A review of the week past and the week ahead
What mattered last week:
- The S&P500 closed 1.30% higher on good earnings data, progress on vaccine rollouts, and rising prospects that a larger than previously anticipated US stimulus package will be passed.
- Supported also by dovish comments from Fed Chair Powell reiterating that the goal remains full employment and that the US is a long way from that.
- Volatility, as measured by the VIX index closed lower at 20.0.
- U.S. 10-year yields rose 5bp to close near 1.215%.
- Gold closed slightly higher near $1824.00.
- Crude oil closed over 2% higher, near $59.47/bbl.
- The ASX200 fell 0.50% to close at 6806.7, as news of a new lockdown in Victoria weighed on sentiment.
- The AUD/USD rallied over 1% to close near .7760, supported by stronger risk sentiment and commodity prices.
For the week ahead, the key events are:
Australia: HIA new home sales (Monday), RBA meeting minutes (Tuesday), labour Force (Thursday), Markit flash PMI, and retail sales (Friday).
- Labour Force (Thursday): The market is looking for a 30k rise in employment in January with the unemployment rate edging down to 6.5%.
Earnings season continues with reports from companies including BHP, TWE GPT, and QBE.
New Zealand: Global dairy trade auction (Tuesday).
China: Chinese New Year holiday.
Japan: Q4 GDP (Monday), CPI (Friday),
- Q4 GDP (Monday): The market is looking for a 2.3% q/q rise.
Singapore: Balance of trade (Wednesday).
Korea: PPI (Friday).
U.S: Retail sales and industrial production (Wednesday), FOMC meeting minutes, housing starts, building permits, jobless claims (Thursday), Markit Flash PMIs, and existing home loans (Friday).
- Retail sales (Wednesday): Headline retail sales are expected to rebound by 0.9% helped by stronger gasoline station receipts coming from higher pump prices.
Euro Area: EA balance of trade, industrial production (Monday), EA employment (Tuesday), EA consumer confidence and Markit flash PMI and German Flash PMI (Friday).
UK: CPI (Wednesday), retail sales, and Markit flash PMI’s (Friday).
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