Josh Gilbert, Market Analyst at eToro, shares his three things to watch in Australia in the coming days.
BYD earnings (Monday)
If you’re on the roads in Australia, you’ve probably noticed an increase in BYD vehicles over the last couple of years. Long regarded as a lesser rival to Tesla, significant shifts across markets – and a growing negative public sentiment towards Tesla – has laid the groundwork for BYD to turn its latest innovation into a breakthrough moment. Today’s earnings will likely reflect that optimism in the EV manufacturer’s outlook.
That innovation is BYD’s Super e-Platform, which will provide charging speeds twice as fast as Tesla’s fastest superchargers. Range and charging times are the key hurdles for the EV industry. By unveiling a vehicle that can now be charged as quickly as a gas vehicle is refuelled, BYD is seriously stepping up its game and resolving one of the biggest pain points for would-be buyers.
With US tariffs throwing plenty of uncertainty into the market, investors will be looking beyond Wall Street for more diversification in their portfolios. China’s trade war resilience makes a government-supported EV manufacturer with a history of rising demand and impressive tech innovation a compelling choice for many investors.
The numbers support this. BYD sold 322,846 EVs in February, up 7.4% vs. January and nearly 164% per cent from a year earlier. The EV and battery giant sold 67,025 overseas, a third straight record high, up 1% vs. January and 187.8% vs. a year earlier. In short, it would be surprising to see anything but a positive wrap from the company today.
Federal budget (Tuesday)
Here we go - the Australian Federal Budget will be announced this Tuesday night against a pretty tough backdrop. It’s an election year, after all, and after back-to-back surpluses, the expectation is this year’s numbers will come in as a deficit.
Some of this can, of course, be attributed to reservations around global economic turbulence, largely due to sweeping US tariffs and a highly unpredictable outlook on markets.
Presubmissions from key interest groups have been telling. There is a big push for sweeping superannuation reform ahead of PayDay super coming into effect next year, and SMB advocates also want to see more for local enterprises after last year’s underwhelming acknowledgement. Failure to tick a few boxes for either of those interest groups will create difficult conditions for Labor when the Prime Minister finally calls the election date.
The confirmation of an all-but-assumed deficit will likely hurt ASX backers in the days following Tuesday’s announcements. For crypto investors, however, last Friday’s announcement that Labor intends to introduce better regulation for the crypto industry could stoke optimism that we are heading towards greater institutional support within Australia. Depending on how that factors into a broader vision for crypto in the budget, if any, means we may see longer-term positivity as a result.
AU monthly inflation (Wednesday)
Last month, the CPI indicator rose 2.5% in the 12 months to January, with analysts predicting that this week’s CPI report on March 26 will show a slowdown to 2.4% in the 12 months to February. Should this come to fruition, it’s a sign disinflation is beginning to resume following January’s pause, remaining in the lower half of the RBA’s 2-3% target range.
While this data may not be enough to encourage another rate cut at the Reserve Bank’s April meeting, it’s showing that inflation is continuing in the right direction - and should March’s CPI data show further cooling, it certainly improves the chances of a May rate cut.
The expectations for a May rate cut have already grown following last week’s job data, with the market now seeing a 75% chance of a cut. There has been an expectation for the AU job market to weaken for sometime, and this is an early sign of that, but the labour market is still healthy. The jobs number came in much lower than forecast while the unemployment rate remained steady at 4.1%.