Macroeconomics: The Day Ahead for 18 February 2026

A busy day for statistics has Japan’s January Trade Balance, Australian Q4 Wages and UK CPI and PPI to digest ahead of a run of current (Industrial Production, NY Fed Services) and catch up (Durable Goods Orders, Housing Starts, TIC Portfolio Flows). The January FOMC minutes top the events schedule, with the RBNZ holding its policy rates as expected overnight, with various ECB speakers, While Glencore tops the day’s earnings run that also includes a raft of Canadian miners, Orange and Occidental Petroleum. All eyes remain on the US/Iran talks, along with those on ending the war in Ukraine, and while the game of ‘whack a mole’ on AI impact on software and other companies appears to be taking a breather, it will more than likely remain a source of volatility.

** U.K. – January CPI, PPI **

As expected CPI fell -0.5% m/m, pushing down the y/y rate to 3.0%, with the freezing of railfares and lower petrol prices seeing Transport contribute -0.25 ppt to the fall, with seasonal falls in Household Goods and Clothing & Footwear, along with Restaurants/ Hotels accounting for the rest of the fall. Services Prices fell less than expected to 4.4% y/y, which will likely keep the MPC’s hawks wary of further rate cuts. But the drop in inflation is set to accelerate in coming months to well below the 2.0% target by June. PPI Input rose 0.4% m/m as expected, but Output was flat m/m against a forecast of 0.2%, showing little in the of pass through. The latest Brightmine survey on UK wages reinforced the impression that labour demand is at an inflection point as also by other employment / wages surveys, and that one would be well advised to see offical labour data as something of a lagging indicator.

** U.S.A. Jan Industrial Production, Dec Durable Goods Orders

– The unexpected strength in both Manufacturing Payrolls & Hours and ISM survey predicates forecasts for a solid 0.4% m/m increase in both Industrial Production and Manufacturing Output, with the risks skewed to the upside, and headline production likely to get an extra boost from unseasonably strong electricity output. The picture may be rather uneven across sectors, underscoring the K shaped profile of US GDP overall. Durable Goods Orders are seen down -2.0% m/m, though the core Non-defence Capital Goods ex-Aircraft is forecast at a steady 0.4% m/m. Given a four year high for the Manufacturing ISM Orders sub-index, the recent strength should persist, and notably this strength is not all AI related with the ISM survey highlighting strength in machinery, chemicals, transport and food/beverages.