Early morning call: British Retail Consortium reports lacklustre Christmas sales

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APAC indices rise on positive US tech stocks

APAC indices rose of Tuesday, in the wake of a positive session in the US led by tech stocks such as NVIDIA, AMD, and Apple.

BRC reports lacklustre Christmas sales

The latest survey from the British Retail Consortium (BRC) shows lacklustre sales around Christmas. Like-for-like sales rose 1.9% in December, slowing from a 2.6% gain in November. December's figure was the lowest in five months. Helen Dickinson, BRC's CEO, said that, "The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending". In 2023, retail spending rose 3.6%, driven by an 8.1% rise in spending on food. Non-food spending fell 0.1%.

A separate survey from Barclays shows consumer spending on debit and credit cards rose 2.3% in December, slowing from 2.9% in November, supported by strong spending in pubs, bars and night clubs. Barclays chief economist, Jack Meaning, expects inflation to fall further in the opening months of 2024, putting more spending power in the pockets of UK consumers and should help support them to continue to spend, even against the tough backdrop of weak economic growth.

In Australia, retail sales rose at their fastest pace since November 2021. The index increased by 2% in November MoM, exceeding market estimates of 1.2% and shifting from a revised 0.4% fall in October flash data showed. Sales rebounded for most retail industries, boosted by Black Friday events.

Eurozone unemployment figures incoming

At 10 am, eurozone unemployment figures are out for November. The rate, which measures the number of people actively looking for a job in the Euro area as a percentage of the labour force, was at 6.5% in October and is forecast to stay the same. Signs of weakness in the labour market could relieve inflationary pressures in the bloc - and the data will be closely watched by the European Central Bank. The ECB said in September last year that it expects eurozone unemployment to rise to 6.7% in 2024, as sluggish growth prospects force employers to cut jobs.

US economic data incoming

Investors will be keeping across a raft of economic data from the US this week, starting with the US trade balance for November, due at 1.30pm this afternoon. Deficit is forecast to widen to $65 billion in November, from $64.3 billion the previous month. October was already the highest in three months.

But what traders are really waiting for is CPI, which is due on Thursday. It is forecast to come in at 0.2% MoM and 3.2% YoY for December, from 0.1% and 3.1% in November. Core CPI is expected to be 0.2% and 3.8%, from 0.3% and 4% respectively. an all-important indicator that should give more clues on what could be done next. Last week, stronger-than-expected job numbers somewhat dampened hopes for an early Fed rate cut. A majority of 64% still expect it to happen at the FOMC March meeting, but is it to be compared to 90% pre-NFP.

More issues for Boeing aircrafts

We're awaiting Boeing open this morning on the IG platform after more issues reported on its 737 Max 9s. On Monday, the stock fell 8% in its cash session the biggest one day drop since October 2022 after a section of the fuselage fell from an Alaska Airlines 737 Max 9 on Friday. Reports are coming in, overnight, from United Airlines, of bolts in need of "additional tightening" during inspections of Boeing 737 Max 9s. United Airlines said "installation issues" relating to door plugs would be "remedied" before the aircraft type would return to service.

Other reports have come in too from Alaska Airlines which says it too, has since found "some loose hardware" on some Max 9s. The door plug is a piece of fuselage with a window that can be used as an emergency exit in certain configurations. The Federal Aviation Administration (FAA), which regulates air travel in the US, has grounded 171 planes of the same type.

Oil prices fall following Saudi Arabia's price cuts

Oil prices fell yesterday on sharp price cuts by top exporter Saudi Arabia. There's also been a rise recorded in OPEC output, offsetting supply concerns generated by escalating geopolitical tension in the Middle East. Previously both Brent crude and WTI climbed more than 2% in the first week of the year on intensifying geopolitical risk in the Middle East after attacks by Yemeni Houthis on ships in the Red Sea. Rising supply and competition with rival producers prompted Saudi Arabia to cut the February official selling price of its main Arab Light crude to Asia to the lowest level in 27 months.