Macroeconomics: The Week Ahead: 16-20 February 2026

The new week will see lower trading volumes as a rare confluence of East Asia’s Lunar New Year holidays, Carnival in Europe and South America on Monday & Tuesday preceding the start of Lent and in Islamic countries the start of Ramadan on Wednesday, while the US and Canada are closed on Monday for President’s Day and Family Day respectively. The data schedule is quite light in terms of current US statistics with most of the data being for December, including Personal Income & PCE, as well as the advance reading on Q4 GDP, and the first of the Feb regional Fed manufacturing surveys. Japan looks to Q4 prov. GDP, Trade, Machinery Orders and National CPI, the UK to CPI, labour data and Retail Sales, and G7 and India ‘flash’ PMIs are also on tap. January Fed minutes, corporate earnings from many major mining companies including Anglo American, BHP, Glencore and Rio, along with Walmart, and Friday bringing a US Supreme Court session which may or may not offer a ruling on tariffs, while the India AI Impact Summit lists both Nvidia CEO Huang and Alphabet CEO Pichai amongst its keynote speakers. Central bank policy meetings are expected to see the RBNZ and Bank Indonesia on hold, while Philippines’ BSP expected to cut rates 25 bps after Q4 GDp roved to be disappointing, with plenty of Fed and ECB speakers also on tap. Elsewhere the USDA will publish its acreage and ending stocks outlook for Corn, Soybeans and Wheat, and Amsterdam hosts its Cocoa week. Geopolitical tensions and trade tensions continue to cast a long shadow, as more meaningful questions emerge on the impact of AI, most notable in the current market game of ‘whack a mole’ on companies and sectors that may suffer adverse impacts. That said, the seemingly voracious appetite for Mag7 ‘hyperscaling’ corporate issuance, albeit with widening spread concessions, appears to know no bounds given the demand seen for last week’s $32 Bln total issuance from Alphabet. But if estimates are correct and total hyperscaler issuance does reach $400 Bln in 2026 vs. a total of $165 Bln in 2025, this may become more challenging as the year progresses. It is worth taking a look back at the ‘hyperscaling’ of the 1990s and 2000s by telecom companies as they looked to build out internet and mobile phone capacity for some historical context.

** U.S.A.: As with last week’s mixed signals from Payrolls, Retail Sales and CPI, this week’s crop of data that includes advance Q4 GDP, slightly stale December data on Personal Income, PCE, Durable Goods Orders, Trade and Home Sales, and more timely Industrial Production and array of housing and manufacturing surveys will likely highlight continued divergences. Q4 GDP will have to be seen in the context of the record long government shutdown, with the consensus looking for 3.0% SAAR, following Q3’s 4.3%, with Personal Consumption easing to 2.6% from 3.5%, and core PCE deflator easing to 2.6% from 2.9%. As ever Final Sales to Domestic Buyers (effectively GDP ex-Trade & Inventories) will offer a more sanguine view of growth trends, likely slowing to below 2.0% from Q3’s 2.8%, though the shutdown disruption to govt defence spending may account for much of that decline, along with some moderation in business investment in equipment from a ‘hot’ 5.2% SAAR in Q3. Monthly Personal Income and PCE data for December will unusually be released at the same time, though forecasters see only a modest dip in PCE to 0.4% m/m from 0.%, with Personal Income steady at 0.3% m/m, while headline and core PCE Deflators are expected to pick up to 0.3% m/m from 0.2%, with y/y rates little changed at 2.8% and 2.9%. 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, and this along with Thursday’s Goods Trade Balance (Dec) may prompt some last-minute tweaks to GDP forecasts. Be that as it all may, Wednesday’s January FOMC minutes are likely to highlight that the broad majority excepting Miran and Waller anticipate an extended pause to further rate cuts, emphasizing the need for inflation to see a further sustained fall, and noting that labour demand has not deteriorated nearly as much as some had feared, and that growth has been robust (though uneven).

** U.K.: a busy week for major UK data has labour and inflation indicators, along with Retail Sales. Headline HMRC Payrolls are seen down a further -20K (vs. Dec -43K), though the focus remains on private sector which have fallen in 16 of the past 18 months (see chart). Recent surveys suggest an upturn in labour demand, though this may take one or two months more to show up in official data, though should show up in the latest Vacancies readings. Average Weekly Earnings are expected to show the ex-Bonus measure easing to 4.2% y/y from 4.5%, and more importantly Private sector ex-Bonus wages down to 3.4% y/y from 3.5%, which has prompted the tentative shift in BoE views on the balance of risks between demand and inflation. A sharp m/m drop of -0.5% m/m in CPI paced by food, energy, education and ever volatile airfares is expected to drive headline y/y down to 3.0%, which will accelerate down in coming months to well below the 2.0% target by June, though a more 0.2 ppt dip in Core and Services CPI to 3.0% and 4.3% y/y respectively, which will keep MPC hawks wary about the pace of any further rate cuts. PPI Input is seen up 0.4% m/m paced by rises in commodity and energy prices, though PPI Output is expected to post only a modest 0.2% m/m rise. Friday’s Retail Sales are forecast to dip to 0.2% m/m headline but hold steady at a moderate 0.3% m/m ex-Auto Fuel, suggesting that consumer spending is showing some modest resilience after the bout of pre-Budget anxiety. While political uncertainty remains substantial, the UK economy may well prove to be one of the better performers relative to media and market narratives in 2026.

