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ASX this week: Australian earnings season and RBA rate call

ASX this week: Australian earnings season and RBA rate call

Rio Tinto and Suncorp are among the companies that will announce their latest financial results this week, while the Reserve Bank will decide on the official cash rate tomorrow.

Utilities was the only sector to gain last week, up 1%, while losses in all the other sectors within the S&P/ASX 200 index dragged the benchmark stock gauge lower, down 1.6% over five days to 5,621.6.

On Friday:

  • Brent oil rose 0.4% to US$56.81 a barrel; up 2.3% for the week.
  • WTI crude added 0.5% to US$53.83 a barrel; up 1.2% for the week.
  • Iron ore with 62% content delivered to Qingdao, China, dropped 1.4% to US$82.19 a dry metric tonne. Trading on iron ore resumed on Friday after a week-long Lunar New Year break.
  • Spot gold increased 0.4% to US$1,220.30 an ounce; up 2.4% for the week.
  • Australian dollar traded at 76.80 US cents, soaring 1.7% over the week after the nation's trade surplus unexpectedly hit a record level; the currency fell 0.1% to 76.73 US cents at 10:23am Sydney time today.

What to watch this week

The ASX earnings reporting season is underway. More than 40 companies are scheduled to release their financial results this week, including Rio Tinto (ASX: RIO), Suncorp (ASX: SUN) and Transurban Group (ASX: TCL).

Results from mining and energy companies are on the radar following the rebound in commodity prices since the August 2016 reporting season.

Meanwhile, the Reserve Bank of Australia (RBA) board meets on Tuesday to set the official cash rate, their first rate decision this year. 

The RBA Rate Indicator showed that the market expects no change to the cash rate tomorrow, with chances of a rate cut sitting at just 5% for seven consecutive trading days since 25 January.

CommSec pointed out that financial markets have had new developments since the last RBA board meeting two months ago.

"Financial market volatility has eased, oil prices have steadied, and the Aussie dollar has lifted - albeit marginally," it said. "And on the global front, economic conditions are certainly healthier."

Investors might be watching for any comment from the RBA related to political risks and Brexit plans, CommSec added.

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, 3 February.

Company/Index

ASX code

Weekly price change

Resolute Mining

RSG

+12.3%

Bellamy's Australia

BAL

+8.9%

Mantra Group

MTR

+7.7%

St Barbara

SBM

+7.3%

Saracen Mineral Holdings

SAR

+7%

S&P/ASX 200

XJO

-1.6%

Ansell

ANN

-9.3%

Iluka Resources

ILU

-11.2%

Orocobre

ORE

-15.5%

Virtus Health

VRT

-17.1%

Aconex

ACX

-45.5%

Past performance is not a reliable indicator of future performance. Source: Bloomberg

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. The inclusion of companies in this article does not constitute a recommendation and it’s vital to remember that the value of shares in any company can fall as well as rise, which means you could lose money by investing in them. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.