Market News & Analysis


Top Story

What mattered last week and a preview of the week ahead

 

What mattered last week:

  • A negative week for the benchmark U.S. stock index the S&P 500 as the spread of Covid-19 in countries outside of China increased including Japan, South Korea, and Iran.
  • Despite China cutting interest rates and announcing new stimulus measures designed to offset the Covid-19 shutdown.
  • Apple warned it would miss revenue targets for the March quarter with other companies expected to soon follow suit as a result of Covid-19.
  • Japanese GDP for Q4 shrank by a larger than expected 6.3% annualized due to the impact of a sales tax rise and a devasting typhoon.
  • Chinese stimulus and flight to safety flows combined to send the price of key commodities gold, crude oil, and iron ore higher.
  • The Australian unemployment rate rose from 5.1% to 5.3% and heighten expectations of a an RBA rate cut in coming months.
  • Locally the ASX200 finished the week unchanged near 7140 as prospects of an RBA interest rate cut were offset by concerns over the impact of Covid-19.
  • In FX, the USDJPY experienced a five standard deviation rally, while the AUDUSD fell below .6600c for the first time since March 2009.

For the week ahead, the key events are:

Australia: Construction work (Wednesday), Capex Q4 (Thursday), private sector credit (Friday).

  • Capex Q4 (Thursday): The market is looking for a rise of 0.2% in Q4, however with the survey having been undertaken during the bushfires and onset of Covid-19, there are downside risks to this number. More importantly, we will get a first look for Capex plans for 2020–21.

December half earnings season continues with reports from companies including Rio Tinto, Woolworths, Flight Centre, and the A2 Milk Company.

New Zealand: Retail sales (Monday), balance of trade and ANZ business confidence (Thursday), ANZ Roy Morgan consumer confidence (Friday).

China: NBS manufacturing and non-manufacturing PMI’s (Saturday).

Japan: Unemployment, retail sales, industrial production (Friday).

U.S.: S&P Case -Shiller Home price index, CB Consumer confidence (Tuesday), new home sales (Wednesday), durable goods orders (Thursday), personal spending and income, Chicago PMI (Friday).

Canada: Wholesale sales (Monday), GDP Q4(Friday).

  • GDP Q4 (Friday): After a dovish shift from the BoC in January, Fridays GDP print will be a closely watched number. The expectation is for a sluggish print of +0.3% annualized, which will leave open the door for a rate cut from the BoC in April.

Euro Area: German IFO survey (Monday), EA economic sentiment index (Thursday), German employment, and inflation as well as EA flash inflation (Friday).

UK: Nationwide housing prices (Thursday), GFK Consumer confidence (Friday).

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.