UK retail sales dropped the most in three years

UK retail sales

UK retail sales fell much more than expected in December and at the fastest rate of contraction in nearly three years. The index fell 3.2% between November and December, reversing a 1.4% increase in the previous month. This was a much larger contraction than the 0.5% fall forecast by economists. Non-food store sales volumes fell by 3.9% in December, following a 2.7% increase in November.

Bank of Japan

In Japan, the latest inflation data published overnight could give the Bank of Japan (BOJ) a bit more time to phase out its monetary stimulus. The headline consumer price index rose 2.6% in December YoY, down from 2.8% in November. This is the slowest CP growth since July 2022. The core consumer price index (CPI), which excludes fresh food but includes energy costs, rose 2.3% in December from a year earlier, marking the slowest pace of increase since June 2022. It followed a 2.5% rise in November. Food prices continued to rise in December, albeit at a more moderated pace, which means that the so-called "core core" index, which takes away both fresh food and energy prices, rose 3.7% from a year earlier after a 3.8% gain in November, slowing for a fourth straight month.

It is likely that the Bank of Japan will maintain ultra-low interest rates at next week's meeting, but some analysts believe that steady rises in service prices and growing prospects of solid wage hikes will keep market expectations alive. The central bank will pull short-term interest rates out of negative territory around April.

Deliveroo

Deliveroo raises its 2023 earnings forecast. The British meal delivery company says its 2023 earnings will be "slightly" ahead of the £60–80 million it was previously expecting. Deliveroo said this morning's revenue rose 1% at constant currency. Gross transaction value rose 3% in the quarter, while the number of orders remained flat.

Yesterday, Deliveroo's competitor Just Eat Takeaway said it would close its in-house delivery service in Paris, a move that could impact around 100 jobs. As opposed to Uber and Deliveroo, which use self-employed couriers, Just Eat has championed employing its own couriers in Europe.

This has put the group at a competitive disadvantage in France as a result. In 2022, Just Eat abandoned in-house delivery operations in most of France. It now uses a third-party courier service, which uses self-employed couriers. Just Eat will now move to a similar model in the French capital.

SLB

SLB is due to report quarterly earnings before the start of today's US session. The market expects earnings per share (EPS) of 84 cents, to be compared with 71 cents a year ago, and revenue just short of $9 billion, $1 billion higher than Q4 last year.

WTI and Brent

WTI and Brent rose on Thursday for a second consecutive day, helped by the latest Environmental Impact Assessment (EIA) data. Crude stockpiles fell more than expected on strong refiner demand. ElA inventories showed a decline of 2.5 million barrels in crude oil stocks, while gasoline and distillate stockpiles rose, respectively, by 3.1 and 2.4 million barrels.