** PMIs/Surveys: Eurozone PMIs have been divergent for a protracted period, though the Manufacturing PMI is expected to reach 50.0 after only one reading above that mark in the past 3 years, likely boosted by some improvement in Export orders as well as defence related, while the Services PMIs is expected to rebound to edge back up after 3 straight declines (with very notable volatility in French and German readings). UK PMIs are seen easing from unexpected strength in January but remaining solid at 51.5 for Manufacturing and 53.5 on Services. In the US both Manufacturing and Services are expected to signal a steady expansion relative to January at 52.3 and 52.9 respectively, and Japan’s PMIs should get a boost from modestly expansionary levels in coming months, though this will likely show up more in the final readings.

** Japan: There may be rather more attention on Japan’s new parliament as it reconvenes for the first time since last weekend’s resounding victory for PM Takaichi than on this week’s run of major data, which includes Q4 GDP, National CPI, Trade and Private Machinery Orders. Q4 GDP is expected to have posted a solid 0.4% q/q rebound after sliding -0.6% in Q3, led by a sharp 0.6% bounce in Business CapEx after a prior drop of -0.2%, but other components are expected to be less impressive with Private Consumption seen up 0.1% q/q, Net Exports adding just 0.1 ppt, and offset by a -0.1 ppt contribution from Inventories. Tourism should be a positive contributor, given a weak JPY, but may have been hit by the bilateral political tensions between China and Japan. National CPI is seen falling to 1.6% yh/y, the first sub 2.0% reading since March 2022, with core CPI seen at 2.0% y/y, while ex-Food & Energy remains elevated at 2.7%, though down from December’s 2.9%. If forecasts are correct, the combined GDP and CPI data would offer some support for the BoJ to maintain a cautious path for further rate hikes, but ultimately it will be the JPY’s reaction to the new government’s policy agenda and implementation that proves to be key fort he BoJ’s rate trajectory over 2026.

** Elsewhere Canada’s CPI is forecast to rise a very average 0.2% m/m, leaving the y/y rate unchanged at 2.4% y/y, with core measures seen little changed at 2.5% and 2.6%. Adverse base effects and rising gasoline prices are likely to be the key factors, though the former will turn very benign for the rest of the quarter and later in the year. A very uncertain outlook for US tariffs, following last week’s US Congress vote, chatter about the White House considering abandoning the USMCA trade agreement, rather than renegotiating it (as is due to happen this year) will likely the Bank of Canada looking to keep its policy powder dry until some of these uncertainties are resolved.  Australia’s RBA continues to maintain a hawkish policy bias, and will be closely watching this week’s Q4 Wages that are expected to remain elevated at unchanged 0.8% q/q 3.4% y/y, and January’s labour data, which are forecast to show Employment growth slowing to 20K after surging 65.2K in December, though the median forecast looks to be a case of agnosticism pacing expectations of a mean reversion.

** There are 53 S&P 500 companies reporting this week, with worldwide corporate earnings highlights as compiled by Bloomberg News likely to include: Air Liquide, Airbus, Amrize, Analog Devices, Anglo American, Anglogold Ashanti, Antofagasta, BAE Systems, BHP Group, BlueScope Steel, Booking, Bridgestone, Cadence Design Systems, Carvana, CenterPoint Energy, Coca-Cola Europacific Partners, Consolidated Edison, CRH, Danone, Deere, Devon Energy, DoorDash, DTE Energy, EBay, Energy Transfer, EQT, Expand Energy, Extra Space Storage, FirstEnergy, Garmin, Glencore, Gold Fields, Goodman Group, Hochtief, Insmed, Kenvue, Kinross Gold, Live Nation Entertainment, Medtronic, Moody’s, Naturgy Energy, Nestle, Newmont, Nutrien, Occidental Petroleum, Orange, Orlen, Palo Alto Networks, PPL, PTT, Quanta Services, Republic Services, Rio Tinto, Rio Tinto, Samsung Life Insurance, Saudi Telecom, Sika, Southern, Targa Resources, Teck Resources, Telstra, Texas Pacific Land, Transurban Group, Vulcan Materials, Wal-Mart de Mexico, Walmart, Wesfarmers, Zurich Insurance.