Tuesday preview: Fed's Powell, BP in the spotlight
By Alexander Bueso
Date: Monday 06 Feb 2023
(Sharecast News) - The market spotlight on Tuesday was expected to be firmly on an interview of Federal Reserve chairman, Jerome Powell, and what insights he might provide on the future path of monetary policy, especially following the surge in non-farm payrolls reported just four days before.
As of Monday afternoon, Fed funds futures were discounting two more 25 basis point interest rate hikes by the Federal Open Market Committee at the 21-22 March and 2-3 May policy meetings.
That would take the target range for the Fed funds rate to 5.0-5.25%, a level consistent with most policymakers' recent remarks and speeches.
Furthermore, a first rate cut was now only anticipated by Fed funds futures in December.
On home shores, at 0700 GMT mortgage lander Halifax would publish its closely followed house price index for January.
In parallel, Germany's Federal Office of Statistics was to publish figures for industrial production covering the month of December.
Overnight, in Japan, data for nominal and real wage growth in December were due out, alongside a reading on household spending during that same month.
Down Under, rate-setters in Sydney were expected to announce a 25bp hike in the central bank's cash rate to 3.35%.
Chinese foreign reserves figures for January were also scheduled for release.
In the corporate space, all eyes would be on BP's full-year results with media coverage likely to focus on the amount of taxes paid and its recent decision to slow push towards clean energy.
Nonetheless, according to Michael Hewson, chief market analyst at CMC Markets UK,: "Whatever politicians say you can't change the political reality that the energy backdrop has changed with the recent surge in energy prices.
"With energy security and high prices now front of mind for ordinary people, the only way to reduce prices is to add extra capacity, which means new LNG resources will be needed.
"Returns from renewables are well below those of gas, and also aren't reliable enough."
Hewson did however judge the amount of capital spending across the year - of $447m - to be "quite frankly pitiful".
Tuesday 07 February
FINALS
Kosmos Energy (DI), React Group, BP
INTERIMS
Genus, Mattioli Woods, Feedback, Alumasc Group
Q4
BP
TRADING ANNOUNCEMENTS
SSE, Syncona Limited NPV
AGMs
Ten Lifestyle Group, Blackrock Frontiers Investment Trust, Numis Corporation
UK ECONOMIC ANNOUNCEMENTS
Halifax House Price Index (07:00)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Industrial Production (GER) (07:00)
Balance of Trade (US) (13:30)
Consumer Credit (US) (20:00)
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