Big bank earnings + RBA decision headlines another important week

The Morning Wrap

Livewire Markets

Welcome to Charts and Caffeine - Livewire's pre-market open news and analysis wrap. We'll get you across the overnight session and share our best insights to get you better set for the investing day ahead.




Source: Yahoo Finance


US$3 trillion: The one-year loss experienced by seven of the most recognisable companies in the world: the US big tech fraternity. (Source: CNBC)
Source: CNBC


Source: Forex Factory

Buckle up, folks. If you thought last week was big, then think again.

Not one, but three huge central bank meetings next week. Tuesday is RBA day and everyone is keen to find out whether this pivot will stick. Thursday morning brings the Federal Reserve decision, and everyone wants to know if this will be the last 75 basis point hike from a central bank that has said repeatedly it will stop at nothing to quell inflation. The Bank of England comes Thursday evening. Everyone says it will be a unanimous vote, but which way will the gum drop fall?

In other data, Eurozone CPI is out on Monday (will it be another 10-handle?). We also get labour force data from the US and New Zealand, and both will provide good clues as to the direction of monetary policy in those jurisdictions.


Speaking of the Federal Reserve, I figure we should discuss the tightening path they have been on - and what a path it's been. A 75 basis point hike is all but priced in for this week but a lot of people are still asking the inevitable question:

Will they pivot after this meeting?

Here is a chart (and accompanying words) from Robin Brooks, Chief Economist at the International Institute of Finance which suggests that they have already missed their window to pivot.

"We've been warning that the Fed is overtightening and that housing is in full-on recession. So here is residential fixed investment in the US (blue) compared to the 2008 Global Financial Crisis. We're definitely tumbling now, especially since we never had the housing bubble we had then," Brooks said.

2022 is not 2008, and that suggests the scars of 2008 have created a new and different problem for the Fed. (Source: IIF)


It's big bank full-year reporting season - kicking off with ANZ and Macquarie Group last week. Westpac and the NAB will drop their results on Monday and Wednesday respectively. As has been the case with the banks through this cycle, it's all about how management responds to rising costs and more competition while trying to finally take advantage of rising interest rates.

ANZ's result spooked the market last week when management flagged higher costs were likely to weigh on future results. Here are the brokers' hot takes:

  • Citi kept its buy rating and topped up on its price target, saying better asset quality will keep it on top.
  • Credit Suisse has upgraded its FY23 earnings forecast by 2% but cuts FY24 forecast by 6%. The price target has been trimmed.
  • Macquarie is predicting the bank can deliver 15% revenue growth in FY23. The target was raised by 50 cents to $26/share.

and the one rating change...

Morgan Stanley wasn't impressed by the cost guidance. The analyst believes there will be less scope for further EPS upgrades and the reinvestment burden should weigh on margins. It's now an equal weight (hold) but keeps its price target of $26.90/share.

Macquarie Group's results were released Friday - and surprise surprise - they beat consensus estimates after laying the market low. And in news that won't shock anyone, they still have a conservative approach to capital. 

  • Citi is concerned by Friday's guidance, arguing three of the four main business divisions may not maximise its revenue opportunities. 

Hans Lee wrote today's report.


If you've enjoyed this edition, hit follow on this profile to know when we post new content and click the like button so we know what you enjoy reading.

If you have a chart and/or a stat that you would like to see featured in a future edition of the newsletter, drop us a note at

Livewire gives readers access to information and educational content provided by financial services professionals and companies (“Livewire Contributors”). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.

2 stocks mentioned

1 contributor mentioned

The Morning Wrap
Markets Wrap
Livewire Markets

Livewire and Market Index's pre-opening bell news and analysis wrap. Available weekday mornings and written by Chris Conway, Kerry Sun, and Hans Lee.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Please sign in to comment on this wire.