Look ahead: Chicago PMI & Baker Hughes rig count

(Video Transcript)

Happy New Year!

Let's take a look ahead to Friday 29 December 2023. Before we get going, I want to remind you that there's only a half-day's trading here in London and across much of Europe and also on Wall Street as well and in many other markets around the world as people wind down to what is another long weekend.

We will be back on Tuesday of course but Monday of course being the New Year celebrations following on from the turnover from 2023 to 2024 there is that long weekend to consider.

Taking a look ahead to what we've got on Friday 29 December 2023, and we begin with the Chicago purchasing managers index (PMI) data expectations for this to show expansion, and nothing above 50 is expanding, anything below 50 is contracting and this is a US number.

But if you look at this euro-dollar chart you can see, as we see a continuation of this rise in the euro against the US dollar, it's really all about what's happening with US interest rates and where US interest rates are headed more so than what's happening with the European Central Bank (ECB).

ECB keeps everyone guessing

The ECB, however, like the Bank of England (BoE) is widely expected to cut interest rates next year but at what pace and how many rate cuts? That's the big question.

At the moment, at least, money certainly seems to be going to the euro at the expense of the US dollar and if you continue to be long on this your stock goes underneath the underside of this rising line of support.

Outside of that we have the Baker Hughes rig count, our weekly look at what's happening. This will be an early release on Friday, I'm not sure of the exact time but it's normally 6pm UK time when we see that release but it could well be that it might well give us something.

Brent up for a third consecutive week

So that's the weekly chart there for Brent, it's up for the third week in a row. But if you look at what's happening on the daily chart mid-morning on Thursday 28 December and we've got the second day of declines.

Now the Baker Hughes rig count is an indication as to how many rigs are in operation in the Permian Basin. Those fracking rigs are easy to turn on, easy to turn off and we'll have to see how things are going. We have seen rigs added recently because of expectations of a rise in the price of oil.

There are a couple of things going on in the background, first of all there's concerns about the fact that there might not be enough supply on the market to supply the increase in demand that's expected.

On the other hand we are seeing stockpiles rise from the American Petroleum Institute, the EIA and so there is a lot of oil around in the market. We'll have to see how things move, but the Baker Hughes rig count could well be one of those things that will be in on Friday.

Now Friday morning, Angeline Ong willbe back at 9am with the mid-morning call and also beat the street as we look ahead to the start of Wall Street on Friday.

That's it from me, have a good evening and speak again soon. Have a good New Year as well over the weekend, if you're not back with us until Tuesday next week. Thanks for watching.