The United States used 30.28 trillion cubic feet of natural gas in 2021, making them the world’s largest consumer of natural gas. Natural gas consumption in the United States has two seasonal peaks, largely reflecting weather-related fluctuations in energy demand. One of the biggest consumptions of gas is industrial, residential and commercial cooling and heating systems (eia, 2022).
As the world’s largest user of natural gas transitions out of summer, will this change indicate a decrease of their natural gas consumption? Could the decrease in demand for cooling be reflected on the technical charts? On a daily timeframe, natural gas has been on a steady upward trend since the end of June, in tandem with the beginning of summer in the US (seen on the chart below).
A trendline from the beginning of that trend until now can be drawn, and we can see recently that line has been broken by a daily candlestick, closing below the trendline which can indicate a change in trend for natural gas. After the strong break below of the trendline followed by multiple bearish daily candlesticks, we can consequently expect further downside movement for natural gas, after breaking through a strong support at $8.4, in all probability with natural gas currently sitting at $7.895 we could see natural gas come down to the next support level around $7.57.
By
Mark Nguyen
Account Manager
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Venezuela commands the world's largest proven oil reserves at 303 billion (bn) barrels (bbl). Yet political turmoil, global sanctions, and recent US intervention show that being the biggest isn’t always best.
What does this mean for oil markets?
The concentration of reserves among Organization of the Petroleum Exporting Countries (OPEC) members (60% of the global total) gives the group ongoing influence on supply policy and market sentiment, even as US shale provides a production counterweight.
Venezuela's potential return as a major exporter post-US intervention could eventually ease supply constraints, though most analysts view significant production increases as years away.
Sanctions could create a situation where discounted crude seeks buyers willing to navigate compliance risks. Refiners with heavy crude processing capability may benefit from price differentials if Venezuelan barrels increase.
While reserves appear abundant, economically recoverable volumes depend on sustained high prices. If renewable adoption accelerates and demand peaks sooner than projected, stranded assets become a material risk for reserve-heavy producers.
Top 10 countries by proven oil reserves
1. Venezuela – 303 billion barrels
Controls 18% of global reserves, primarily extra-heavy crude in the Orinoco Belt requiring specialised refining.
Heavy crude typically trades $15-$20 below Brent benchmarks due to high sulphur content and complex processing requirements.
Output crashed by 60% from 2.5 million bpd in 2014 to less than 1 million barrels per day (BPD) last year.
Approximately 80% of exports flow to China as loan repayments, with export revenues dwarfed by reserve potential.
2. Saudi Arabia – 267 billion barrels
The majority of its light, sweet crude oil requires minimal refining and commands premium prices, contributing to world-leading exports of $191.1 bn in 2024.
Maintains 2-3 million bpd of spare production capacity, providing a stabilising buffer during supply disruptions.
Oil comprises roughly 50% of the country’s GDP and 70% of its export earnings.
Production decisions significantly impact international oil prices due to market dominance.
Heavy Western sanctions severely limit the country’s ability to monetise and access international markets.
Production estimates vary significantly (2.5-3.8 million bpd) due to sanctions, limited transparency, and restricted international reporting.
Significant crude volumes flow to China through discount arrangements and sanctions-evading mechanisms.
Sanctions relief could rapidly boost production toward 4-5 million bpd, though domestic consumption (12th globally) reduces export potential.
4. Canada – 163 billion barrels
Approximately 97% of reserves are oil sands (bitumen) requiring steam-assisted extraction and significant upfront capital investment.
Political stability and regulatory frameworks position Canada as a secure source compared to volatile producers, with direct pipeline access to US refineries.
Supplied over 60% of US crude oil imports in 2024, making Canada America's top source by far.
5. Iraq – 145 billion barrels
Decades of war and sanctions have prevented optimal field development and infrastructure modernisation.
Improved security conditions since 2017 have enabled production recovery, but pipeline attacks and ageing facilities continue to constrain output.
Oil revenue comprises over 90% of government income, creating extreme fiscal vulnerability.
Exports flow primarily to China, India, and Asian buyers seeking a reliable Middle Eastern supply, with most production from super-giant southern fields near Basra.
6. United Arab Emirates – 113 billion barrels
Produces primarily medium-to-light sweet crude commanding premium prices, ranking fourth globally in export value at $87.6 bn.
Has successfully diversified its economy through tourism, finance, and trade, reducing oil's GDP share compared to Gulf peers.
Strategic location near the Strait of Hormuz and openness to international oil companies help facilitate efficient global distribution.
