Look ahead 14/11/23: US inflation; Australia confidence; UK jobless; German ZEW; Vodafone; Home Depot

(Video Transcript)

AUD, NZD vulnerable to further losses

Hello, I'm Angeline Ong and welcome to IGTV and your look ahead to Tuesday, 14 November 2023. Now, forex is likely to be where the volatility lies. You've got consumer confidence figures out of Australia and the business confidence figures to boot.

I want to show you the Aussie versus the US dollar because this cross here, especially the Aussie dollar and the Kiwi, remains vulnerable to further losses. This is on speculation that US interest rates, no thanks to Federal Reserve (Fed) chair Jerome Powell last week, might have to rise a bit more before inflation is under control.

He certainly did not close the door to that possibility. All this means is it underpinned the dollar and tighter Australian policy failed to provide any assistance to the Aussie as well.

US, UK battle high inflation

In the UK, we've got unemployment figures expected, this is the unemployment rate expected to rise to 4.4% in September. The unemployment figure is being closely watched because, like the US, the UK is also fighting stubbornly high inflation.

Just looking at sterling for you here, because not only do we have that inflation outlook, we also have UK Prime Minister Rishi Sunak reshuffling his cabinet just hours ago, firing Interior Minister Suella Braverman, appointing former Prime Minister David Cameron as foreign minister.

Markets still digesting that, very little in the way of a reaction. Many analysts saying that the near-term prospects for sterling will be driven by economic data and of course, the outlook for the US dollar and that TPI figure that we're counting down to rather than politics.

Euro Zone GDP growth rate due

From the Euro Zone, look out for Q3 GDP growth rate figure. This is the second estimate, so perhaps we get a wildly different number. We could see some volatility for the euro against the US dollar.

We also have the ZEW out of Germany; expectations there for negative 76.7 for November.
And now the US, as I mentioned earlier, it's all about that inflation figure. If it comes in hot, then it could give the Fed further ammunition to raise interest rates and equities are not going to like that.

We've also got API crude oil inventories as well, which feeds into oil prices, especially on the supply side, and that also could change the inflation outlook.

UK earnings from Vodacom, Imperial Brand, Land Securities

From the UK, still a few earnings of note. We've got Vodafone's first half, Imperial Brands out with its full year and Land Securities out with first-half numbers. Land Securities might be one that is interesting, given we've seen so much news out of the commercial retail space, especially for offices with the likes of Meta and also WeWork.

Home Depot out of the US, just grabbing that chart for you, will be the one that we are looking out for. They are out with Q3 earnings, and of course, it's a big week for US retail. We've got Walmart, Gap, Target and, of course, the countdown to Thanksgiving.

Countdown to Thanksgiving begins

Home Depot's seen posting earnings of 3.76% a share, this is on expected sales of US$37.63, that's US$37.6 billion. Home Depot, like many of its peers, is going through difficult times, though.

Historically, home improvement stocks have been negatively impacted by interest rate hikes. At the same time, Home Depot, like many other retailers, have been faced with weakening consumer demand and higher input costs, and all this, not good news for margins.

Year-to-date, Home Depot's shares have lost around 8%, and over the last 12 months, the stock is up around 1% compared to a 16% rise for the S&P 500. So, we'll get all those news in the coming session.

For now, that's it. For more market-moving news, do check out my analysis on @AngelineOng on Twitter. Angela Barnes will be on at 7.30am on early morning call to give you a hint-up to the European market opening as well. That's it for now, this is IGTV.