Look Ahead 19/9/23: RBA minutes; Canada CPI; Kingfisher; Ocado; TUI

(Video Transcript)

Volatile AUD/USD cross creates opportunities

Hello, I'm Angeline Ong, and welcome to your Look Ahead to Tuesday, 19 September 2023. We start in Australia, where we have the Reserve Bank of Australia (RBA) meeting minutes. Now, this Aussie dollar versus the US dollar, this cross, has been one that has given our clients a lot of opportunities in terms of volatility.

If you look at my chart here, that's a one-day chart, you can see how much volatility we've seen. Much of this is down to the inflation that we've seen recently, and also interest rates, both in Australia and New Zealand. Both those central banks were ahead of the game when it came to raising interest rates.

And, of course, not surprisingly, they are likely to be the first to start flagging that the end is nearing for a global campaign of tightening, offering some respite for the embattled currencies.

Canadians left the door open to rate hikes

Now, over to Canada, where we will also get consumer price index numbers. Canada, like Australia, has also suffered high inflation, and much of this has dissipated after interest rate hikes from Canada, but also it seems that the tide is changing, and we could see that the Canadians have now got to the peak of their tightening cycle.

However, they have left the door open to more hikes in case stubbornly high inflation starts rearing its head again. Oil inventories, now this feeds into the inflation space. Checking out West Texas Intermediate (WTI) and Brent for you, because we are looking out for the American Petroleum Institute (API) crude oil inventory report.

WTI, or otherwise known as US crude on our platform, climbed to its highest level in the year last week, since November 2022, if I widen the chart there to show you, if you can see on my chart or where my cursor is. And oil prices, of course, in focus because they went above $91 a barrel, extending a rally that has put a return to $100 a barrel sharply into focus.

Some analysts believe that crude oil prices could hit this milestone before the end of the year, and we then could perhaps see central banks trying to keep a lid on inflation again, because all this, of course, feeds into the wider economy.

Kingfisher, Ocado out with earnings

In terms of earnings, you've got Kingfisher out with first-half numbers, and Ocado has a third-quarter trading statement. Much of Ocado's focus will be not just on its trading, but also its partnerships and what it intends to do in the United States. It has had partnerships there recently.

ASOS, in terms of retail, will be the one to look out for, trading out with a trading statement tomorrow. And from Germany, the main one is TUI. With the numbers out from TUI, many investors will be looking out to see whether or not the wanderlust, the revenge travel trend is certainly coming to an end.

We had quite a few airlines this week saying they saw an easing in terms of numbers of people wanting to travel. TUI has seen, ahead of the summer, a huge wave of demand from consumers that were expected earlier in the year to actually not go on holiday because of the cost of living crisis.

Will wanderlust bubble burst soon?

But what has turned out is that many people put on their new clothes that they had bought and slapped on sunblock and headed out despite economic uncertainty, despite dwindling household savings. But how long this can continue on for remains to be seen, and we might find that out in the trading statement from TUI tomorrow.

And that's it for now. For more trading and 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. And IG's Angela Barnes will be on at 7.30am on Early Morning Call ahead of the European market open. Follow me @Angeline Ong on Twitter. This is IGTV.