7. Kuwait – 101.5 billion barrels
Reserves are concentrated in ageingsuper-giant fields like Burgan, which require enhanced recovery techniques.
Favourable geology enables extraction costs around $8-$10 per barrel, with proven reserves providing 80+ years of supply at current production rates.
Oil comprises 60% of GDP and over 95% of export revenue.
8. Russia – 80 billion barrels
The world's third-largest producer despite ranking eighth in reserves.
Post-2022, Western sanctions redirected crude flows from Europe to Asia, with China and India now absorbing the majority at discounted prices.
Despite export restrictions and G7 price cap at $60/barrel, it posted the second-highest global export value at $169.7 bn in 2024.
Russian Urals crude typically trades $15-30 below Brent due to quality, sanctions, and logistics, with November 2024 revenues declining to $11 bn.
9. United States – 74.4 billion barrels
The shale revolution through horizontal drilling and hydraulic fracturing has made the US the world's No.1 oil producer despite holding only the 9th-largest reserves.
The Permian Basin accounts for nearly 50% of production, with shale/tight oil representing 65% of total output.
Achieved net petroleum exporter status in 2020 for the first time since 1949, with crude exports growing from near-zero in 2015 to over 4 million bpd in 2024.
The US government maintains a strategic reserve of 375+ million barrels.
10. Libya – 48.4 billion barrels
Holds Africa's largest proven oil reserves at 48.4 bn barrels, producing light sweet crude commanding premium prices.
Rival bordering governments compete for oil revenue control, causing production to fluctuate based on political conditions.
Oil facilities face blockades, militia attacks, and political leverage tactics, preventing consistent returns.
Favourable geology enables extraction costs around $10-15 per barrel, with geographic proximity making Libya a natural supplier to European refineries.
You can trade Oil and other Commodity CFDs, including metals, energies, and agricultural products, on GO Markets.
FX markets enter the month influenced by uncertain growth momentum, inflation dynamics and central bank policy, yield sensitivity, and shifts in how markets are pricing geopolitical risk.
Quick facts:
USD remains primarily responsive to inflation data, and this may have overtaken growth as the main driver.
JPY sensitivity to potential Bank of Japan (BOJ) action remains high, creating asymmetric responses to global rate moves and policy communication.
EUR and AUD continue to trade reactively to global events and commodity price moves.
Volatility may be episodic, clustering around key data releases rather than a single sustained directional trend.
With central bank expectations still evolving into the first quarter (Q1), key releases and policy communication are likely to stay central to near-term FX pricing. In this environment, moves may cluster around scheduled events and headline risk, rather than build into a single dominant trend.
USD performance remains closely tied to inflation data and what it could mean for Federal Reserve policy expectations. Market pricing can shift quickly around CPI and labour-market outcomes, particularly where outcomes affect how investors perceive the timing and pace of any policy changes.
Jobs data and GDP numbers will be watched as gauges of growth momentum. The start of the US earnings season may also influence FX indirectly through its impact on equity performance, risk sentiment, and yield expectations, rather than acting as a direct currency driver.
Key chart: US dollar index (DXY) weekly chart
Periods of market uncertainty can support USD demand around prior support areas near 97, while the 100 region may continue to act as a reference point for resistance, including where it aligns with commonly watched moving averages (noting technical indicators can fail).
A break in either direction may reflect shifting expectations about how different central banks will respond to the next run of inflation and growth data.
Euro (EUR)
Key data and events:
CPI (Euro area HICP, Dec 2025 reference period): 19 January 2026 European Central Bank
European Central Bank (ECB) messaging on policy direction and inflation remains key. A prolonged hold is one scenario market participants continue to debate, but outcomes are likely to remain data-dependent and sensitive to changes in the growth and inflation backdrop.
The geopolitical situation in Ukraine will also remain in focus.
Key chart: EUR/USD weekly chart
Differences in likely central bank direction could support a test of the top end of the current multi-month range near 1.18. A sustained break above that level would be technically significant.
For now, price may stay range-bound until there is clearer guidance on policy direction on both sides of the Atlantic.
Japanese yen (JPY)
Key data and events:
BOJ policy decision: 22–23 January 2026 Bank of Japan
Tokyo core CPI (Ku-area of Tokyo, preliminary; Dec 2025 reference month): 23 January 2026 Statistics Bureau of Japan
What to watch:
Following the BOJ’s December rate rise, markets appear to be weighing the likelihood of further action in Q1. Whether the January meeting delivers another move remains uncertain and may depend on incoming inflation and wage signals, as well as BOJ communication.
