By Geoffrey Smith
Investing.com — The dollar plunged and European currencies heaved a sigh of relief after signs that the missile that hit Polish territory on Tuesday was actually fired by Ukrainian air defense forces instead of Russia. However, crude oil prices quickly found another reason to be nervous about geopolitical risk. The US session is expected to be consumer driven, with October retail sales expected to outpace inflation and earnings results Goal (NYSE: ), TJX (NYSE: ) and Lowe’s (NYSE: ) should follow Tuesday’s impressive report from Walmart (NYSE: ). Stocks are listed as flat ahead of the open. Growth stock leader Nvidia (NASDAQ: ) will release its report after hours. And inflation is going from bad to worse in the UK. Here’s what you need to know in the financial markets on Wednesday, November 16.
1. Retail sales should exceed inflation; Can Target Match Walmart?
The US will release data for October, which is expected to top the monthly price increase for the first time in months.
Retail sales are expected to have risen 1.0% from September, compared with a rise of just 0.4% in If so, it would give hope to the Federal Reserve’s arguments that it can create a “soft landing” for the US economy over the next few months.
The overall figure is likely to be inflated by higher gasoline consumption, but prices are expected to have risen 0.4%, slightly more than the 0.3% in .
Retail business data is set to continue with reports from Target and TJX. Lowe’s has already released its results, which have exceeded expectations, both in terms of sales and profits.
2. Europe breathes a sigh of relief as signs indicate missile explosion in Poland was not fired by Russia
European currencies edged lower after reports downplayed the risk of NATO being drawn deeper into Russia’s war in Ukraine.
Polish President Andrzej Duda said it was “highly likely” that the missile that landed in southeastern Poland on Tuesday, killing two people, was fired by Ukraine’s air defense forces rather than by Russia. The missile was apparently one of several launches aimed at countering another devastating wave of attacks against Ukraine’s energy sector, which has caused power outages in cities across the country.
The incident had previously raised concerns that Russia hit Poland directly, risking triggering the activation of NATO’s mutual defense obligations by Poland and forcing a direct NATO response.
The Polish and Hungarian currencies rose sharply on the news, while they also appreciated against the dollar.
3. The warehouse must open flat; electric cars in the spotlight after Mercedes cut prices; Nvidia is expected
US stocks are set to open weak later after relatively muted producer price inflation data boosted hopes for a relatively quick end to rate hikes by the Federal Reserve.
Around 2:20 p.m., , and all were flat after rising 0.2% to 1.5% on Tuesday.
While the country’s dealer results will get attention, electric car makers will also get attention after Mercedes Benz ( ETR: ) said it would cut prices of its electric vehicles in China by 33%. ADRs Nio (NYSE: ) and Xpeng (NYSE: ) fell more than 2% in premarket trading, while Tesla (NASDAQ: ), which hit a two-year low last week under selling pressure from CEO Elon Musk, was steady.
After the bell, Nvidia and Cisco (NASDAQ: ) round out the day’s action.
4. Inflation hits 11% in the UK
Inflation may be falling in the US, but it is still high in Europe.
Britain’s CPI rose 11.1% year-on-year in October, helped by sharp increases in energy and food prices. And this despite the measures the government has taken to limit household energy bills. Prices rose 2.0% on .
The figures, which beat consensus forecasts, complicate the task for Chancellor of the Exchequer Jeremy Hunt, who is due to publish the government’s tax and spending plans on Thursday. They will now have to factor in another big rise in Britain’s inflation-linked debt service and may have to offer bigger pay rises to appease public sector workers whose incomes rose by just 2% over the past year to September.
Markets rose after Hunt indicated the government would not try to block further rate hikes by the Bank of England.
5. Oil swings on geopolitical volatility; EIA stocks are expected
Crude oil prices fluctuated sharply last night under the influence of geopolitical developments. After surging on Wednesday in response to news of a missile incident in Poland, they retreated early in the session as the risk of an escalation in Ukraine receded.
However, a drone attack on an Israeli-owned tanker off the coast of Oman, at the tip of the Arabian Peninsula, quickly restored the additional risk premium.
Around. At 2:35 p.m., prices rose 0.2% to $87.09 per barrel, while prices rose 0.2% to $94.09 a barrel. barrel.
Weekly US government data on crude oil and distillates is available at 4:30 p.m.