Bloomberg Daybreak Weekend: US Jobs, Tech Earnings, Winter Olympics, and Japan Election Preview

US Economic Outlook and Tech Earnings

• 📊 The January US jobs report is anticipated to show subdued hiring, with economists forecasting around 70,000 non-farm payroll additions, a slight increase from the previous month.
• 💡 The unemployment rate is expected to remain stable at 4.4%, indicating a steady labor market, though the Fed is monitoring potential impacts of immigration policies and AI on employment.
• 📈 Big tech earnings are in focus, with expectations for Alphabet (Google) to show accelerating topline growth in search and YouTube, and strong performance from Google Cloud, potentially benefiting from their own TPUs.
• ☁️ Amazon's AWS is expected to show sequential acceleration in cloud growth, though supply constraints for AI compute capacity could be a factor.
• 💻 Advanced Micro Devices (AMD) is poised to exceed expectations due to strong AI infrastructure demand and deals with companies like OpenAI.

2026 Winter Olympics: Geopolitics and Sustainability

• ❄️ The 2026 Winter Olympics in Milan and Cortina, Italy, face challenges including geopolitical tensions, particularly concerning US ICE agents' involvement, and the need for sustainable venue development.
• 🏛️ While most venues leverage existing infrastructure to reduce costs, some new facilities have faced criticism, and concerns remain about the readiness of all Olympic sites.
• 🤝 Diplomatic tensions between the US and Europe may be highlighted, despite the Olympic ideal of unity, with discussions around security details and broader geopolitical alignments.
• 🌍 Climate change is a significant factor, with recent heavy snowfall aiding preparations, but the reliance on artificial snow and the long-term impact on ski tourism remain concerns.
• 💰 The games are expected to generate significant revenue and investment, with a focus on boosting Italy's infrastructure, such as new road and tunnel projects.

Japan's Snap Election and Economic Policy

• 🇯🇵 Prime Minister Fumio Kishida has called a snap election for February 8th, aiming to leverage high approval ratings and assert a stronger leadership identity.
• 📉 The ruling Liberal Democratic Party (LDP) faces voter dissatisfaction over inflation, prompting proposals like a temporary food tax cut to 0% for two years, a move with significant revenue implications.
• 🛡️ Kishida is expected to continue increasing defense spending, aligning with US calls for allies to ramp up their military budgets, targeting 2% of GDP.
• 👥 Concerns about immigration and the growing presence of foreign workers are influencing some voters, with discussions around regulations for foreign entry and property ownership.
• 📈 Tourism is seen as a key growth driver for Japan's economy, with a record number of foreign visitors in the past year.

Australia's Inflation and Monetary Policy

• 🇦🇺 The Reserve Bank of Australia (RBA) is closely watching recent inflation data, which showed a tick up, with the trimmed mean measure at 3.4% year-on-year, exceeding the RBA's 2-3% target band.
• ⚡ Key drivers of inflation include administered prices, such as electricity and school fees, which are influenced by government decisions, alongside market-driven inflation.
• 🏦 While a rate hike at the February meeting is not guaranteed, the elevated inflation figures may prompt the RBA to consider further tightening to ensure inflation returns to target.
• 📉 A potential rate hike could suppress private sector recovery, while a strong Australian dollar, influenced by interest rate differentials and commodity prices, may help dampen imported inflation.