Data released ahead of the decision may be important in shaping expectations.
Key chart: GBP/JPY daily chart
As of 7 January 2026, GBPJPY has traded around the 211.50 area, near levels last seen in 2008. Continued consolidation may suggest fresh drivers are needed to extend gains.
If the cross can’t push higher, some traders will start watching for a pullback toward 210.00, where support has shown up before. And if expectations for BOJ action build, selling could accelerate, with price potentially drifting down through those previously tested support zones and toward the more established support near 208.00.
RBA rate decision: 3 February 2026 (Monetary Policy Board meeting 2–3 February) Reserve Bank of Australia
AUD continues to behave as a proxy for global growth sentiment and commodity demand.
Stabilisation in Chinese data, firmer commodity prices, and expectations around the Reserve Bank of Australia (RBA) policy path may be providing relative support for AUD. Sensitivity to broader risk conditions remains high.
Key chart: EUR/AUD daily chart
Moves in commodity prices have coincided with a sharp fall in EURAUD since the 31 December close, breaking down out of the prior range. The next key level to the downside sits at 1.7305.
The area around 1.7305 may help indicate whether selling pressure is continuing or whether momentum is fading for now. Near-term commodity price moves are likely to remain important.
Bottom line
FX conditions this month may remain reactive, with volatility clustering around key data releases rather than a sustained directional trend. With Q1 central bank expectations still forming, price moves may be sharper around the calendar, policy communication, and geopolitical headlines.
Asia starts the week with a fresh geopolitical shock that is already being framed in oil terms, not just security terms. The first-order move may be a repricing of risk premia and volatility across energy and macro, while markets wait to see whether this becomes a durable physical disruption or a fast-fading headline premium.
At a glance
What happened: US officials said the US carried out “Operation Absolute Resolve”, including strikes around Caracas, and that Venezuela’s President Nicolás Maduro and his wife were taken into US custody and flown to the United States (subject to ongoing verification against the cited reporting).
What markets may focus on now: Headline-driven risk premia and volatility, especially in products and heavy-crude-sensitive spreads, rather than a clean “missing barrels” shock.
What is not happening yet: Early pricing has so far looked more like a headline risk premium than a confirmed physical supply shock, though this can change quickly, with analysts pointing to ample global supply as a possible cap on sustained upside.
Next 24 to 72 hours: Market participants are likely to focus on the shape of the oil “quarantine”, the UN track, and whether this stays “one and done” or becomes open-ended.
Australia and Asia hook: AUD as a risk barometer, Asia refinery margins in diesel and heavy, and shipping and insurance where the price can show up in friction before it shows up in benchmarks.
What happened, facts fast
Before anyone had time to workshop the talking points, there were strikes, there was a raid, and there was a custody transfer. US officials say the operation culminated in Maduro and his wife being flown to the United States, where court proceedings are expected.
Then came the line that turned a foreign policy story into a markets story. President Trump publicly suggested the US would “run” Venezuela for now, explicitly tying the mission to oil.
Almost immediately after that came a message-discipline correction. Secretary of State Marco Rubio said the US would not govern Venezuela day to day, but would press for changes through an oil “quarantine” or blockade.
That tension, between maximalist presidential rhetoric and a more bureaucratically describable “quarantine”, is where the uncertainty lives. Uncertainty is what gets priced first.
Source: Adobe images
Why this is price relevant now
What’s new versus known for positioning
What’s new, and price relevant, is that the scale and outcome are not incremental. A major military operation, a claimed removal of Venezuela’s leadership from the country, and a US-led custody transfer are not the sort of things markets can safely treat as noise.
Second, the oil framing is explicit. Even if you assume the language gets sanded down later, the stated lever is petroleum. Flows, enforcement, and pressure via exports.
Third, the embargo is not just a talking point anymore. Reporting says PDVSA has begun asking some joint ventures to cut output because exports have been halted and storage is tightening, with heavy-crude and diluent constraints featuring prominently.
What’s still unknown, and where volatility comes from
Key unknowns include how strict enforcement is on water, what exemptions look like in practice, how stable the on-the-ground situation is, and which countries recognise what comes next. Those are not philosophical questions. Those are the inputs for whether this is a temporary risk premium or a durable regime shift.
Political and legal reaction, why this drives tail risk
The fastest way to understand the tail here is to watch who calls this illegal, and who calls it effective, then ask what those camps can actually do.
Internationally, reaction has been fast, with emphasis on international law and the UN Charter from key partners, and UN processes in view. In the US, lawmakers and commentators have begun debating the legal basis, including questions of authority and war powers. That matters for markets because it helps define whether this is a finite operation with an aftershock, or the opening chapter of a rolling policy regime that keeps generating headlines.
