While recent data has shown core inflation moderating, core PCE is on track to average below target at just 1.6% annualised over the past three months.Federal Reserve Chair Jerome Powell made clear that concerns about future inflation, especially from tariffs, remain top of mind.“If you just look backwards at the data, that’s what you would say… but we have to be forward-looking,” Powell said. “We expect a meaningful amount of inflation to arrive in the coming months, and we have to take that into account.”While the economy remains strong enough to buy time, policymakers are closely monitoring how tariff-related costs evolve before shifting policy. Powell also stated that without these forward-looking risks, rates would likely already be closer to the neutral rate, which is a full 100 basis points from current levels.
2. The Unemployment Rate anchor
Powell repeatedly cited the 4.2% unemployment rate during the press conference, mentioning it six times as the primary reason for keeping rates in restrictive territory. At this level, employment is ahead of the neutral rate.“The U.S. economy is in solid shape… job creation is at a healthy level,” Powell added that real wages are rising and participation remains relatively strong. He did, however, acknowledge that uncertainty around tariffs remains a constraint on future employment intentions.If not for a decline in labour force participation in May, the unemployment rate would already be closer to 4.6%. Couple this with the continuing jobless claims ticking up and hiring rates subdued, risks are building around labour market softening.
3. Autumn Meetings are Live
While avoiding firm forward guidance, Powell hinted at a timeline:“It could come quickly. It could not come quickly… We feel like the right thing to do is to be where we are… and just learn more.”This suggests the Fed will remain on hold through the July meeting, using the summer to assess incoming data, particularly whether tariffs meaningfully push inflation higher. If those effects prove limited and unemployment begins to rise, the stage could be set for a rate cut in September.
By
Evan Lucas
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February opens with a policy-heavy tone led by Australia’s RBA decision, while Japan provides the core macro anchors through GDP and inflation updates. In contrast, China’s calendar lightens due to the Spring Festival, shifting attention to liquidity and policy headlines. Across the region, a firmer USD and softer metals continue to frame cross-asset performance, especially for commodity-linked currencies.
Australia: RBA
Australia begins February with a policy-driven focus as the Reserve Bank of Australia (RBA) delivers its monetary policy decision, setting the month’s initial tone for rates, currency, and equities. While markets had priced around a 70% chance of a hike as of 30 January, expectations remain highly sensitive to evolving data and RBA commentary.
Key dates
RBA Monetary Policy Decision: 2:30 pm, 3 February (AEDT)
Wage Price Index (WPI): 11:30 am, 18 February (AEDT)
Labour Force: 11:30 am, 19 February (AEDT)
What markets look for
Aussie traders will gauge whether the RBA reinforces a data‑dependent stance or shifts more decisively toward tightening.
Wage and labour data will be central in testing inflation persistence, while the next CPI reading anchors positioning heading into March. A balanced or mildly hawkish tone could keep short‑term yields elevated and limit downside in the AUD.
Market sensitivities
AUD and ASX performance will primarily reflect the RBA’s policy tone and broader USD momentum, while resource‑linked sectors should continue to track metals and bulk commodity trends.
The February earnings season, highlighted by CBA and CSL (11 Feb), BHP (17 Feb), and Rio Tinto (19 Feb), is also set to reintroduce stock‑specific drivers once the initial policy focus fades.
Australia’s February Consumer Price Index (CPI) release will be a key post‑RBA event, offering the clearest read on whether domestic inflation pressures are easing in line with the central bank’s expectations.
The data following the RBA’s February policy decision and could quickly reset rate path probabilities reflected in ASX futures pricing.
Key dates
Consumer Price Index (CPI): 11:30 am, 25 February (AEDT)
What markets look for
Markets will focus on whether trimmed‑mean and services inflation components show further moderation.
Persistent strength in non‑tradables or wage‑related sectors could reinforce expectations for additional tightening later in Q1, while a softer headline would support the view that policy rates have peaked.
Market sensitivities
A stronger‑than‑expected CPI print would likely lift front‑end yields and support the AUD, while a downside surprise could weigh on the currency and flatten the yield curve.
Equity sentiment may diverge and financials could find relief from a pause bias, whereas rate‑sensitive sectors like real estate and consumer discretionary would benefit most from a cooler inflation read.
