Category: Forex News, News

The ASX 200 and Corporate Earnings in Focus

FOMC Thomas Barkin reiterated his comments from Wednesday, calling for […]

FOMC Thomas Barkin reiterated his comments from Wednesday, calling for patience toward inflation and interest rate cuts.

However, corporate earnings contributed to gains across the US equity markets. Warner Music Group Corp. (WMG), Ralph Lauren Corp. (RL), and Thomson Reuters Co. (TRI) were among the big names to release earnings.

On Thursday, the Dow ended the day up 0.13%. The Nasdaq Composite Index and S&P 500 rose by 0.24% and 0.04%, respectively.

While the numbers set the tone, China, the RBA, and the Bank of Japan also needed consideration.

A continued lack of a meaningful fiscal stimulus package pressured the Hang Seng Index. Investors continued to take money off the table despite efforts to support the equity markets. Recent inflation numbers from China reflected a weakening demand environment.

The RBA and the Bank of Japan

However, RBA Governor Michele Bullock provided Australian consumers relief. The RBG Governor reportedly said the RBA could cut rates before inflation falls to within the 2-3% target range. This was a deviation from the Tuesday press conference when Governor Bullock said inflation would need to fall within range before the RBA would consider cutting rates.

On Friday, Bank of Japan Governor Kazuo Ueda said the BoJ would maintain an accommodative monetary policy after exiting negative rates. The comments aligned with Deputy Governor Shinichi Uchida who said the Bank would not rapidly hike interest rates after pivoting from negative rates. The less hawkish outlook weakened the Yen, driving demand for export stocks.

The Fed, Corporate Earnings, and China in Focus

On Monday, US corporate earnings and Fed commentary from Friday could set the tone. PepsiCo (PEP) was among the big names to release earnings on Friday. However, Fed speakers also drew interest before US inflation figures next week. Dallas Federal Reserve Bank President Lorie Logan said there was no pressing need to cut interest rates.

10-year US Treasury yields increased by 0.55% to end the session at 4.177%. The US equity markets responded to the earnings and Fed commentary. On Friday, the Nasdaq Composite Index and the S&P 500 gained 1.25% and 0.57%, respectively. However, the Dow ended the session down 0.14%.

While the US market moves from Friday will set the tone, the Asian earnings calendar also needs consideration.

ANZ Holdings and Beach Energy put the ASX 200 under the spotlight.

Beyond the earnings, central bank commentary needs consideration. There are no Asian economic indicators for the markets to consider on Monday. Hints of a meaningful stimulus package from Beijing could be a boon for the ASX 200.

On Monday, the Hong Kong markets are closed for the Chinese New Year, with the Japanese markets closed for National Day.

ASX 200


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