Look Ahead 12/10/23: US inflation; UK GDP; easyJet; Delta Airlines; Walgreens Boots Alliance

(Video Transcript)

GBP recovers after Middle East volatility

Hello, I'm Angeline Ong, and welcome to your Look Ahead to Thursday 12 October 2023. First up, we've got monthly gross domestic product (GDP) numbers out of the United Kingdom, industrial production data and trade balance numbers too.

Just taking a look at the euro versus sterling here, this cross has set a downward channel here since around 22 September.

The pound is holding steady in this session after recovering some stability after a lot of volatility that has been dominated this week by safe haven flows due to the violence that's been seen in the Middle East.

Investors ponder US interest rates and Euro Zone growth

However, we are seeing some form of stabilisation now. Sterling nudging three-week highs against the euro here, and the rally has been down in part to investors rethinking their expectations for US interest rates and also for the outlook for Euro Zone growth.

However, it must be said that we just had data out in terms of producer price indexes (PPIs) from the US, and it does look that at the moment those figures are indicating that inflation pressures are coming back. But it remains to be seen what that does to the expectations for US interest rates.

Speaking of the US, we've got consumer price index (CPI), very much watched and could perhaps give us a lot of volatility in the coming session. Initial jobless claims as well, and EIA crude oil inventories.

Just showing you the USD basket because we've been talking about that PPI number, which is a surprise on the upside. If we see CPI surprise on the upside as well, then it could potentially give the Federal Reserve (Fed) ammunition to keep rates higher for longer, and equity markets do not like that.

Airline earnings expected

Turning to trading, we've got several coming out of the airline industry. We've got easyJet and also Delta Airlines. Delta is out with third-quarter earnings. Delta Airlines and many other US airlines and some European ones have fallen recently.

Their shares have fallen because the initial thinking is that the unrest in the Middle East might mean higher oil prices, and that will mean higher oil costs for airlines.

Many of these airlines as well, it has to be said, including Delta, American and Sprint Airlines, JetBlue as well, have actually come out saying that they are very concerned about the developments there. Delta and American among those that have suspended flights to Israel.

Walgreens Boots Alliance out with Q4 earnings

And last but not least, we've got Walgreens Boots Alliance out with fourth-quarter earnings. As you may already know, Walgreens has appointed a new boss, Tim Wentworth, who was the founding chief executive of Cigna's health services organisation, Evernorth.

He also previously led Express Scripts. Just showing you Walgreens' shares, if I can get them up for you here, because it has had quite a tumultuous time, especially after the last CEO stepped down abruptly. As I mentioned earlier, new boss at Walgreens Beats Alliance, he also previously led Express Scripts, a US-based pharmacy benefits manager.

And that's it for now. For more market-moving news, I'll be back on Beat the Streets at 1.30pm London time to give you a heads-up to the US trading day. IG's Jeremy Naylor will be doing the same at 7.30am on Early Morning Call, which is ahead of the European market open. Follow me on Twitter at Angeline Ong. This is IGTV. Thanks for watching.