Look ahead: UK retail sales and NatWest
NatWest earnings herald a series of reports from the UK banking sector, which spills out into next week. Reinsurance giant Swiss Re is also due to report earnings before the European markets start trading.
On the economic agenda is a retail sales release from the UK and producer prices later on in the day from the US.
(AI Video Summary)
UK January retail sales expected low
Jeremy Naylor starts off today's "Look ahead" by talking about upcoming events that traders should pay attention to. He mentions that retail sales in the UK are expected to be low in January due to high living costs and the slow month after the holidays. This could have a negative impact on retail companies. In the US, there will be releases of producer prices and the Michigan Consumer Sentiment Index later in the day.
He then moves on to discuss the GBP/USD trade, explaining that the UK is in a recession based on recent GDP data. The economy has been declining, which has led to a decrease in the value of the UK currency. However, there might be some potential for the sterling to go up if US retail sales are weaker than anticipated.
NatWest releases earnings
Next, the Naylor talks about NatWest, a major UK bank, releasing their earnings. This is important because it is the first major UK bank to do so, with other big banks following in the next week. He suggests that while there may be improvements in some areas of NatWest's business, it will be interesting to see how much money they have set aside for bad debts due to high interest rates. He also mentions the recent appointment of a new CEO for NatWest after some controversy involving Nigel Farage.
Lloyds Banking Group stock
Swiss Re's full-year numbers are briefly discussed in Switzerland. Then, Naylor moves on to talk about the stock situation of Lloyds Banking Group, noting that there has been a slight improvement in recent days. However, if NatWest's earnings report is negative, the stock may find support at 203.4 pence. On the other hand, if there is a positive surprise, the stock may drop below the 210 level, which will cause further speculation on its performance.
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