The Monday Report – 02 February 2026

Array
(
    [0] => Array
        (
            [0] => ((SPK))
            [1] => ((RIO))
            [2] => ((QOR))
            [3] => ((NEC))
            [4] => ((WES))
            [5] => ((VGN))
            [6] => ((WBC))
        )

    [1] => Array
        (
            [0] => SPK
            [1] => RIO
            [2] => QOR
            [3] => NEC
            [4] => WES
            [5] => VGN
            [6] => WBC
        )

)

This story features SPARK NEW ZEALAND LIMITED, and other companies.
For more info SHARE ANALYSIS: SPK
The company is included in ASX300 and ALL-ORDS

US markets slipped on Friday, with most of the focus on the crash in precious metal prices.

The price of gold went down -9% and silver down by -26%.

The Australian market fell on Friday. ASX200 futures are pointing to a weak start ahead of the RBA's rate decision tomorrow.

Good Morning,

The ASX200 finished 9 points or 0.1% higher last week at 8869.1 after Friday’s savage reversal saw it erase a large chunk of gains from earlier in the week.  

The best performing sectors were energy, up 4.25%, consumer staples, up 1.26%, and financials, up 0.68%.

The IT sector sell -6.61%, consumer discretionary ended down -1.19%, and real estate was off -1.01%.

Australia, the week ahead, Tony Sycamore, IG extract

The key event on the local data calendar this week is Tuesday’s RBA Board meeting. At its last meeting in December, the RBA kept its official cash rate on hold at 3.60%, as widely expected. This unanimous decision marked the RBA’s third consecutive hold.

This decision followed October’s monthly CPI report, which showed a rise in both headline and underlying inflation. While the RBA expressed caution about reading too much into the new monthly CPI data, the figures nonetheless pointed to a broader-based rise in inflation, parts of which could prove persistent.

During the subsequent press conference, Governor Bullock confirmed the RBA did not consider a rate cut at the meeting but did discuss scenarios that could necessitate a hike. She reiterated if inflation pressures proved more persistent, the RBA would be compelled to consider whether higher rates were needed.

Since the December board meeting, key data points have come in firmer than expected. The December labour force report showed the unemployment rate falling to 4.1% from 4.3%, defying expectations of a rise to 4.4%.

Last week’s Q4 inflation report added to the concerns, showing the RBA’s preferred measure, the trimmed mean, rising by 0.9% quarter-on-quarter. This pushed the annual rate to 3.4%, exceeding the RBA’s own 3.2% forecast.

The Australian interest rate market starts the week with 17bp (68% probability) of a 25bp rate hike built in for Tuesday’s RBA Board meeting.

Furthermore, mindful that the RBA never hikes just once, the market is pricing in a second 25bp RBA rate hike by September 2026.

ANZ Bank, Insurance tightening from the RBA, extract

We expect the RBA to raise interest rates by 25bp on 3 February.

We doubt the Board can ignore trimmed mean inflation running at an annualised rate of 3.9% over the second half of 2025 and above the target over the year to Q4 2025.

The recent strength in inflation will see the Board act, even if the combination of a higher AUD Trade Weighted Index (TWI) and a cash rate assumption that is materially different from November’s Statement on Monetary Policy (SMP) enables the RBA staff to forecast inflation returning to the mid-point of the target, as we expect they will.

The Board will also be aware that the higher cash rate assumption in the coming February SMP reflects an expectation in markets that interest rates in Australia will no longer fall but will actually rise.

In next week’s post meeting press conference, we think it likely Governor Bullock will emphasise the Board is not committed to any particular path for the cash rate and that an interest rate increase in February is not necessarily the start of a series of rate hikes.

Both the post-meeting statement and Bullock’s press conference will also likely stress the Board is ‘data dependent’. While the Q4 trimmed mean was above our forecast of 0.8% q/q (actual outcome of 0.9% q/q), there were also some early signs of disinflation in the month of December.

The new monthly trimmed mean printed -0.2% m/m, the first sub 0.3% m/m print since June 2025, while increases in rents and new dwelling purchases both took a step down in the month. We’d expect some moderation in new dwelling purchase inflation if, as is often the case, higher interest rates crimp dwelling approvals.

Rental inflation may however lift, given low vacancy rates and increases in advertised rents.

Overall, we see the labour market as broadly balanced and unlikely to be exerting sustained upward pressure on inflation.

Together with the recent lift in the AUD TWI and a likely slowing in the pace of consumption growth (given softness in consumer confidence), we expect inflation will ultimately moderate into the target over 2026 and into 2027. 

What happened overnight, NAB Markets Today Research extract

News which first surfaced late morning Australia time Friday that President Trump was to announce Kevin Warsh as his pick for next Fed chair, formally confirmed on Friday morning in Washington, dominated the news cycle and market price action at the end of the week. 

The standout market moves Friday were in precious metals, led by a -26% drop in silver and -9% fall for gold, the rush for the exit by speculative (ETF) longs predicated on the perceived credibility of Warsh as head of the central bank and an apparent boost to confidence Fed independence will be preserved. 

The US government went into partial shutdown at midnight on Friday but this is not expected to extend beyond Monday, with the House reconvening to approve funding bills that President Trump has already said he will sign into law.

In rationalising the initial rate and FX market reactions to the Warsh news, we’d note that: 

1) Trump is most unlikely to have nominated Warsh if he was not genuinely supportive of lower interest rates, and for which there is plenty of evidence Warsh believes that the economy can achieve higher rates of non-inflationary growth (similar to former Fed chair Alan Greenspan’s view of the productivity enhancing benefits of the internet revolution, this time centred on AI);

and

 2) Warsh’s well documented criticism of what he regards as ’mission creep’ or ‘gain of function’ via extensive use of its balance sheet since the onset of the GFC, and where his views are completely in sync. with those of Treasury Secretary Bessent. 

