Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.
Retail sales (Tuesday)
Retail sales for January are due for release on Tuesday. A partial drop-off from December figures is likely, following a modest but expected holiday bump that surpassed low analyst expectations due to discounting. With an interest rate cut still seeming unlikely in January, consumer confidence at the checkout was probably muted at the start of the year.
Consumer confidence remains highly pessimistic, with household budgets under strain. However, corporate earnings from major retail players provide additional context.
JB Hi-Fi’s half-year report demonstrated resilience and optimism while Wesfarmers also showed strength in its latest results. Despite short-term market uncertainty, the broader retail tone appears positive.
Looking ahead, the February Reserve Bank of Australia (RBA) rate cut should boost consumer confidence. However, lingering concerns about US tariffs and uncertainty surrounding a pre-Federal Election budget may temper spending.
A weak retail sales performance over the next two months would bolster the case for a second consecutive rate cut, which many households are hoping for.
AU GDP (Wednesday)
Quarterly Gross Domestic Product (GDP) figures will be released on Wednesday. While monthly retail sales data has been uninspiring, a broader view of fourth-quarter GDP may offer a more positive outlook.
Household consumption is expected to be a key driver of GDP alongside strong public demand supported by tax cuts and easing inflation. Growth is projected at 0.5% for the quarter.
Residential construction and business investment also appear to be improving following a prolonged period of weakness in housing supply and construction activity.
Further rate cuts and moderating inflation will enhance consumer spending power, potentially driving GDP figures higher in the coming months.
BTC and crypto performance
Cryptocurrency markets will be in focus this week following President Donald Trump’s announcement of a strategic crypto reserve. This follows last week’s market sell-off, triggered by the largest cryptocurrency heist in history and the implementation of US tariffs. Investor sentiment has weakened, leading to increased volatility.
Trump’s presidency was always expected to be pivotal for the crypto sector and recent developments highlight how quickly the market can shift.
While last week’s concerns persist, the market appears willing to move past them for now. Given Trump’s vested interest in the sector, similar market fluctuations could continue.
The recent Bybit hack, involving the theft of approximately A$2.4 billion in Ethereum tokens, further rattled investor confidence.
Bitcoin and Ethereum suffered price declines, with altcoins such as Solana and Dogecoin experiencing sharper drops. Meanwhile, with Trump’s tariffs on Mexico and Canada confirmed, uncertainty persists as the tariff pause ends.
Crypto market sentiment has recovered slightly from last week’s 'extreme fear' to 'fear' territory, buoyed by Trump’s weekend announcement.
Bitcoin hit a three-month low last week, dropping below US$90,000 for the first time since November, and briefly fell below US$80,000 on Friday. However, historical trends suggest such volatility is typical of bull markets.
Bitcoin remains up more than 30% over the past year, reinforcing the importance of a long-term perspective amid short-term price swings.