On the agenda this week: more earnings, especially from AI giant Nvidia, from around the world; wages data in Australia; continuing worries about inflation and central bank interest rate policies; and the final estimate for German 4th quarter and 2023 economic growth.
Globally, it's the release of early data from monthly surveys of economic activity across major economies (except China).
Australia not only sees the release of the December quarter’s Wage Price Index but also Average Weekly Earnings for the six months to November, after Tuesday’s release of the minutes of the Reserve Bank’s board meeting earlier this month - the first under the new system.
AMP Chief Economist, Shane Oliver, says the minutes are likely to confirm that the RBA has "dialed back its hawkishness but still retains a mild tightening bias."
On the data front, the December Wage Price Index on Wednesday "is likely to show wages growth of 0.9% from the three months to September, taking annual growth to 4.1%."
Average Weekly Earnings are likely to show a slightly higher increase in the data out on Thursday.
Dr. Oliver says the flash activity surveys due Thursday for the US, Japan, Europe, UK, and Australia are "likely to show that the global economy is continuing to grow at a subdued pace with the US and Japan on the stronger side and Europe and Australia on the softer side."
In the US, the minutes from the Fed’s last meeting (out Wednesday) "are likely to confirm that it’s dropped its tightening bias and now sees things as better balanced and sees rate cuts as likely this year but is not rushing into them."
On the data front, expect a further fall in the US leading index (Tuesday) and a rise in existing home sales (Thursday).
US and European earnings reports will continue to flow. Besides Nvidia, watch for reports from Walmart and Home Depot.
China's central bank left its key interest rate unchanged on Sunday when rolling over maturing medium-term loans nut made sure it boosted liquidity in the country’s financial system by around a billion yuan, or $US140 billion.
Economists had expected no change in the one year lending rate of 2.50%, even though plenty of economists think the economy could do with a hit.
But there was speculation that the Loan prime rate on five year loans might be cut tomorrow (Tuesday) to help property investors - it's the key rate for pricing mortgages.
The People's Bank of China (PBOC) said it was leaving unchanged the 2.50% rate on 500 billion yuan ($US69.51 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions.
Sunday's operation was meant to "maintain banking system liquidity reasonably ample," the central bank said in an online statement.
(Note that this decision was communicated a website statement whereas January 24’s relaxation of the bank reserve ratios was announced at a press conference in Beijing by the central banks governor.
Economists say that with 499 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 1 billion yuan fresh fund injection into the banking system.
Reuters said the central bank-backed Financial News, reported on Sunday citing market watchers that the benchmark loan prime rate (LPR) could fall in coming days, with five-year tenor more likely to be reduced.
"Lowering five-year LPR will help stabilise confidence, promote investment and consumption, and also help support the stable and healthy developments of the real estate market," the newspaper said on its official WeChat account soon after the MLF rate decision.
Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. The monthly fixing of the LPRs is due tomorrow.
