The Week Ahead

• Markets are heading into a pivotal stretch, with global focus on this week’s US Federal Reserve meeting and domestic attention firmly on Q4 inflation, both set against an unsettled geopolitical backdrop.
• Pricing across markets continues to suggest around a 60% chance that the Reserve Bank of Australia opts for a 25bp increase from the current 3.60% cash rate at its 3 February meeting, making tomorrow’s inflation print critical in shaping expectations.
• Australian rates have moved modestly, with 10-year government bond futures edging higher and yields easing from 4.87% to 4.84%.
• On the local data front, attention turns to NAB business confidence today. With sentiment having softened in recent months, markets will be watching closely for any read-through on capacity utilisation.