Macroeconomics: The Week Ahead: 23-27 February 2026

 

The fall-out from Friday’s US Supreme Court (SCOTUS) ruling striking down IEEPA ‘reciprocal’ tariffs on the grounds of the President acting beyond his authority, the then hastily imposed 15% ‘global tariff’ (limited to 150 days) on the follow, the reaction from key trading partners such as the EU, Canada and Mexico, domestic claims for tariff refunds and the fiscal impact assessment will cast a long shadow over the week, which also sees the annual State of the Union address on Tuesday night. The spectre of a US military strike on Iran remains a very real risk, and some might argue that the risk may have risen as a result of the SCOTUS ruling, given the US administration will be looking for a ‘win’, particularly as the end of March meeting with Chinese President Xi looms in the headlights. However, a conflict with Iran would not sit well with US voters in the context of November’s mid-term elections. US AI/tech sector bellwether Nvidia reports its Q4 earnings on Wednesday, with US retailers and Canadian banks also featuring on the schedule. Statistically, the week is heavy on monthly activity surveys (e.g. German Ifo, US Consumer Confidence, French Business Confidence) along with US PPI, CPI in Germany, France, Japan and Australia; Canadian and Indian Q4 GDP/GVA; Australian Q4 CapEx and Construction Output providing the data highlights. China holds its monthly Loan Prime Rate fixings (seen unchanged), while rates are seen on hold in South Korea, down 25 bps in Hungary and Israel, and there will also be a plentiful slate of ECB, Fed (many speaking at the annual NABE conference), BoE and BoJ speakers. In the commodity sector, the week has a raft of energy sector earnings (e.g. E.on, BASF, Engie, Eni i.a.), the BMO Capital Markets metals & mining conference in Florida, along with the Paris International Agricultural Show, Agri-Food Europe in Amsterdam, the Commodity Classic in San Antonio, and the week ending India International Bullion Summit.

 

U.S.A.: the various regional Fed surveys, Wholesale Sales, Construction Spending and FHFA & CS Cotality House Prices will likely be little more than statistical roadkill for markets, which are likely to focus on Tuesday’s Consumer Confidence and Friday’s January PPI. After an unexpectedly sharp 9.7 pt fall in January to a cyclical low of 84.5, paced by a slide in Labor Differential (Jobs ‘Plentiful’ minus ‘Hard to Get’) to 3.1 from 8.4, Consumer Confidence is seen rebounding modestly to 87.0. Better official statistics on inflation and labour demand (though mostly in healthcare) may simply not tally with households’ perceptions, above all in a K-shaped economy, as such the combination of this and increasingly frequent and large revisions could result in an outlier relative to the consensus. Friday’s PPI is expected to rise 0.3% m/m on both headline and core, but thanks to benign base effects, this would see headline y/y drop 0.4 ppt to 2.6%, and core drop 0.3 ppt to 3.0% -there are upside risks from airfares, but the fact that December saw unusually strong increases in goods prices, which may have pre-empted some of the annual increases normally seen in January, and a rise in Portfolio Management fees (which feed into the PCE deflators) that was higher than implied by equity market performance, imparts some downside risks. In terms of this week’s Fed speakers, all eyes will be on Waller, after arch dove Miran signalled a shift to neutral last week.

 

Eurozone/UK: the final readings for Eurozone January CPI are seen unchanged at 1.7% y/y headline and 2.2% y/y core, though the focus will be on Friday’s provisional readings for HICP in Germany, France and Spain. French CPI is expected to remain low at 0.7% y/y, though up on January due to energy prices (auto fuel, & base effects on utilities, by contrast, Spain will see a modest dip thanks to benign energy price base effects, while Germany is also expected to see a slight fall on the back of food price base effects. None of which is going to prompt any change of views (market & ECB) on a steady policy outlook, indeed the debate around one whether Lagarde may stand down early to allow current EZ leaders to parachute in a ‘suitable’ replacement, rather than running the risk of confrontation about a successor with a potential ‘far right’ regime in France in 2027. All of which is antithetical to the principle of ECB independence, though as former Bundesbank Poehl once noted, ‘central banks are only as independent as is politically expedient’. One might add that there are far more important reform issues on the EU / Eurozone’s long to do list than this, banking union perhaps being the most significant given the increasing tensions with the US. The UK only has CBI Retailing, GfK Consumer Confidence and the Lloyds Business Barometer surveys this week, with the GfK and Lloyds measures seen edging higher to -15 and 46 (from  -16 and 44) respectively, but both will likely be overshadowed by the result of the Gorton and Denton by-election on the same day.