Market mechanism, the core “so what”
Here’s the key thing about oil shocks. Sometimes the headline is the shock. Sometimes the plumbing is the shock.
Venezuela’s heavy-crude system: Orinoco production, key pipelines, and export/refining bottlenecks.
Volumes and cushion
Venezuela is not the world’s swing producer. Its production is meaningful at the margin, but not enough by itself to imply “the world runs out of oil tomorrow”. The risk is not just volume. It is duration, disruption, and friction.
The market’s mental brake is spare capacity and the broader supply backdrop. Reporting over the weekend pointed to ample global supply as a likely cap on sustained gains, even as prices respond to risk.
Quality and transmission
Venezuela’s barrels are disproportionately extra heavy, and extra heavy crude is not just “oil”. It is oil that often needs diluent or condensate to move and process. That is exactly the kind of constraint that shows up as grade-specific tightness and product effects.
Reporting has highlighted diluent constraints and storage pressure as exports stall. Translation: even if Brent stays relatively civil, watch cracks, diesel and distillates, and any signals that “heavy substitution” is getting expensive.
Heavy-light spread as a stress gauge: rising differentials can signal costly substitution and tighter heavy supply.
Products transmission, volatility first, pump later
If crude is the headline, products are the receipt, because products tell you what refiners can actually do with the crude they can actually get. The short-run pattern is usually: futures reprice risk fast, implied volatility pops; physical flows adapt more slowly; retail follows with a lag, and often with less drama than the first weekend of commentary promised.
For Australia and Asia desks, the bigger point is transmission. Energy moves can influence inflation expectations, which can feed into rates pricing and the dollar, and in turn affect Asia FX and broader risk, though the links are not mechanical and can vary by regime.
Some market participants also monitor refined-product benchmarks, including gasoline contracts such as reformulated gasoline blendstock, as part of that chain rather than as a stand-alone signal.
Historical context, the two patterns that matter
Two patterns matter more than any single episode.
Pattern A: scare premium. Big headline, limited lasting outage. A spike, then a fade as the market decides the plumbing still works.
Pattern B: structural. Real barrels are lost or restrictions lock in; the forward curve reprices; the premium migrates from front-month drama to whole-curve reality.
One commonly observed pattern is that when it is only premium, volatility tends to spike more than price. When it is structural, levels and time spreads move more durably.
The three possible market reactions
Contained, rhetorical: quarantine exists but porous; diplomacy churns; no second-wave actions. Premium bleeds out; volatility mean-reverts.
Escalation, prolonged control risk: “not governing” language loses credibility; repeated operations; allies fracture further. Longer-duration premium; broader risk-off impulse across FX and rates.
Australia and Asia angle
For Sydney, Singapore, and Hong Kong screens, this is less about Venezuelan retail politics and more about how a Western Hemisphere intervention bleeds into Asia pricing.
AUD is the quick and dirty risk proxy. Asia refiners care about the kind of oil and the friction cost. Heavy crude plus diluent dependency makes substitution non-trivial. If enforcement looks aggressive, the “price” can show up in freight, insurance, and spreads before it shows up in headline Brent.
Catalyst calendar, key developments markets may monitor
US policy detail: quarantine rules, enforcement posture, exemptions.
UN and allies: statements that signal whether this becomes a long legitimacy fight.
For over 110 years, the Federal Reserve (the Fed) has operated at a deliberate distance from the White House and Congress.
It is the only federal agency that doesn’t report to any single branch of government in the way most agencies do, and can implement policy without waiting for political approval.
These policies include interest rate decisions, adjusting the money supply, emergency lending to banks, capital reserve requirements for banks, and determining which financial institutions require heightened oversight.
The Fed can act independently on all these critical economic decisions and more.
But why does the US government enable this? And why is it that nearly every major economy has adopted a similar model for their central bank?
The foundation of Fed independence: the panic of 1907
The Fed was established in 1913 following the Panic of 1907, a major financial crisis. It saw major banks collapse, the stock market drop nearly 50%, and credit markets freeze across the country.
At the time, the US had no central authority to inject liquidity into the banking system during emergencies or to prevent cascading bank failures from toppling the entire economy.
J.P. Morgan personally orchestrated a bailout using his own fortune, highlighting just how fragile the US financial system had become.
The debate that followed revealed that while the US clearly needed a central bank, politicians were objectively seen as poorly positioned to run it.
