US sharemarkets closed marginally lower last week on concerns over rising inflation and interest rates and after major banks reported mixed earnings.
Also weighing on sentiment were Omicron-related disruptions and softer economic data, as retail sales, industrial production, and the January Preliminary Michigan Consumer Sentiment all missed consensus expectations.
The Australian sharemarket, the ASX200, fell 0.8 per cent to close at 7394 as the 7400 level continued to exert a magnetic-like effect over the local bourse.
Here are the top five things to watch in markets this week.
1. US Q4 2021 earnings results
Fourth-quarter reporting season picks up speed this week with 114 companies scheduled to report, including Goldman Sachs, Morgan Stanley, Bank of America and Netflix.
Despite the headwinds of Omicron, rising inflation and higher interest rates, the estimated earnings growth rate for the S&P500 is expected to be 21.7 per cent, which, according to FactSet, will mark the fourth straight quarter of earnings growth above 20 per cent.
2. Australian jobs data for December
Employment in Australia rebounded by 366,000 in November.
The jobs report for December to be released on Thursday is likely to show a more modest gain of about 60,000 jobs, with the unemployment rate falling slightly to 4.5 per cent.
3. Fed speak before the blackout period
Comments by Federal Reserve speakers on policy normalisation will be closely watched for this week ahead of the Feds blackout period that starts this Friday, before its January 25-26 meeting.
4. Canadian inflation data
This week, a strong inflation print may become the catalyst for the Bank of Canada to become the latest central bank to join the interest rate hiking cycle at its meeting next week.
5. UK employment and inflation data
Strong inflation and employment data this week should be the final confirmation that the Bank of England with follow up its 15 basis point interest hike in December with a 25 basis point hike at its meeting in the first week of February.
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