Week Ahead: Mixed stocks and plethora of data

Financial markets will digest a mix of drivers and the new Lunar New Year in the days ahead, after a relatively quiet past week with stock markets treading water, while bond yields have moved lower despite the stronger US employment report.

Stock investors will eye Thursday’s Walmart earnings after the supermarket giant hit the $1 trillion market cap mark. The retailing behemoth is a bellwether for the US consumer and comes after mixed recent data. US retail sales were unexpectedly flat, potentially setting consumer spending on a slower growth path heading into 2026, but we recently also got a surprisingly strong payrolls report for January which eased some concerns about economic weakening.

Of course, stock indices may appear relatively steady, but that masks a lot of volatility within sectors brought about by the ongoing rotation either out of tech, or more recently within tech and AI-impacted stocks. Last week saw AI disrupt tech itself with the ‘buy the dip’ mentality seemingly exchanged for a ‘sell now, ask questions later’ one.

The new concern is no longer if AI is overhyped, but that its real-world impact may be larger and faster than many thought, and also more economically deflationary than previously anticipated. This is a big question but for now, selectivity is the key as funds indiscriminately sell areas of the market.

Elsewhere, mid-month generally means a UK data dump which includes the all-important wages, jobs, and inflation figures, as well as retail sales. It comes against the background of a hotter-than-expected previous inflation print but a central bank expecting quite a sharp drop in prices pressures in the months ahead. The chance of a March rate cut by the BoE is currently high around 75%+.

In Brief: major data releases of the week

Tuesday, 17 February 2026

UK Jobs: Expectations are for further signs of cooling in annual earnings and deterioration in the labour market. Governor Bailey recently stressed the importance of wage growth. Softer data could seal a rate cut, which is already strongly favoured by money markets, at next month’s BoE meeting.

Wednesday, 18 February 2026

RBNZ Meeting: The bank will leave the OCR on hold at 2.25%. Fresh interest rate projections are likely to be pulled forward, signalling the chance of OCR hikes beginning December of this year versus the prior early 2027. The stronger economy and elevated inflation are likely to be acknowledged. But ongoing excess capacity and tighter financial conditions should offset this and mean steady rates for some time.

UK CPI: Analysts forecast the headline rate to ease to 3% from 3.4%, core to 3% from 3.2% and the all-important services to 4.3% from 4.5%. The BoE sees the inflation outlook lower in the next six months, primarily due to softer energy prices. The big decline is predicted in April.

FOMC Minutes: Attention will be on the statement tweaks, which were more positive around the economy and labour market. Any hints on the neutral rate for policy will also be in focus. This meeting came before the recent NFP and CPI data releases.

Thursday, 19 February 2026

Australia Jobs: Expectations are for a headline print of 20k, after the prior 65k. Unemployment is forecast to remain at 4.2%. It was a volatile but solid finish for the employment change data. This highlights the strength in the economy, though seasonal volatility can impact the figures.

Friday, 20 February 2026

Global PMIs: Services are gathering increased momentum as price pressures continue to ease, while manufacturing remains a drag on economic activity. New orders and employment sub-indexes typically act as good leading indicators.

US Core PCE, GDP: The Fed’s favoured inflation gauge is forecast to tick up one-tenth to 0.3% m/m and 2.9% y/y, so still elevated and the above the Fed’s 2% target. Q4 GDP is expected to print at 3%, down from the hot 4.4% but still solid.

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