Indices consolidate after China trade data and the RBA decision

The Reserve Bank of Australia

The Reserve Bank of Australia hiked its cash target by 25 basis points to 4.35%, ending four months of steady policy. A move that was expected after inflation came in higher than forecast last quarter. Rates have now risen by 425 basis points since May last year. Wrapping up the meeting, the Reserve Bank of Australia (RBA) Governor Michele Bullock said recent data suggested there was a risk that inflation would remain higher for longer.

"Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks." Bullock's statement was taken as a step back from the October decision, which stated that some further tightening "may be required", leading markets to believe this might be the last hike of the cycle.

China's imports

China's imports unexpectedly grew in October while exports contracted at a quicker pace than forecast, which means that the trade surplus was much smaller than what analysts anticipated. Trade surplus narrowed to $56.53 billion in October from $77.7 billion in September. Expectations were for a surplus of $82 billion. Exports dropped 6.4% year-over-year (YoY). They were expected to fall 3.3%, up from a 6.2% drop a year ago. Imports rose 3.0%, dashing forecasts for a 4.8% contraction and snapping 11 straight months of declines.

British consumer spending

British consumer spending grew at the slowest pace in three months. Spending growth slowed to 2.5% in October from 2.7% in September. Sales growth was driven by food spending, which rose 7.9% year-on-year in the three months to the end of October. While non-food spending over the same period fell by 1%, According to British Consumer Consortium (BRC) chief executive Helen Dickinson, "many households are delaying their Christmas spending in the hopes they can grab a bargain in the upcoming Black Friday sales."

UK house prices

House prices rose more than expected in October, according to Halifax. The index rose by 1.1% from -0.3% in September, beating expectations of a 0.2% increase.

Associated British Foods

Associated British Food reports a 5% increase in annual profit and a 16% increase in group revenue. The group, whose shares have risen 34% so far this year, said earlier in September that profit growth in 2023/24 would be driven by a by a substantial improvement at its sugar business and a strong recovery in Primark's margin thanks to lower material and freight costs.

Persimmon

UK house builder Persimmon now expects to build 9,500 homes in 2023, above its August forecast of 9,000 units. In August, the British company flagged affordability concerns from higher mortgage rates but forecast annual profit in line with its expectations.

UBS Group

UBS Group posts a $785 million third-quarter loss, to be compared with the $444 million loss anticipated by analysts. The Swiss bank had to book $2.1 billion in expenses tied to the takeover of Credit Suisse. Excluding takeover-related impacts, UBS reported an underlying profit of $844 million.

Uber Technologies

Over in the US, Uber Technologies is forecast to publish earnings of 7 cents per share. This would compare to an 18-cent loss in the same quarter last year. Revenue is expected at $9.54 billion. Also due today are Occidental Petroleum, eBay, and Robinhood Markets.