Fin-X Weekly 2nd March 2026

Global markets started the week on the back foot following a new US global tariff, before tensions escalated in the Middle East and energy prices rose.

Bond yields eased over the week, even as US producer price data surprised on the high side. Australian inflation remained above target, but the trimmed mean sat closer to the band. The RBA governor discussed the current difficulty in setting policy.

Australian equities extended gains supported by earnings and a continued rotation out of US technology names, despite strong results and guidance from Nvidia.

Besides action in the Middle East, the most important events this week include Australia’s Q4 GDP, US jobs data and activity surveys, eurozone inflation, and China’s National People’s Congress and PMI releases.

Last week began with the end of Lunar New Year celebrations and a weak market impulse following the announcement of the new American 15% global tariff.

There was little to glean on consequential policy from the American President’s State of the Union speech. But oil prices still rose a further +1.6% as investors waited for the outcome of US negotiations with Iran. By Sunday, Israel and the US had begun pre-emptive strikes aimed at forcing regime change. Any closure of the Straits of Hormuz would likely place further upward pressure on energy prices.

Earlier in the week, bond yields turned lower, supporting interest-sensitive global property and infrastructure. The US 10-year Treasury yield finished the week below 4.0%, even after surprisingly strong producer price inflation data on Friday. Headline PPI rose +2.9% yoy, while core PPI excluding food and energy increased +3.6% over the year to end-January.

Australian CPI also printed on the high side in January. At +3.8%, headline annual inflation sat above target and above consensus expectations, but it has not yet shown signs of reaching the mid-year highs in the RBA’s February forecasts. The detail reinforced that household budgets remain under strain from housing-related costs, including a +32.2% rise in electricity prices. Trimmed mean inflation of +3.4% yoy was closer to the 2.0%–3.0% target range. Moreover, higher costs of essentials and base effects both suggest inflation could return to target even without the May rate rise implied by market pricing.

Governor Michele Bullock retained a cautious stance in a fireside chat on Wednesday evening, saying that judging the economy is “a little bit more difficult” now than in earlier periods when policy was being tightened. In the post-COVID period, when inflation was heading to 8.0% and interest rates were at zero, it was clear that policy needed to be tightened quickly, she said. “Now we’re in a situation where the labour market, we think, is a little bit tight, inflation is a bit elevated, I don’t think it’s taking off again,” she said. “We thought the economy was in balance, maybe it’s a little tighter than we thought. It’s not like we’ve got a situation where it’s very clear what we have to do,” Ms Bullock said, adding that “people have to be patient.”

Q4 GDP is due for publication this week and is expected to tick up by +0.1% to +2.2% yoy.

Australian equities continued to edge higher. The S&P/ASX 300 has been grinding into fresh record territory, driven mainly by strong earnings from cyclicals and resources, alongside sharp single-stock moves on results. Profits are up +10.4% from a year ago, with 255 of 282 index members having reported, according to Bloomberg.

Ramsay Health Care added more than +11.5% after delivering a stronger-than-expected first-half profit result, improving sentiment towards large-cap private hospital operators.

In contrast, several consumer-facing names underperformed after reporting. Qantas fell -6.2% and Coles declined -4.5% following earnings misses, while Harvey Norman sold off -9.4% on weaker results and guidance.

Block rose +27.2% and was among the largest individual movers after it announced substantial workforce cuts and AI replacements, which the market read as supportive of future profit margins.

More broadly, a rotation out of expensive global technology into commodities and other value and cyclical sectors further supported Australian shares.

Nvidia’s much-anticipated results were announced. The company reported fiscal fourth-quarter revenue up +73.0% to $68.1bn from a year earlier, beating analysts’ estimates of roughly $66.2bn. It also issued upbeat guidance, with fiscal first-quarter revenue expected at $78.0bn, above the analysts’ forecast of $72.6bn. Even so, the share price slipped -6.7% in US dollar terms as concerns about the impact of AI persisted.

Alarms had begun ringing at the start of the week. On Monday night, Wall Street sold off after an “AI doom” Substack post by Citrini Research went viral, imagining what the world might look like in June 2028.

Nvidia CEO Jensen Huang later pushed back on the AI-related sell-off. “I think the markets got it wrong,” he said, disputing fears that AI agents will cannibalise the enterprise software industry. Instead, he argued that agentic AI will use software tools more intensively, lifting efficiency. The comments spoke to a central investor concern: whether the massive run-up in spending on AI hardware can remain sustainable as use cases broaden and the economics of deployment become clearer.

Even with that reassurance, the market continued to pressure parts of the established software and services complex. IBM was the latest legacy business to be hit, with shares down -14.0% after Anthropic said its Claude Code tool could modernise systems that run COBOL. Although COBOL was developed in the late 1950s, it remains widely used in business data processing. It is a dominant code system in payment processing and retail transaction systems, including an estimated 95.0% of ATM transactions in the US, according to Anthropic. Anthropic argued this makes COBOL a prime target for cost-efficient AI disruption. “Hundreds of billions of lines of COBOL run in production every day, powering critical systems in finance, airlines, and government. Despite that, the number of people who understand it shrinks every year,” Anthropic wrote in a Monday blog post. “AI excels at streamlining the tasks that once made COBOL modernisation cost-prohibitive”.

Anthropic then became a separate focal point as it was later declared a supply-chain risk after President Donald Trump directed US government agencies to stop using its products. Anthropic had insisted that Claude not be used for mass surveillance against Americans or in fully autonomous weapons operations. Defence Secretary Pete Hegseth ordered the Pentagon to bar its contractors and their partners from any commercial activity with Anthropic, giving the company six months to hand over AI services to another provider. Anthropic said it will challenge any supply-chain risk designation in court, stating that being labelled a supply-chain risk “would both be legally unsound and set a dangerous precedent for any American company that negotiates with the government.”

OpenAI said on Saturday that it has signed a deal with the Pentagon to replace Anthropic.

This week, investors are likely to continue following events in the Middle East closely.

In Australia, attention turns to Q4 GDP on Wednesday, alongside updated household spending and trade figures.

In the US, the monthly labour report is due on Friday, with unemployment expected to remain at 4.3%.

ISM surveys, retail sales and the Federal Reserve’s Beige Book are also scheduled, as are eurozone inflation prints.

China’s National People’s Congress begins on Wednesday, where the 15th Five-Year Plan is expected to be unveiled. The official and RatingDog PMIs are also scheduled for release.

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