Key takeaways:

• While the government recently tried to downplay hotter-than-expected inflation figures, the data suggests the RBA is behind the eight-ball and forecast to hike rates again

Economic Calendar and News

This week, the economic agenda is brimming with events that could sway markets, most notably the Reserve Bank of Australia’s (RBA) meeting on Tuesday.

The central bank is at a pivotal junction, as it contemplates interest rate adjustments amidst stubborn inflation. Experts anticipate a rate hike —the first since June— as the RBA seems poised to continue tightening monetary policy despite political pushback.

On Friday, rate hike expectations surged, with predictions for an increase of the cash rate from 4.1 percent to 4.35 percent climbing significantly. The likelihood of a rate rise now stands at 69 percent, a marked jump from the 57 percent chance priced in just a day earlier on Thursday.

Such a move could send ripples through the Australian equities market, potentially dampening investor sentiment as borrowing costs rise and consumer spending power is tested.

In the United States, a key economic indicator will be unveiled with the New York Fed’s quarterly report on household debt and credit. This data provides a snapshot of American families’ financial conditions and could influence perceptions of the economy’s health. Moreover, the latest consumer sentiment figures are due to arrive from the US, an important metric given its recent dip to near a five-month low.

Stocks on watch

Turning to individual stocks, the spotlight shines on Westpac (ASX: WBC) and NAB (ASX: NAB), as they prepare to disclose full-year earnings. Westpac’s results have released, showing a 26% increase in net profit and a final dividend of 72 cents per share, and NAB will follow on Thursday. The focus will be on their handling of bad debts, margins, loss provisions, and their capacity to sustain dividend payouts — a keen interest for shareholders.

Rate-sensitive REITs are also poised for investor scrutiny in light of the anticipated RBA rate decision. Companies like Goodman Group (ASX: GMG), Scentre Group (ASX: SCG), Mirvac (ASX: MGR), Charter Hall (ASX: CHC), and BWP Trust (ASX: BWP) could experience volatility as the market reacts to the changing interest rate environment.

Meanwhile, Xero (ASX: XRO), known for its cloud-based accounting software, is gearing up to share its half-year results until September’s end on Thursday. This release is particularly significant for tech stock enthusiasts, as it could provide insights into the sector’s resilience and growth trajectory.

Lastly, though the US earnings season is nearing its close, a few notable companies are yet to present their financial narratives. The diverse lineup includes Uber (NYSE: UBER), UBS (NYSE: UBS), Occidental Petroleum (NYSE: OXY), Rivian (NASDAQ: RIVN), and the entertainment behemoth Walt Disney (NYSE: DIS), all scheduled to report their quarterly results, which could shed light on various sectors’ performances and future outlooks.