The Fed keeps rates unchanged; the BOE next

The Federal Reserve

The Federal Reserve held interest rates steady at a 22-year high for a second straight meeting last night. This means that the Fed Funds Rate remains in a range of 5.25%–5.50% as the central bank waits to see how its aggressive credit tightening campaign filters through the US economy. However, it left the door open to a further increase in borrowing costs.

The policy statement acknowledged the U.S. economy's surprising strength but also took into account the tighter financial conditions faced by businesses and households. Powell told reporters "Inflation has been coming down, but it's still running well above our 2% target... A few months of good data are only the beginning of what it will take to build confidence."

The Bank of England

The GBP is in focus this Thursday as traders await the Bank of England interest rate decision at lunchtime. Bank of England (BOE) board members are widely expected to keep the policy rate unchanged at 5.25%. The market will, however, be attentive to the Monetary Policy Committee comments that will accompany the decision. Also expected is the BOE quarterly monetary policy report with forecasts for inflation and economic growth. Inflation is holding firm in the UK: 6.7% for the latest reading, roughly double that of the US (3.7%) and the eurozone (3.1%).

Australia's trade surplus

Australia's trade surplus declined to a 30-month low of A$6.8 billion in September, as shipments dropped by 1.4% from the previous month to A$45.6 billion. Meanwhile, imports jumped 7.5% to a record high of A$38.8 billion.

Shell

On the corporate front, Shell reports third-quarter earnings of $6.2 billion, in line with expectations. The company announced share buybacks of $3.5 billion over the next three months, up from $2.7 billion in the previous three months. BT Group maintains its annual outlook and posts a 3% rise in adjusted core profit to £2.06 billion. Sainsbury's forecast full-year profit is in the upper half of previous guidance as it reports flat profit for the first half.

Airbnb

Over in the US, Airbnb traded lower after the release of its Q3 earnings on Wednesday evening. Excluding a one-time income tax benefit, Airbnb posted adjusted earnings per share of $2.43, compared with the average analyst estimate of $2.10 per share. Airbnb's third-quarter revenue rose 18% to $3.4 billion from a year earlier, broadly in line with analysts estimates of $3.37 billion. But investors reacted to the group's forecasts for the current quarter. It sees Q4 revenue slightly below Wall Street estimates. Analysts predicted $2.18 billion to $2.13 billion.

PayPal

PayPal Holdings raised its finacial year (FY) profit forecast above Wall Street estimates, sending shares higher in after-hours trading. The group expects adjusted profit for the full year to be about $4.98 per share. Analysts, on average, had expected $4.92. This announcement came with the publication of Paypal's Q3 earnings: earning per share (EPS) came in at $1.30 per share, beating expectations of $1.23. PayPal's revenue jumped 9% to $7.4 billion.

Apple

Apple is set to release its report for the fourth quarter after the market closes tonight. Current market expectations are for Apple's Q4 revenue to decline marginally by 1% year-on-year to $89.31 billion versus $90.1 billion a year ago. On the other hand, EPS is expected to be at US$1.39, up 7.7% year-on-year and 10.3% from the previous quarter. Investors will be looking closely at the performance of products and services.

Apple's hardware product sales

Apple's hardware product sales may continue to struggle because of Apple's exposure to China, a market that accounts for one fifth of the group's revenue. A report from Counterpoint Research suggests that iPhone 15 sales for the first 17 days of sales in China have underperformed last year's iPhone 14, by an estimated The street therefore expects Apple's services segment to offset a possible fall in product sales. It sees service revenue continuing to accelerate to 11.4% year-on-year in Q3 2023, up from the previous quarter's 8.2%.

Earnings report

More companies are due to report earnings today. To name a few: Coinbase Global, Moderna, Eli Lilly, Starbucks, and ConocoPhillips