Warsh and Bessent have been close business associates in the hedge fund world (Warsh is currently helping Stan Druckenmiller run his family office – both he and Bessent are protégés of Druckemiller, and of Geroge Soros before that). In FT on Friday, Druckenmiller says that Warsh is ‘not a permanent policy hawk’.

Warsh is likely to take Fed Governor Stephen Miran position on the Fed Board assuming new positions don’t open before May when Jay Powell’s Fed chair term ends. Miran informed Bloomberg TV,  “I still think we need to cut interest rates substantially further from here” and that almost all the inflation excess over target is due to two specific factors, namely how housing and portfolio management fees are incorporated into inflation readings, which he described as “fake inflation”.

In equity markets, the interest rate sensitive technology sector, and commodity price sensitive materials sector, led declines for the S&P500, ending the day -0.4% against ta 0.9% fall for the NASDAQ – the latter even though Apple eked out a small gain, up 0.5% following its results post-Thursday’s close.

It was though the smaller-cap Russell2000 which fared worse, down -1.6% and extending its weekly loss to -2.0%, more than any of the major global indices we track and where the Hang Seng fared best, up 2.4%. 

Finally in commodities, gold and silver plummeted post the Warsh news, silver by -26% to US$85.20 (having been as low as US$74 intraday) and gold by -8.9% to US$4,894 and an intraday low US$4,690.

This off a high of US$5594 recorded on Thursday. Industrial metals were also lower, copper down -4.5% and aluminium -2.3%.

Iron ore futures fell -0.9%, with risk that Saturday’s weak China PMI numbers will add further pressure at the start of the new week.

Oil was little changed Friday but mounting fears of another US military attack on Iran meant the Brent crude finished the week 7.3% higher and WTI 6.8%.

Jose Torres, Interactive Brokers extract

Risk-off sentiment continues to grip Wall Street as Apple’s beat-and-raise on Thursday night failed to reignite AI excitement, leading to another session of tech shares underperforming broader equities.

But conditions in stocks are much better than they were overnight, as futures sold off aggressively after the nomination of former Fed Governor Kevin Warsh to lead the central bank after the culmination of Chair Powell’s term in May.

Warsh is historically a hawk and has maintained an orthodoxy throughout his career of disciplined monetary policy characterized by higher real rates and a limited balance sheet; however, he has recently tilted toward President Trump’s preference for lower borrowing costs, and that may well have secured his selection.

The greenback is rallying amid the backdrop that the new chief, if confirmed, has the strongest chance among the candidates to assume a confrontational posture regarding the White House’s desire for a less restrictive stance.

The “Buy America” trade is back as a result, and the independence bid that drove gold and silver to nosebleed record heights right below US$5,600 and US$122 per ounce early Thursday morning is unraveling, with the precious metals diving to nearly as low as US$4,900 and US$90 only a day later. Copper is getting punished, too, in the wake of hitting an all-time high.

The yield curve is steepening; meanwhile, as almost two cuts for this year remain priced in, helping the shorter tenors notch gains; nonetheless, the long-end is suffering modest losses, as Warsh’s inclination for less, and not more, fixed-income instruments on the institution’s financial statements quells enthusiasm regarding quantitative easing prospects.

Pricier duration is also stemming from a hotter-than-expected PPI print, and that’s hurting the cyclical aspects of the market, as just 3 of the major 11 sectors are advancing following an interval where we saw an optimistic broadening.

The strongest cost pressures since July drove a significant beat in December’s Producer Price Index (PPI). The headline reading climbed 0.5% month over month (m/m) and 3% year over year (y/y), stronger than the 0.2% and 2.7% expected.

In November, the gauge was up 0.2% m/m and 3% y/y. Under the hood, core goods rose 0.4% last month while food and energy offered relief, declining 0.3% and 1.4% during the period. Services experienced broad hikes, however, with the overall 0.7% rise supported by 1.7%, 0.5% and 0.3% increases from trade, transportation/warehousing and the other category, respectively.

A deceleration in home values and rental costs across the country, on the back of cratering population growth, is poised to continue putting downward pressure on inflation. Housing comprises more than 40% of the Consumer Price Index (CPI), and ongoing relief there can offset the recent surge in energy prices as well as any unexpected acceleration in services and/or goods.

The fundamental driver of slowing shelter inflation is the domestic population expansion breaking to a crawl, as aging dynamics, declining births and restrictive immigration pose significant headwinds to household formation, weighing on residential closings and leases.

These impacts are substantially more important to the overall picture than tariffs and/or robust shopper demand driving up prices, and while they don’t bode well for longer-term GDP potential, they are deflationary.

Meanwhile, Japan, the EU, and China are experiencing even more severe demographic issues, offering lessons about future risks for the US.

Corporate news in Australia

-Spark New Zealand ((SPK)) sold 75% of its data centre arm to Pacific Equity Partners in a transaction worth up to NZ$705m

-Rio Tinto ((RIO)) and Chinalco acquire $1.3bn Brazilian aluminium stake

-Qoria ((QOR)) plans merger with US tech company Aura

-Nine Entertainment ((NEC)) is acquiring outdoor ad company QMS for $850m

-Pharmacy Guild alerts ACCC to Priceline ((WES)) stores sales

-Bain Capital could divest part of its Virgin Australia ((VGN)) after 1H26 results

-Bain Capital prepares for $700m-plus IPO for Estia Health

-Homart Pharmaceuticals is preparing for $100m ASX IPO

-Westpac ((WBC)) backed ShopBack is considering an Australian IPO

On the calendar today:

-AU ANZ-Indeed Job Ads

-EZ Flash Jan Inflation

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms