Key events to watch in the week ahead: 17 – 23 February 2025

This week’s overview

To close out the week, the S&P 500 is aiming for new record highs as market participants move to price out some tariff risks, following US President Donald Trump's update on "reciprocal tariffs," which lacked specific details. Despite earlier tariff threats, he has opted to allow more time to craft a response.

This shift contrasts with the "strike first, talk later" approach of the 2018 trade war. Trump's new strategy gives trading partners more time for negotiations and creates room for potential consensus. This increases the likelihood of agreements being reached as countries move to engage in talks with the US president.

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

US 4Q earnings season: Alibaba, Walmart, Dropbox, Rivian, Booking

The US earnings season will see some winding down next week, with market participants likely to shift their attention towards the Chinese equities’ space. Alibaba will be releasing its results on 20 Feb, and with its share price surging by close to 47% over the past month, the upcoming results will be on watch to offer a reality check.

Meanwhile, key US companies, including Walmart, Dropbox, Rivian, and Booking Holdings, are also scheduled to release their earnings in the coming week.

17 February 2025 (Monday, 7.50am SGT): Japan’s preliminary Q4 gross domestic product (GDP)

Japan’s Q3 GDP was previously revised up to 1.2% from the initial 0.9%, as stronger-than-expected capital investment and exports helped offset weaker consumption and buffed up overall growth.

Looking ahead, Japan’s Q4 GDP is expected to moderate to a 1.0% annualized quarter-on-quarter (QoQ) increase, easing from the 1.2% in Q3. Consumption may remain the weak spot, with projections for the component to contract by 0.3% QoQ, while capital expenditure (+1.0% est) and exports (+0.4% est) are expected to remain the bright spots.

Policymakers will closely monitor the GDP data to assess the scope for further rate hikes. So far, they have relayed some caution regarding consumer spending amid persistent cost pressures. Any signs of weaker growth could keep policymakers more guarded on the timing of the next rate hike.

18 February 2025 (Tuesday, 11.30am SGT): Reserve Bank of Australia (RBA) interest rate decision

At its December meeting, the RBS kept its official cash rate on hold at 4.35% for a ninth consecutive meeting. A dovish shift in tone was noted in the statement that accompanied the “on hold” decision.

Following the RBA’s dovish pivot and a cooler Q4 inflation reading amid sluggish growth, it is widely anticipated that the Reserve Bank of Australia will reduce the cash rate by 25 basis points (bp) to 3.85% at next week's board meeting. This would mark the RBA's first rate cut since November 2020. A second 25 bp rate cut is fully priced for May.

The RBA’s updated forecasts are expected to show lower near-term inflation and slower labour market progress and continue to show a GDP recovery as real disposable incomes begin to rise and inflation decreases.

20 February 2025 (Thursday, 3am SGT): Federal Open Market Committee (FOMC) meeting minutes

At its meeting in late January, the Federal Reserve (Fed) kept the Fed Funds target rate unchanged at 4.25% - 4.50%, a widely expected.

The Fed noted that growth remained steady and that the labour market was stable at strong levels but omitted previous mentions of progress on reducing inflation.

Fed Chair Powell said in his testimony this week that the Fed is in no hurry to cut rates again. We expect to see this point contained in the minutes, along with a desire to await further inflation and jobs data and clarity on the impact of President Donald Trump’s policies.

Following this week's warmer US consumer price index (CPI) reading, the US rates market is pricing in 33 bp of Fed rate cuts this year, less than the 50 bp of Fed rate cuts that were priced this time last week.

21 February 2025 (Tuesday, 7.30am SGT): Japan’s inflation rate

Inflationary pressures in Japan have intensified in recent months, with headline inflation reaching 3.6% in December—the highest since January 2023. Core inflation also climbed to a 19-month high of 3.0%, while strong wage growth data offers conviction that inflation around the Bank of Japan’s (BoJ) 2% target can be sustained.

Japan’s average cash earnings surged 4.8% year-on-year in December and further wage momentum are expected in the upcoming Shunto negotiations to reinforce expectations for a rate hike.

Tokyo’s inflation, often a leading indicator for nationwide trends, sped to 3.4% in January from previous 3.0%, its third straight month of increases. This reflects upside risks to the upcoming nationwide data, with any stronger-than-expected inflation print likely to bring forward rate hike expectations and support the Japanese yen. Currently, markets are leaning towards a 25 bp hike in the September meeting.