A review of the week past and the week ahead 8th of February

Market chart

What mattered last week:

  • The S&P500 rose 4.7% to a new record high on good earnings data as well as progress on vaccine rollouts and lowering infection rates.
  • As softer than expected jobs data in the US reinforced the need for more fiscal stimulus.
  • Volatility, as measured by the VIX index closed much lower at 20.9 from 33.1.
  • U.S. 10-year yields rose 10bp to close near 1.17%.
  • Gold fell -1.80% to close near $1814.00.
  • Crude oil closed almost 9% higher, near $56.85/bbl.
  • The ASX200 rallied 3.53% to close at 6840.50, following very dovish guidance from the RBA on rates and QE.
  • The AUD/USD closed modestly higher near .7677, supported by stronger risk sentiment which offset the dovish RBA.  

For the week ahead, the key events are:

Australia: NAB business confidence (Tuesday), HIA new home sales (Wednesday), Westpac consumer confidence (Thursday).

  • NAB business confidence (Tuesday): Is likely to show continuing strength in business conditions and a rebound in confidence after Sydney’s pre-Christmas Covid-19 cluster was contained and eliminated.

New Zealand: Business inflation expectations (Tuesday), business PMI (Friday).

China: CPI January (Wednesday).

  • CPI January (Wednesday): Is expected to fall into negative territory for the second time in three months falling by -0.2% YoY in January.

Japan: Current account (Monday), machine tool orders (Tuesday), PPI (Wednesday).

Singapore: Foreign exchange reserves (Monday).

Korea: Employment (Wednesday).  

U.S: CPI Jan (Wednesday), jobless claims (Thursday).

  • CPI January (Wednesday): Headline CPI inflation for January is expected to increase by 1.4% YoY, reflecting a rise in energy prices. Core CPI is expected to remain unchanged at 1.6%.

US earnings season continues with reports from companies including Cisco, PepsiCo, and Walt Disney.

Euro Area: German industrial production(Monday), German balance of trade and current account (Tuesday), EA industrial production (Friday).

UK: Balance of trade, industrial production, GDP Q4 and 3-month average (Friday).

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