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(Sharecast News) - Ahead of policy announcements on Thursday from the Bank of England and the European Central Bank - both of which are expected to remain on hold - investors will be eyeing the latest interest rate decision from the Reserve Bank of Australia.
ING said: "Markets have progressed to price in 19bp of tightening by the Reserve Bank of Australia at tonight's meeting, and we are aligned with consensus in calling for a 25bp hike to 3.85%.
"This appears to be a close call, and while the upward surprise in December CPI (paired with a hot housing market) justifies this move, the RBA should refrain from signalling that this is the start of a new hiking cycle."
It said markets are pricing in at least another hike by year-end, and any indications this could be a one-and-done move would cap the support a hike can give to the AUD.
"Our view is that the implications of RBA tightening on AUD/USD may be more visible beyond the short-term anyway, once the USD's overpowering volatility has dissipated," ING said. "In line with our USD view, and given market pricing already leaning on the hawkish side, we think AUD/USD should still trade back lower in the coming weeks before re-entering a sustainable path beyond 0.70."
On the corporate front, Advanced Micro Devices is due to release quarterly results.
Kathleen Brooks, research director at XTB, said the Q4 results will be worth watching closely and are expected to show revenues of $9.64bn and net income of $2.17bn. "The risks are to the upside due to strong CPU demand," she said.
Brooks noted that the shares slid nearly 10% last week, although the stock has outperformed the broader tech sector so far this year and is still higher by 8%.
"Even with last week's decline, AMD's share price is reflecting a healthy amount of optimism about this week's earnings report, so the future direction of the stock will depend on its outlook for 2026," she said. "The risk is that 2026 could see a slowdown in growth, which may last until major AI projects scale up. Cost pressures will also be watched closely."
In Europe, full-year results are due from Publicis, while Alfa Laval and Akzo Nobel will release Q4 earnings.
Tuesday February 03
INTERIMS
Alumasc Group, EnSilica , Filtronic, NWF Group
INTERIM DIVIDEND PAYMENT DATE
Johnson Matthey
FINALS
LBG Media
TRADING ANNOUNCEMENTS
Jadestone Energy
UK ECONOMIC ANNOUNCEMENTS
BRC Sales Monitor (00:01)