Zavier Wong, Market Analyst at eToro Group Ltd (Unlisted (US):ETRO), shares his three things to watch in Australia in the coming days.
AU unemployment
Thursday's January employment force data lands at a critical time, just two weeks after the RBA hiked rates to 3.85% in its first increase since November 2023.
December's result was unexpected with employment surging by 65,200, more than double the 27,000 expected, while the unemployment rate fell to 4.1%.
Expectations are for a much softer January print, with consensus pointing to around 10,000 jobs added and the unemployment rate ticking back up to 4.3%. That would not be surprising given the volatility in monthly data and the sheer size of December's gain. Job growth has been slowing through 2025 after a particularly strong 2024, and rising labour force participation continues to lift the bar for how many new jobs are needed just to keep the unemployment rate steady.
Even if Thursday's number does soften, the broader picture hasn't changed. The RBA has been clear that demand is running ahead of supply and labour market conditions remain tight. A weaker print may take some heat out of the rate hike debate in the near term, but it would take a sustained shift to meaningfully change the RBA's outlook from here.
BHP earnings
BHP's operational update in January already told us the production story, and it was a strong one. The focus now shifts to the financials, and there are a few key areas investors will be watching closely.
Consensus has first-half EBITDA at around US$14.7 billion, which would represent a solid result off the back of record iron ore shipments and upgraded copper guidance. But the real debate is around capital allocation. Net debt is expected to climb to around US$14.8 billion, and project Jansen’s capex has been revised up to US$8.4 billion roughly. We are now seeing the company enter its most capital-intensive period in a decade. That will likely mean another shift in its dividend payout, which has already fallen around 30% in the last three years.
That net debt story means the question marks around M&A will also continue. Despite failed approaches for Anglo American, Australia’s largest miner clearly has the appetite for large-scale deals, and with copper increasingly central to its long-term strategy, the question is whether another transformational move is on the horizon. Ultimately, BHP is spending big to build the next chapter of its business, and the tension between investing for the future and rewarding shareholders today is the key debate heading into this result.
JB Hi-Fi earnings
Ahead of Monday’s half-year earnings report, JB Hi-Fi’s shares were down around 23% over the past 12 months. Coming into this morning, investors were looking for reasons to be positive again, and the electronics & entertainment retailer provided, beating market expectations across profits, earnings and sales.
This wasn’t surprising, as momentum through the first quarter looked encouraging, with JB Hi-Fi Australia delivering 6% growth and New Zealand continuing to outperform. The second quarter was also supported by JB Hi-Fi's key promotional events like Black Friday and Boxing Day. Apple told us in its Q4 results that iPhone demand was unprecedented, delivering its highest sales number for iPhones ever, making mobile a key driver for the company too.
That’s not all positive news, though. When customers are buying more iPhones and laptops, these items carry thinner margins and fewer accessories and software, which are higher-margin. That means the overall profitability of each dollar of sales comes down, even if the top line is growing. Adding to that, the retail giant missed on January sales expectations, portending a tough retail environment ahead.
With rate cuts arriving in 2025, the macro outlook was looking supportive for JB, but with the RBA hiking rates early in 2026, that positivity is fading. Sales growth will likely moderate through the second half as the rate hike starts to bite and with January figures already weak off the mark, these results should give some pause to other retail stalwarts. That’s especially true given additional rate rises are not off the table.