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Five key things to watch in markets this week

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As confronting as Russia’s full-scale invasion of Ukraine was, US stockmarkets recovered from heavy mid-week losses to close the week higher as investors stepped in to buy the dip.

Over the past few weeks, solid domestic corporate earnings have insulated the ASX200 from European geopolitical tensions.

However, Russia’s invasion of Ukraine prompted the local bourse to capitulate, and it finished the week down 3.1 per cent at 6998.

Here are the top five things to watch in markets this week:

1. What does the expanded Russian invasion of Ukraine and new sanctions mean for markets?

The humanitarian cost of the war is the prime consideration and movements in markets seem inconsequential, but traders will continue to assess what Russia’s expanded invasion of Ukraine and sanctions means for ECB policy, the energy and commodity crisis and what risk premia should be attached to European assets.

2. RBA meeting

At its second meeting for the year on Tuesday afternoon, the RBA will leave monetary policy on hold and note that while wages growth has picked up, further increases are needed to push the inflation rate sustainably with the RBA’s 2 to 3 per cent target band.

Events in Europe last week have prompted the interest rate market to push back expectations of the RBA’s first rate hike from June until July.

3. Fourth-quarter Australian GDP

Following a 1.9 per cent quarterly fall in the Delta-affected September quarter, December quarter GDP is expected to rebound by 2.9 per cent quarterly or 3.5 per cent annually.

The gains will be driven by robust consumer spending and strength in public spending.

4. Will the Bank of Canada raise interest rates?

The Bank of Canada is expected to raise interest rates from 0.25 per cent to 0.50 per cent this week in response to high inflation, which is at its highest rate since September 1991, along with a pickup in growth.

5. US jobs data

There are about seven million unemployed Americans, and there are approximately 11 million unfilled jobs.

This imbalance is expected to see payrolls rise by another 4,500,000 jobs in February and the unemployment rate fall to 3.9 per cent.

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