Market News & Analysis
What mattered last week and a preview of the week ahead
Tony Sycamore February 3, 2020 8:50 AM
What mattered last week:
- The benchmark U.S. stock market, the S&P 500 fell for a second week as the number of coronavirus cases increased.
- Prompting the World Health Organisation (WHO) to classify the outbreak a global health emergency.
- Individual countries were quick to implement stricter quarantine measures in excess of the WHO’s recommendations.
- All of which overshadowed good earnings reports from Microsoft, Apple, and Amazon.
- Safe-haven assets including bonds, gold the Japanese Yen and Bitcoin all had good weeks with Bitcoin up almost 9% for the week at the time of writing.
- In FX, a big unwind of the carry trade saw the EUR, a funding currency make strong gains against other currency’s including the NZD, CAD and AUD.
- Locally, the ASX200 fell by a modest 1% back to close back near 7000, while the AUDUSD fell almost 2% to .6690.
For the week ahead, the key events are:
Australia: Building approvals (Monday), RBA interest rate meeting (Tuesday), balance of trade and retail sales (Thursday), RBA Statement of Monetary Policy (Friday).
- RBA interest rate meeting (Tuesday): The RBA is expected to leave rates unchanged at 0.75%, supported by better than expected labour market prints. An easing bias is likely to be communicated along with updated forecasts in the quarterly SoMP on Friday.
New Zealand: Building approvals (Tuesday), Global dairy auction (Tuesday), employment (Thursday).
- Employment (Thursday): The unemployment rate is expected to remain unchanged at 4.2% in Q4, supported by a robust household sector.
China: Industrial profits, Caixin manufacturing PMI (Monday), Caixin services and composite PMI (Wednesday), balance of trade and foreign exchange reserves (Friday).
Japan: Leading economic index and Coincident index (Friday).
U.S.: ISM manufacturing PMI (Monday), factory orders (Tuesday), balance of trade, ISM non-manufacturing PMI (Wednesday), nonfarm payrolls (Friday).
- Nonfarm Payrolls (Friday): The U.S. economy is expected to add 150k jobs in January, with the unemployment rate remaining steady at 3.5% and hourly earnings increasing to 3% y/y.
December quarter earnings season continues with reports due this week from Alphabet (ex-Google), Walt Disney and General Motors.
Canada: Markit manufacturing PMI (Monday), balance of trade (Wednesday), employment (Friday).
Euro Area: EA retail sales (Wednesday), German factory orders (Thursday), German balance of trade and industrial production (Friday).
UK:Halifax house price index (Friday).
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