It’s not been a good start to the week for right-wing politicians, with Brazilian president Luiz Inacio Lula da Silva winning a fourth term and Serbia’s Aleksandar Vucic losing to a student-led protest movement.
The Brazilian real is yet to trade, though a Brazilian ETF traded in Tokyo has shed almost 15%, reversing gains made when Senator Flavio Bolsonaro led in the first round of voting. Bolsonaro later refused to concede defeat, saying he would challenge the result.
Next up is Benjamin Netanyahu’s Likud party in Israel. All three of the right-wingers were supported by President Trump, whose party faces its own vote test next week with the midterms.
Otherwise, it’s been a guarded start in markets with Wall Street futures and most of Asia down slightly. Oil prices have eased somewhat, perhaps in part on reports Qatari mediators were in Tehran on Sunday as part of an effort to de-escalate regional tensions in coordination with the US.
Then again, Brent futures jumped over 6% last week to their highest weekly close since mid-2022 as Houthi attacks in Saudi Arabia stoked concerns over energy supplies.
Trump on Friday said the US may carry out another military operation against Iran, while Tehran has threatened reprisals including hitting submarine cables.
Such high energy costs mean central bankers meeting this week are likely to sound hawkish, even if they don’t tighten this time. Markets are wagering on hikes from central banks in Canada and New Zealand this week, while assuming the US Federal Reserve, Bank of Japan and the European Central Bank will stand pat for now.
Earnings highlights will include the hyperscalers Alphabet, Microsoft and Amazon, among one-third of S&P 500 companies reporting. Results from Intel and Sandisk also could influence the AI trade.
Consensus on Microsoft is for US$90.6 billion in revenue and an adjusted EPS of US$4.73, with Amazon at US$202 billion in revenue and EPS around US$1.97. Alphabet revenue is seen at US$128 billion and EPS of US$3.00.
In Asia, SK Hynix and Samsung Electronics both report this week. SK Hynix also said it will announce shareholder return measures on Wednesday, responding to a report that it is considering a special dividend of about 16 trillion won (US$12 billion).
