuters poll on RBA rates show that almost all economists agree on unchanged rates as inflation shows signs of easing. Australia has had very high inflation of late. According to anyone who lives there, they can tell you that food and drinks prices have been rising rapidly.
The majority of economists expect a final rate hike though next quarter. Now, back in the UK, we've got first quarter earnings from Ashtead as well, so we have a tiny bit of earnings there. However, we are at the end of the earnings season, awaiting the next part of the quarterly earnings season to start.
For more market-moving news, I'll be back on Beat the Street at 13:30 pm London time to give you a heads-up to the US trading day and IG's Jeremy Naylor will be on at 7:30 am on early morning call ahead of the European market open.
Follow me on IG.com and at Angeline Ong on Twitter. Until then, this is IGTV. Thanks for watching. I'm Jeremy Naylor. I'll see you next time.
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