Japan’s Q4 GDP release will be a key reference point for how firmly the recovery is progressing after recent quarters of uneven growth momentum. Arriving ahead of the Tokyo CPI print, it helps shape expectations for domestic demand, external trade performance, and how much scope policymakers have to adjust their stance without derailing activity.
Key dates
Q4 GDP: 11:50 pm, 15 February (GMT)/ 10:50 am, 16 February (AEDT)
What markets look for
Investors pay close attention to the balance between consumption, business investment, and net exports to judge whether growth is broad‑based or narrowly supported.
A stronger‑than‑expected print tends to reinforce confidence in Japan’s expansion story, while a weaker outcome can revive concerns about stagnation and delay expectations for any meaningful policy shift.
Japan: Tokyo CPI
Tokyo’s latest inflation reading shows headline CPI easing to 1.5% year‑on‑year in January from 2.0% in December 2025, dipping further below the recent peaks seen during the post‑pandemic upswing.
The CPI release offers one of the timeliest reads on Japan’s inflation pulse and is closely watched as a lead indicator for nationwide price trends.
Coming late in the month, it serves as a check on whether the recent inflation upswing is sustaining at levels consistent with policymakers’ many objectives.
Tokyo CPI: 11:30 pm, 26 February (GMT)/ 10:30 am, 27 February (AEDT)
What markets look for
Attention centres on core measures that strip out volatile components, alongside services prices, to see whether underlying inflation is holding near target or drifting lower.
A firmer profile strengthens the case that Japan is exiting its low‑inflation regime, while softer readings suggest that price pressures remain fragile and dependent on external factors.
Market sensitivities
A hotter‑than‑expected Tokyo CPI print can push Japanese yields higher and lend support to the yen, often translating into pressure on exporter‑heavy equity names.
Conversely, a softer outcome tends to ease yield pressures, weaken the yen, and provide some relief to equity sectors that benefit from a more accommodative policy backdrop.
China’s February macro calendar is structurally lighter due to Spring Festival timing.
The National Bureau of Statistics of China notes that some releases are adjusted around Spring Festival timing, with the February PMI scheduled for early March leaving markets without major domestic data anchors for much of the month.
Key dates
Spring Festival: 17 February to 3 March
What markets look for
Markets turn their focus to policy signals out of Beijing — think targeted stimulus or liquidity injections, as well as shifts in funding conditions and flows responding to global risk sentiment or USD moves.
Trade and tariff rhetoric, or surprise consumption measures like expanded trade-in subsidies and festive spending incentives recently flagged by the Ministry of Commerce, often spark sharper reactions than the usual data releases.
Market sensitivities
CNH and CNY pairs turn more reactive to USD flows and external headlines, often amplifying volatility in regional equities, commodity currencies like AUD, and China-exposed EM assets.
Holiday-thinned liquidity elevates headline risk, particularly in materials (iron ore, copper), tech hardware supply chains, and regional financials, where policy surprises or US tariff updates can trigger 1–2% daily index swings.
Expected earnings date: Wednesday, 4 February 2026 (US, after market close) / ~8:00 am, Thursday, 5 February 2026 (AEDT)
Alphabet’s earnings provide insight into global digital advertising demand, enterprise cloud spending, and broader technology-sector investment trends.
As Google Search and YouTube are widely used by both consumers and businesses, results are often used as one input when assessing online activity and corporate marketing budgets, alongside other indicators.
Key areas in focus
Search
Search advertising remains Alphabet’s largest revenue driver. Markets are likely to focus on ad growth rates, pricing metrics such as cost-per-click, and overall advertiser demand across sectors such as retail, travel, and small-to-medium businesses.
YouTube
YouTube contributes to both advertising and subscription revenue. Markets commonly monitor advertising momentum, engagement trends, and monetisation developments as indicators of digital media conditions and brand spending.
Google Cloud
Sustained Cloud profitability is often discussed as a factor that may influence longer-term earnings expectations, though outcomes remain uncertain. Markets are expected to focus on revenue growth, enterprise adoption trends, and operating margins.
Other bets
Initiatives such as autonomous driving and life sciences, while typically smaller contributors to revenue, markets may still watch spending levels and progress updates as indicators of capital allocation and cost discipline.
Cost and margin framework
Management has previously flagged elevated capex tied to AI infrastructure, including data centres, specialised chips, and computing capacity. Traffic acquisition costs, staffing levels, and infrastructure expansion are also key variables influencing profitability.
