Key events to watch in the week ahead: 10 – 16 February 2025

This week’s overview

The week started with a dip amid trade war concerns, but markets quickly rebounded on news of tariff delays for Mexico and Canada. While uncertainty remains over potential US-China trade escalations, a relative sense of calm prevails for now.

The S&P 500 and Wall Street remains close to 1% away from a fresh record high, while performance for the Magnificent Seven stocks were fairly mixed over the past week. Nvidia and Meta looks on track to close the week in positive territory, but the same cannot be said for Tesla, Alphabet and Apple.

Heading into the new week, here are five key events to watch.

US 4Q earnings season: McDonald’s, Lyft, Super Micro, Robinhood, Coinbase, Airbnb

With most megacap earnings reported—except for Nvidia on February 26—the US earnings season is entering its final stretch. So far, 61% of S&P 500 companies have released results, with 77% exceeding earnings expectations, indicating continued momentum from previous quarters.

Next week's earnings spotlight will be on McDonald's, Lyft, Super Micro, Robinhood, Coinbase, and Airbnb.

11 February 2025 (Tuesday, 7.30am SGT): Australia’s Westpac Consumer Sentiment

In January, Consumer Confidence fell by -0.7% to 92.1, marking its second consecutive monthly decrease. In addition to the ongoing unsettled global environment, consumers might have been influenced by reports of the Australian dollar's sharp drop against the US dollar, leading to negative headlines about interest rate prospects and the broader economy.

This week’s headlines about tariffs and trade wars are likely to counteract some of the positive news following last week's lower-than-expected Q4 inflation numbers, which has opened the way for the Reserve Bank of Australia (RBA) to cut rates later this month. As such, a flat to modestly higher reading may be viewed next week.

12 February 2025 (Wednesday, 9.30pm SGT): US consumer price index (CPI)

At its January meeting, the Federal Reserve (Fed) kept the policy rate unchanged at 4.25%-4.50%, as widely expected. Fed Chair Jerome Powell signalled no urgency in cutting rates, emphasising that further easing would depend on inflation and labour market data. This leaves the upcoming inflation data crucial in moving the dial around rate expectations.

With inflation still above target, policymakers will be looking for more evidence of disinflation before resuming rate cuts, although tariff, tax and spending policies under the Trump administration do inject some uncertainty around inflation risks as well. Currently, market rate expectations are pricing for the next Fed rate cut to come only in June this year.

For December, US headline CPI rose 0.4% month-over-month (MoM), while core CPI provided some relief with a 0.2% MoM increase, indicating that underlying pricing pressures remain contained. Shelter inflation continued to slow, and healthcare services costs eased. Looking ahead, both headline and core inflation are expected to rise 0.3% MoM in January, which should reinforce expectations that the Fed will keep rates steady at its March meeting.

13 February 2025 (Thursday, 3pm SGT): UK gross domestic product (GDP)

The UK economy grew 0.1% in November and while it reflected some improvement from the 0.1% contraction in both September and October, the expansion fell short of the 0.2% consensus estimate. Growth conditions continue to face the risks of stagnation, with the Bank of England (BoE) halving its 2025 growth estimate (0.75% versus previous 1.5% estimate) and delivering a 25 basis point (bp) rate cut this week in response.

Looking ahead, the BoE Governor Andrew Bailey expects the GDP growth to be “notably weaker in the near term before picking up from the middle of the year”. A return in GDP back to contraction will likely add to calls for further easing, with markets currently pricing in another 25 basis point rate cut at the BoE’s May meeting.

14 February 2025 (Friday, 9.30pm SGT): US retail sales

In December 2024, headline retail sales in the US rose by 0.4%, marking the smallest increase in four months. This followed an upwardly revised 0.8% gain in November and a 0.6% rise in October.

The all-important Retail Control Group, which feeds into GDP, rose by 0.7% in December, following a 0.4% rise in November. Overall, consumer spending remains resilient, bolstered by the Fed's 100 bp rate cuts at the back end of 2024 and a solid jobs market. This trend is expected to continue into the opening months of 2025.

The rates market is pricing in two Fed rate cuts for 2025, in line with updated Fed projections.