 

Canada: Q4 GDP is forecast to fall -0.2% q/q SAAR, after an unexpectedly strong jump of 2.6% in Q3, and also fitting with weak monthly readings for October and November, with December GDP seen edging up 0.1%, as well as BoC projections of a flat reading for the quarter. In the detail, the extent of the negative contribution from Net Exports and Inventories are likely to be the swing factors, offset by marginally positive contributions from both Personal Consumption and Business Investment and some strength in government spending.

 

Japan: Tokyo CPI is forecast to edge down 0.1 ppt to 1.4% y/y, with the core ex-Fresh Food seen dropping 0.3 ppt to 1.7% as a fresh set of energy subsidies bear down on prices, though the core-core measure  is expected to only edge down to 2.4%, but overall giving the BoJ some policy operating leverage to avoid consecutive rate hikes. Industrial Production is optically expected to surge to 5.6% y/y from December’s -0.1%, but this will primarily be due to Lunar New Year timing effects, prompting some front-loading of production to facilitate exports to China ahead of the LNY holiday. The underlying picture is less robust, though still likely supported by AI related demand for semiconductors and improving auto exports. Retail Sales require some scrutiny given some downward pressure from a sharp drop in tourist arrivals from China, which appeared to account for the unexpectedly sharp -2.0% m/m drop in December, though the consensus looks for a 1.5% m/m rebound, but the risks look to be skewed to the downside.

 

Asia: Forecasts for Australian CPI look for a marginal easing in headline CPI to 3.7% y/y from 3.8%, and core Trimmed Mean CPI to be unchanged at 3.3%, in both cases well outside of the RBA’s 2.0-3.0% target range. It may be just enough for the RBA to hold rates at its March meeting, though at the same time signalling the potential for further rate hike(s). India’s GDP will shifted to a new base year of 2022-23 from the prior 2011-12, which gives additional scope for an outlier reading (risks downside), with the consensus anticipating Q4 to slow to 7.4% y/.y from Q3’s very robust 8.2%, and GVA to ease to 7.3% y/y from 8.1%. The question is about the extent to which the drag on GDP from punitive US export tariffs, will be offset by strong rural/agricultural output (benefitting from a strong harvest), sales tax cuts, the drop in inflation aiding domestic demand.

 

There are 55 S&P 500 companies reporting this week, with worldwide corporate earnings highlights as compiled by Bloomberg News likely to include: ACS Actividades de Construccion & Servicios, Aena SME, Agilent Technologies, Alcon, Allianz, Amadeus IT, American Tower, Argenx, Aselsan Elektronik Sanayi Ve Ticaret, Autodesk, AXA, Axia Energia, Axon Enterprise, Baidu, Bank of Montreal, Bank of Nova Scotia, BASF, Bayer, BeOne Medicines, Block, CIBC, Cheniere Energy, Cheniere Energy Partners, CoreWeave, Coupang, Dell Technologies, Delta Electronics, Deutsche Telekom, Diageo, Diamondback Energy, Dominion Energy, E.on, Emcor, Emirates Telecommunication, Endesa, Engie, Eni, EOG Resources, Erste Group Bank, Ferguson Enterprises, Ferrovial, Fomento Economico Mexicano, Fortescue, Fresenius SE, Ftai Aviation, Haleon, Heidelberg Materials, Holcim, Home Depot, Hong Kong Exchanges & Clearing, HSBC Holdings, Iberdrola, International Consolidated Airlines Group, Intuit, Keurig Dr Pepper, Keysight Technologies, Leonardo, Loblaw, London Stock Exchange, Lowe’s, Malayan Banking, Medline, MercadoLibre, Munich Re, National Bank of Canada, Novonesis Novozymes B, NRG Energy, Nu Holdings Cayman Islands, Nvidia, Oneok, Overseas-Chinese Banking, Pembina Pipeline, Poste Italiane, Prysmian, Public Service Enterprise Group, Quanta Computer, Realty Income, Rocket, Rocket Lab, Rolls-Royce, RBC, Saint-Gobain, Salesforce, Sandoz, Schneider Electric, Sempra, Snowflake, Standard Chartered, Sun Hung Kai Properties, Swiss Re, Synopsys, Telefonica Brasil, TJX, TKO Group, Toronto-Dominion Bank, Trip Group, UCB, United Overseas Bank, Veolia Environnement, Vici Properties, Vistra, WEG, Woodside Energy, Woolworths Group, Workday, Zoom Communications, Zscaler.