What happened last quarter
Alphabet’s most recent quarterly update highlighted advertising trends, Cloud profitability, and continued increases in capex to support AI initiatives.
Management commentary has indicated that infrastructure spending is intended to support long-term competitiveness, while the market continues to assess the near-term margin trade-offs.
Last earnings key highlights
For reported figures and segment detail from the most recent quarter, refer to Alphabet’s latest earnings release materials, including revenue, earnings per share (EPS), Services mix, Cloud operating income, and capex commentary.
Bloomberg consensus estimates moderate year-on-year (YoY) revenue growth and higher EPS versus the prior-year quarter, with ongoing focus on operating margins given AI-related investment.
Bloomberg consensus reference points:
EPS: low-to-mid US$2 range
Revenue: high US$80 billion to low US$90 billion range
Capex: expected to remain elevated
*All above points observed as of 31 January 2026.
Market-implied expectations
Listed options implied an indicative expected move of around ±4% to ±6% over the relevant near-dated expiry window. Movements derived from option prices observed at 11:00 am AEDT, 2 February 2026.
These are market-implied estimates and may change. Actual post-earnings price moves can be larger or smaller.
What this means for Australian market participants
Alphabet’s earnings can influence near-term sentiment across major US equity indices, particularly Nasdaq-linked products, with potential spillover into the Asia session following the release.
Important risk note
Immediately after the US close and into the early Asia session, Nasdaq 100 (NDX) futures and related CFD pricing can reflect thinner liquidity, wider spreads, and sharper repricing around new information.
Such an environment can increase gap risk and execution uncertainty relative to regular-hours conditions.
Global markets enter a catalyst-dense week where multiple central bank decisions, ongoing US earnings, and the Reserve Bank of Australia (RBA) rate decision may help shape near-term direction.
RBA rate decision: Market pricing currently implies a higher probability of a Target Cash Rate increase.
Global central banks: The European Central Bank (ECB) and Bank of England (BoE) both communicate within the same week, creating the potential for policy cross-currents.
US earnings: The earnings cycle continues with Alphabet and Amazon reporting this week.
Gold: Trading near elevated levels amid macro uncertainty and shifting rate expectations.
RBA rate decision
RBA decision Tuesday, 3 February, 2:30 pm (AEDT)
RBA media conference: Tuesday, 3 February, 3:30 pm (AEDT)
A 67% likelihood of a rate rise is suggested on the RBA rate-tracker within the futures pricing framework, indicating a market-implied probability of a move.
Market impact
AUD pairs may respond quickly to any repricing of the rate path.
Rate-sensitive equity sectors could see rotation.
Government bond yields may adjust if expectations shift.
Gold has traded near elevated levels amid macro uncertainty and shifting rate expectations. For many traders, strength in gold is sometimes associated with defensive positioning, though gold prices can be volatile and can fall.
The US dollar, Treasury yield movements and geopolitical narrative often influence short-term direction.
Market impact
Continued strength may suggest some investors are leaning toward defensive positioning.
USD and sovereign yield movements often influence short-term direction.
After a strong advance, periods of consolidation or profit-taking are common.
February opens with a policy-heavy tone led by Australia’s RBA decision, while Japan provides the core macro anchors through GDP and inflation updates. In contrast, China’s calendar lightens due to the Spring Festival, shifting attention to liquidity and policy headlines. Across the region, a firmer USD and softer metals continue to frame cross-asset performance, especially for commodity-linked currencies.
Australia: RBA
Australia begins February with a policy-driven focus as the Reserve Bank of Australia (RBA) delivers its monetary policy decision, setting the month’s initial tone for rates, currency, and equities. While markets had priced around a 70% chance of a hike as of 30 January, expectations remain highly sensitive to evolving data and RBA commentary.
Key dates
RBA Monetary Policy Decision: 2:30 pm, 3 February (AEDT)
Wage Price Index (WPI): 11:30 am, 18 February (AEDT)
Labour Force: 11:30 am, 19 February (AEDT)
What markets look for
Aussie traders will gauge whether the RBA reinforces a data‑dependent stance or shifts more decisively toward tightening.
Wage and labour data will be central in testing inflation persistence, while the next CPI reading anchors positioning heading into March. A balanced or mildly hawkish tone could keep short‑term yields elevated and limit downside in the AUD.
Market sensitivities
AUD and ASX performance will primarily reflect the RBA’s policy tone and broader USD momentum, while resource‑linked sectors should continue to track metals and bulk commodity trends.
