Take Five: Giddy up
As the year of fire horse dawns, much of Asia will celebrate the Lunar New Year. This rare combination is said to combine elements of energy and volatility.
The markets will be looking for the first from the consumer bellwether Walmart, while the commodity markets are likely to see the latter. The UK's data and leading economic indicators are coming in this week, and Indonesia is facing a crucial central bank decision.
Here is all the information you need to know for the upcoming week of financial?markets from Gregor Stuart Hunter, Lewis Krauskopf, in New York and?Amanda Cooper in London, Samuel Indyk, and Karin Strohecker.
Welcome to the Club
Walmart, which just hit $1 trillion in market capitalization, will release its quarterly results to provide a look at consumer spending after mixed economic indicators in the U.S.
Walmart's report Thursday follows recent data showing that December retail sales in the United States were flat. This could set consumer spending on a lower growth path going into 2026. However, a surprising strong employment report from January has eased concerns about an economic slowdown.
Walmart's report comes ahead of a slew of other retailer reports in the upcoming weeks, such as Home Depot, Lowe's, and Target. In the coming week, there will be a number of economic reports, including the advanced?reading for the fourth quarter GDP, the monthly consumer sentiment survey and the Personal Consumption Expenditures Price Index, which is a key measure of inflation.
Heavy Metals
The four largest European mining companies, Rio Tinto Glencore Anglo American Antofagasta, will report their earnings in the upcoming week. This is at a moment when many of the metals that they mine are reaching new highs.
Copper, gold, and silver, as well as other precious metals, have all recently reached records. However, the relentless rally that was seen in January has become more sporadic this month.
Metals are in high demand. Copper is needed for data centres, grid infrastructure and AI. Gold and silver have been pushed higher by the political unrest in the United States and concerns about the Federal Reserve's independence.
The four companies have seen their market values increase by over $65 billion in the past year, despite Glencore and Rio Tinto's abandoned merger. The group's earnings could determine whether this trend continues.
3/FLASH - AAH!
Many of the uncertainties that plagued businesses around the globe, from Europe to "Factory Asia", at this time last, have not gone away. But they are much more under control.
This is reflected in the global surveys of economic activity which, in January, showed an improvement in major economies.
The services sector is gaining momentum, as the price pressures continue easing. Manufacturing has a more negative impact. These surveys do not only tell investors what happened. The sub-indices for new orders, employment, and pricing give an indication of how businesses are preparing themselves for the months to come.
Investors may be more interested than usual in the February flash purchasing managers' survey. There are many questions about job security, company profits and future growth arising from the implementation of artificial intelligence.
Jobs, prices and a drowning street
The UK's labour market and inflation data will be a source of fresh information for the markets, despite the fact that investors are still digesting what has happened since the recent instabilities at the core of Keir Starmer’s government.
The Bank of England will be closely watching the labour market data due on Tuesday to see if the gradual cooling of wage increases has continued.
On?Wednesday, the focus will be on January's inflation figures. The reading was 3.4%, up from the peak of 11% in 2022. However, it is still the highest among the Group of Seven countries. Lower energy prices that will be in effect from April onwards should help bring inflation closer to BoE's target of 2%. However, much is due to one-off reasons.
Fitch will review its UK rating this Friday, as political turmoil creates a frenetic backdrop for sterling and gilts.
5/STERN WARNINGS
Investors will closely monitor Bank Indonesia's Thursday policy meeting after MSCI threatened to downgrade the country to a frontier market status, which would have resulted in an $80 billion loss - the worst financial collapse since the Asian Financial Crisis of 1998.
Moody's soon cut the country's rating outlook. Meanwhile, rival benchmark compiler FTSE announced that it would delay a scheduled review.
After cutting rates by 150 basis points in total between September 2024 to September 2025, the central bank may resume its easing cycle.
On Wednesday, the Reserve Bank of New Zealand (RBNZ) will announce its first monetary decision since Anna Breman, who joined the bank from Sweden's Riksbank, in December. Breman will likely hold rates but the growth is so strong that she may hike them as early as September.
(source: Reuters)