Look Ahead 15/9/23: China data; US consumer sentiment; oil outlook with Baker Hughes oil rig count

(Partial Video Transcript)

Can all the stimulus save China?

Hello, I'm Angeline Ong, and welcome to your Look Ahead to Friday, 15 September 2023. We start in China, where we have industrial production, data, retail sales and also the unemployment rate there. What will be key is to figure out whether these indicators show whether or not recent stimulus has started to revive the Chinese economy somewhat.

The central bank said it would cut the amount of cash that banks must hold as reserves for a second time this year to boost liquidity and get more momentum into the country's economy. However, it remains to be seen whether any of the past stimulus measures have done anything boost the post-pandemic lockdown effects and the recovery of China.

Many companies that have exposure to China have actually called out and said that more needs to be done as consumption there is also really weak. Just looking at the yuan versus the US dollar, particularly interesting too as we have got the Federal Reserve Bank (Fed) next week.

Critical US manufacturing, export and consumer data due

Speaking of the Fed, we do still have data points out of the US, including the New York Empire State Manufacturing Index, important export prices and the Michigan Consumer Sentiment Snapshot as well. A lot of the focus this week has been on the retail sales figures, which were stronger than expected.

And also another report out of the Labour Department showed that jobless claims data for the week ending 9 September with the number of Americans filing for employment benefits came in at 220,000. This was less than the estimated 225,000, so still suggesting a pretty robust US labor market there.

Looking at the US 500, which mirrors the S&P 500, because ahead of the Fed, we've seen some of the indices traverse slightly higher, including the Wall Street, which mirrors the Dow Industrials, and also the Tech 100. However, we are still looking out for a lot of data still to kind of give us some sense of whether the Fed is done with its interest rates hiking cycle.

There are many market-watchers out there, given the recent data that have shown that inflation, these inflation pressures haven't really gone away. Some of these market-watchers have said that perhaps the Fed can't afford to ease off on the interest rate hiking pedal just yet.

Oil: the most tradeable financial instruments

Now we've also got the Baker Hughes oil rig report. Oil has been one of the most tradeable financial instruments for our client, because it has seen so much volatility. Let's just show you the research and development (R&D) charts here as well, because that gives you a better sense of the kind of volatility I'm telling you about.

Recently we've had the Baker Hughes oil rig count, the recent ones, shown a drop. Of course, the ones out tomorrow, the data points will be pounced on, because there is this sense that supply is becoming rather tight, which has supported oil prices and kept it near 10-month highs.

Many strategists and also oil analysts have forecast tighter market balance and conditions for the rest of this year. All this is also key, because it does feed in as well to inflation and ultimately what central banks around the world do when it comes to their monetary policies, which then feeds on to currency markets as well.

And that's it for now. For more market-moving news, I'll be back on Beat the Street at 1.30pm London time to give you a heads-up to the US trading day. My colleague IG's Jeremy Naylor will be on at 7.30am on Early Morning Call ahead of the European market opening. Follow me on Twitter. I'm Angeline Ong and this is IGTV.