The February earnings season, highlighted by CBA and CSL (11 Feb), BHP (17 Feb), and Rio Tinto (19 Feb), is also set to reintroduce stock‑specific drivers once the initial policy focus fades.
Australia’s February Consumer Price Index (CPI) release will be a key post‑RBA event, offering the clearest read on whether domestic inflation pressures are easing in line with the central bank’s expectations.
The data following the RBA’s February policy decision and could quickly reset rate path probabilities reflected in ASX futures pricing.
Key dates
Consumer Price Index (CPI): 11:30 am, 25 February (AEDT)
What markets look for
Markets will focus on whether trimmed‑mean and services inflation components show further moderation.
Persistent strength in non‑tradables or wage‑related sectors could reinforce expectations for additional tightening later in Q1, while a softer headline would support the view that policy rates have peaked.
Market sensitivities
A stronger‑than‑expected CPI print would likely lift front‑end yields and support the AUD, while a downside surprise could weigh on the currency and flatten the yield curve.
Equity sentiment may diverge and financials could find relief from a pause bias, whereas rate‑sensitive sectors like real estate and consumer discretionary would benefit most from a cooler inflation read.
Japan’s Q4 GDP release will be a key reference point for how firmly the recovery is progressing after recent quarters of uneven growth momentum. Arriving ahead of the Tokyo CPI print, it helps shape expectations for domestic demand, external trade performance, and how much scope policymakers have to adjust their stance without derailing activity.
Key dates
Q4 GDP: 11:50 pm, 15 February (GMT)/ 10:50 am, 16 February (AEDT)
What markets look for
Investors pay close attention to the balance between consumption, business investment, and net exports to judge whether growth is broad‑based or narrowly supported.
A stronger‑than‑expected print tends to reinforce confidence in Japan’s expansion story, while a weaker outcome can revive concerns about stagnation and delay expectations for any meaningful policy shift.
Japan: Tokyo CPI
Tokyo’s latest inflation reading shows headline CPI easing to 1.5% year‑on‑year in January from 2.0% in December 2025, dipping further below the recent peaks seen during the post‑pandemic upswing.
The CPI release offers one of the timeliest reads on Japan’s inflation pulse and is closely watched as a lead indicator for nationwide price trends.
Coming late in the month, it serves as a check on whether the recent inflation upswing is sustaining at levels consistent with policymakers’ many objectives.
Tokyo CPI: 11:30 pm, 26 February (GMT)/ 10:30 am, 27 February (AEDT)
What markets look for
Attention centres on core measures that strip out volatile components, alongside services prices, to see whether underlying inflation is holding near target or drifting lower.
A firmer profile strengthens the case that Japan is exiting its low‑inflation regime, while softer readings suggest that price pressures remain fragile and dependent on external factors.
Market sensitivities
A hotter‑than‑expected Tokyo CPI print can push Japanese yields higher and lend support to the yen, often translating into pressure on exporter‑heavy equity names.
Conversely, a softer outcome tends to ease yield pressures, weaken the yen, and provide some relief to equity sectors that benefit from a more accommodative policy backdrop.
China’s February macro calendar is structurally lighter due to Spring Festival timing.
The National Bureau of Statistics of China notes that some releases are adjusted around Spring Festival timing, with the February PMI scheduled for early March leaving markets without major domestic data anchors for much of the month.
Key dates
Spring Festival: 17 February to 3 March
What markets look for
Markets turn their focus to policy signals out of Beijing — think targeted stimulus or liquidity injections, as well as shifts in funding conditions and flows responding to global risk sentiment or USD moves.
Trade and tariff rhetoric, or surprise consumption measures like expanded trade-in subsidies and festive spending incentives recently flagged by the Ministry of Commerce, often spark sharper reactions than the usual data releases.
Market sensitivities
CNH and CNY pairs turn more reactive to USD flows and external headlines, often amplifying volatility in regional equities, commodity currencies like AUD, and China-exposed EM assets.
Holiday-thinned liquidity elevates headline risk, particularly in materials (iron ore, copper), tech hardware supply chains, and regional financials, where policy surprises or US tariff updates can trigger 1–2% daily index swings.
Expected earnings date: Wednesday, 4 February 2026 (US, after market close) / ~8:00 am, Thursday, 5 February 2026 (AEDT)
Alphabet’s earnings provide insight into global digital advertising demand, enterprise cloud spending, and broader technology-sector investment trends.
