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(Sharecast News) - On Wednesday, half-year results are due from Cairn Homes and TT Electronics, while Broadcom will report in the US.
As far as Broadcom is concerned, Kathleen Brooks, research director at XTB, said the market wants to know if it will offer the same positive outlook for revenues as Nvidia did, after the latter forecast revenue growth of $108bn for the current quarter.
"Broadcom provides custom chips for Google, its longest standing partner, Meta, OpenAI, Anthropic and Apple," she noted. "Along with Marvell, Broadcom has a 70% market share of the custom accelerator chip market, which is central to agentic AI. Considering its main customers are still boosting capex spending to reach their AI ambitions, expectations are high that Broadcom could beat revenue and earnings guidance.
"Analysts are expecting revenue to come in at $29.3bn for last quarter, and for earnings per share to come in at $3.22, which would make Broadcom more profitable on a per-share basis than Nvidia. Any hint of disappointment in this earnings report would be a major downside surprise, and could weigh on the AI trade and market sentiment especially towards the US and Asian indices in South Korea and Japan."
Investors will also turn their attention to the latest policy announcements from the Reserve Bank of New Zealand and Bank of Canada.
ING FX strategist Francesco Pesole expects the RBNZ to increase its overnight cash rate (OCR) by 25 basis points to 2.75%.
"When rates were last hiked in July, the RBNZ said that 'some further reduction in monetary stimulus is likely to be required'. In its May projections, based on higher oil price assumptions, signalled rates could reach 3.0% by year-end and remain there throughout 2027," he said.
"Markets are currently matching those projections for 2026, but are even more hawkish for 2027, despite lower energy prices. A September hike is fully priced, with another expected by year-end. Beyond that, the OIS curve implies a further 50bp of tightening, taking rates to 3.50% by mid-2027.
"Against this backdrop, we see scope for dovish risks heading into the meeting. The bar for the RBNZ to validate the market's aggressive tightening expectations appears high."