Take Five GRAPHIC: 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 leader Walmart, and the second from the earnings of European miners. The week will be filled with UK data and leading economic indicators. Indonesia is also facing a crucial central bank decision. Here is everything you need to 'know' about the upcoming week in financial markets from Gregor Stuart Hunter, based in Singapore, Lewis Krauskopf, based in New York and Amanda Cooper and Samuel Indyk, residing in London.
Welcome to the Club! After hitting $1 trillion market capitalization, Walmart will release quarterly results which offer a look at consumer spending after mixed signals in U.S. Economic data. Walmart's report, due on Thursday, comes after data revealed 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 many others in the next few weeks. These include reports from Home Depot, Lowe's, and Target. The economic reports that will be released in the coming week include an advance reading of the fourth-quarter GDP as well as a consumer sentiment survey and the Personal Consumption Expenditures Price Index, which is a key measure of inflation.
Heavy Metals
Rio Tinto's, Glencore's, Anglo American's and Antofagasta?s earnings will be reported in the next week. This is at a moment when the prices of some metals that they mine are reaching new highs. Copper, gold and silver, as well as other precious metals, have all recently reached new records. However, the relentless rally that was seen in January has become more sporadic.
Metals are in high demand. Copper is needed for data centres, and also the grid infrastructure required to power AI. Gold and silver have risen in value due to the political unrest in the United States, as well as concerns about the independence of Federal Reserve. This surge has seen four companies' value increase by over $65 billion in the past year despite the failed merger between Glencore & Rio Tinto. If this trend continues, it could be determined by the group's earnings.
3/FLASH - ?AAH! The uncertainty that was plaguing companies all over the world - from Europe to "Factory Asia" - this time last, has not gone away. But they are much more in 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 if artificial intelligence is implemented.
Jobs, prices and a drowning street
The UK's labour market and inflation data will be a source of fresh information for the markets. This is despite the fact that investors are still digesting recent instabilities at the core of the Prime Minister Keir-Starmer government. The Labour Market numbers, due on Tuesday, will reveal if the gradual cooling of wage increases - closely monitored by the Bank of England -- has continued. On Wednesday, the focus will shift to the January inflation data. The reading was?3,4% in December. This is down from the peak of 11% in 2012, but it's 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, a large part of the?slowdown is due one-off factors.
The markets will be sensitive when data changes occur, and Fitch's UK rating is scheduled to be reviewed on Friday.
Investors will closely monitor Bank Indonesia's Thursday policy meeting after MSCI threatened to downgrade the country last month. This would have led to a loss of $80 billion, the worst since the Asian Financial Crisis in 1998. Moody's soon cut the country's rating outlook. Meanwhile, FTSE, a rival benchmark compiler, announced that it would delay a scheduled review. After cutting interest rates 150 basis points in total between September 2024 to September 2025, the central bank may resume its easing cycle. The Reserve Bank of New Zealand is set to announce its first monetary decision on Wednesday since Anna Breman took over as Governor from Sweden's Riksbank. Breman will likely hold rates but the growth is so strong that she may hike them as early as September.
(source: Reuters)