Previous attempts at central banking had failed partly due to political interference. Presidents and Congress had used monetary policy to serve short-term political goals rather than long-term economic stability.
So it was decided that a stand-alone body responsible for making all major economic decisions would be created. Essentially, the Fed was created because politicians, who face elections and public pressure, couldn’t be relied upon to make unpopular decisions when needed for the long-term economy.
Although the Fed is designed to be an autonomous body, separate from political influence, it still has accountability to the US government (and thereby US voters).
The President is responsible for appointing the Fed Chair and the seven Governors of the Federal Reserve Board, subject to confirmation by the Senate.
Each Governor serves a 14-year term, and the Chair serves a four-year term. The Governors' terms are staggered to prevent any single administration from being able to change the entire board overnight.
Beyond this “main” board, there are twelve regional Federal Reserve Banks that operate across the country. Their presidents are appointed by private-sector boards and approved by the Fed's seven Governors. Five of these presidents vote on interest rates at any given time, alongside the seven Governors.
This creates a decentralised structure where no single person or political party can dictate monetary policy. Changing the Fed's direction requires consensus across multiple appointees from different administrations.
The case for Fed independence: Nixon, Burns, and the inflation hangover
The strongest argument for keeping the Fed independent comes from Nixon’s time as president in the 1970s.
Nixon pressured Fed Chair Arthur Burns to keep interest rates low in the lead-up to the 1972 election. Burns complied, and Nixon won in a landslide. Over the next decade, unemployment and inflation both rose simultaneously (commonly referred to now as “stagflation”).
By the late 1970s, inflation exceeded 13 per cent, Nixon was out of office, and it was time to appoint a new Fed chair.
That new Fed chair was Paul Volcker. And despite public and political pressure to bring down interest rates and reduce unemployment, he pushed the rate up to more than 19 per cent to try to break inflation.
The decision triggered a brutal recession, with unemployment hitting nearly 11 per cent.
But by the mid-1980s, inflation had dropped back into the low single digits.
Pre-Volcker era inflation vs Volcker era inflation | FRED
Volcker stood firm where non-independent politicians would have backflipped in the face of plummeting poll numbers.
The “Volcker era” is now taught as a masterclass in why central banks need independence. The painful medicine worked because the Fed could withstand political backlash that would have broken a less autonomous institution.
Are other central banks independent?
Nearly every major developed economy has an independent central bank. The European Central Bank, Bank of Japan, Bank of England, Bank of Canada, and Reserve Bank of Australia all operate with similar autonomy from their governments as the Fed.
However, there are examples of developed nations that have moved away from independent central banks.
In Turkey, the president forced its central bank to maintain low rates even as inflation soared past 85 per cent. The decision served short-term political goals while devastating the purchasing power of everyday people.
Argentina's recurring economic crises have been exacerbated by monetary policy subordinated to political needs. Venezuela's hyperinflation accelerated after the government asserted greater control over its central bank.
The pattern tends to show that the more control the government has over monetary policy, the more the economy leans toward instability and higher inflation.
Independent central banks may not be perfect, but they have historically outperformed the alternative.
Turkey’s interest rates dropped in 2022 despite inflation skyrocketing
Why do markets care about Fed independence?
Markets generally prefer predictability, and independent central banks make more predictable decisions.
Fed officials often outline how they plan to adjust policy and what their preferred data points are.
Currently, the Consumer Price Index (CPI), Personal Consumption Expenditures (PCE) index, Bureau of Labor Statistics (BLS) monthly jobs reports, and quarterly GDP releases form expectations about the future path of interest rates.
This transparency and predictability help businesses map out investments, banks to set lending rates, and everyday people to plan major financial decisions.
When political influence infiltrates these decisions, it introduces uncertainty. Instead of following predictable patterns based on publicly released data, interest rates can shift based on electoral considerations or political preference, which makes long-term planning more difficult.
The markets react to this uncertainty through stock price volatility, potential bond yield rises, and fluctuating currency values.
The enduring logic
The independence of the Federal Reserve is about recognising that stable money and sustainable growth require institutions capable of making unpopular decisions when economic fundamentals demand them.
Elections will always create pressure for easier monetary conditions. Inflation will always tempt policymakers to delay painful adjustments. And the political calendar will never align perfectly with economic cycles.
Fed independence exists to navigate these eternal tensions, not perfectly, but better than political control has managed throughout history.
That's why this principle, forged in financial panics and refined through successive crises, remains central to how modern economies function. And it's why debates about central bank independence, whenever they arise, touch something fundamental about how democracies can maintain long-term prosperity.
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.