As Google Search and YouTube are widely used by both consumers and businesses, results are often used as one input when assessing online activity and corporate marketing budgets, alongside other indicators.
Key areas in focus
Search
Search advertising remains Alphabet’s largest revenue driver. Markets are likely to focus on ad growth rates, pricing metrics such as cost-per-click, and overall advertiser demand across sectors such as retail, travel, and small-to-medium businesses.
YouTube
YouTube contributes to both advertising and subscription revenue. Markets commonly monitor advertising momentum, engagement trends, and monetisation developments as indicators of digital media conditions and brand spending.
Google Cloud
Sustained Cloud profitability is often discussed as a factor that may influence longer-term earnings expectations, though outcomes remain uncertain. Markets are expected to focus on revenue growth, enterprise adoption trends, and operating margins.
Other bets
Initiatives such as autonomous driving and life sciences, while typically smaller contributors to revenue, markets may still watch spending levels and progress updates as indicators of capital allocation and cost discipline.
Cost and margin framework
Management has previously flagged elevated capex tied to AI infrastructure, including data centres, specialised chips, and computing capacity. Traffic acquisition costs, staffing levels, and infrastructure expansion are also key variables influencing profitability.
What happened last quarter
Alphabet’s most recent quarterly update highlighted advertising trends, Cloud profitability, and continued increases in capex to support AI initiatives.
Management commentary has indicated that infrastructure spending is intended to support long-term competitiveness, while the market continues to assess the near-term margin trade-offs.
Last earnings key highlights
For reported figures and segment detail from the most recent quarter, refer to Alphabet’s latest earnings release materials, including revenue, earnings per share (EPS), Services mix, Cloud operating income, and capex commentary.
Bloomberg consensus estimates moderate year-on-year (YoY) revenue growth and higher EPS versus the prior-year quarter, with ongoing focus on operating margins given AI-related investment.
Bloomberg consensus reference points:
EPS: low-to-mid US$2 range
Revenue: high US$80 billion to low US$90 billion range
Capex: expected to remain elevated
*All above points observed as of 31 January 2026.
Market-implied expectations
Listed options implied an indicative expected move of around ±4% to ±6% over the relevant near-dated expiry window. Movements derived from option prices observed at 11:00 am AEDT, 2 February 2026.
These are market-implied estimates and may change. Actual post-earnings price moves can be larger or smaller.
What this means for Australian market participants
Alphabet’s earnings can influence near-term sentiment across major US equity indices, particularly Nasdaq-linked products, with potential spillover into the Asia session following the release.
Important risk note
Immediately after the US close and into the early Asia session, Nasdaq 100 (NDX) futures and related CFD pricing can reflect thinner liquidity, wider spreads, and sharper repricing around new information.
Such an environment can increase gap risk and execution uncertainty relative to regular-hours conditions.
Global markets enter a catalyst-dense week where multiple central bank decisions, ongoing US earnings, and the Reserve Bank of Australia (RBA) rate decision may help shape near-term direction.
RBA rate decision: Market pricing currently implies a higher probability of a Target Cash Rate increase.
Global central banks: The European Central Bank (ECB) and Bank of England (BoE) both communicate within the same week, creating the potential for policy cross-currents.
US earnings: The earnings cycle continues with Alphabet and Amazon reporting this week.
Gold: Trading near elevated levels amid macro uncertainty and shifting rate expectations.
RBA rate decision
RBA decision Tuesday, 3 February, 2:30 pm (AEDT)
RBA media conference: Tuesday, 3 February, 3:30 pm (AEDT)
A 67% likelihood of a rate rise is suggested on the RBA rate-tracker within the futures pricing framework, indicating a market-implied probability of a move.
Market impact
AUD pairs may respond quickly to any repricing of the rate path.
Rate-sensitive equity sectors could see rotation.
Government bond yields may adjust if expectations shift.
Gold has traded near elevated levels amid macro uncertainty and shifting rate expectations. For many traders, strength in gold is sometimes associated with defensive positioning, though gold prices can be volatile and can fall.
The US dollar, Treasury yield movements and geopolitical narrative often influence short-term direction.
Market impact
Continued strength may suggest some investors are leaning toward defensive positioning.
USD and sovereign yield movements often influence short-term direction.
After a strong advance, periods of consolidation or profit-taking are common.
