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The Federal Open Market Committee (FOMC) minutes, due to be published later today, will be scrutinized for hints as to when cuts may come. However, rates are not the only issue economists consider as the US government could start a partial shutdown unless a budget or spending stopgap is passed by March 1st.
The upcoming Nvidia Q4 2023 earnings report draws investors and traders’ attention as the US company has surpassed Alphabet (Google) and Amazon in terms of market cap, getting the 4th place globally right after Microsoft, Apple and Saudi Aramco.
Analysts To Scrutinise FOMC Minutes
A strong majority of 86 of 104 economists in a Reuters poll said the Federal Reserve (Fed) would first cut the Fed funds rate in the second quarter of 2024.
According to the CME FedWatch Tool, the likelihood of a Fed cut has decreased to 8.5% and 30.7% for March and May, respectively. The US Dollar Index (DXY) remains under pressure as economists do not forecast a Federal Reserve rate cut coming soon.
Nvidia Q4 2023 Earnings Report
In other news, market analysts will be focusing on the upcoming Nvidia Q4 2023 earnings report. The US chipmaker’s share value has gone up by almost 40% this year with experts expecting the report to show January quarter revenue of $20.4 billion, meaning a 240% rise on an annualised basis, with adjusted earnings per share of $4.59. However, some analysts suggest that such jumps wouldn’t be sustainable in the next months.
New Zealand Retail Sales Q4 2023
Statistics New Zealand will publish its 2023 fourth quarter retail sales report on Thursday. Economists expect that retail sales remained flat as last year ended. Changes in retail sales are widely followed as an indicator of consumer spending.
At the end of January, a report by Statistics NZ showed the Consumer Price Index (CPI) easing further in the fourth quarter of 2023, coming in at 0.5% on a quarterly basis, in-line with analysts’ forecasts and dropping further from the previous quarter’s 1.8%.
BoE Policymakers Debate Rate Policy
The BoE’s head Andrew Bailey told members of the parliament that he is comfortable with investors suggesting interest rate cuts in 2024. In his remarks before the Treasury Committee, Bailey noted that “I am comfortable with a profile that has cuts in it, but that is not to say when or how much. We do not endorse the market curve. We are not making a prediction of when or by how much (we will cut rates). But it’s not unreasonable for the market to think that.”
The BoE’s deputy governor, Ben Broadbent, said that he doesn’t agree that all the evidence points in the direction of rate cuts, stressing that wage growth, services inflation are twice the rate consistent with sustainable inflation. Broadbent suggested that wage growth could edge down further in the coming months.
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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.
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