Week commencing 23 February 2026

ASX 200 sees growth as US markets stagnate

It was a turbulent week for United States (US) equity markets. Investors reacted to hawkish signals from the Federal Open Market Committee (FOMC) meeting minutes, unexpectedly strong economic data, and rising oil prices due to US-Iran tensions. Adding to the unease were sector-specific issues, notably after a large private equity fund halted quarterly redemptions, prompting concerns about liquidity and credit quality in the private lending space.

In stark contrast, the local ASX 200 enjoyed a robust week, climbing over 1.5% building on a 2.4% gain the prior week. The ongoing February reporting season has provided a strong tailwind, with better-than-expected results from key heavyweights, especially across banking, energy, and mining sectors, comfortably offsetting isolated disappointments. 

The week that was: highlights

• In the US, durable goods excluding transport surged 0.9% in December (from 0.4% prior)
• Industrial production rose 0.7% (from 0.2% prior)
• The FOMC minutes delivered a hawkish surprise, with several members indicating an openness to hike rates if inflation stays elevated
• Initial jobless claims for the week ending 14 February dropped sharply to 206,000, well below the expected 225,000
• The Philadelphia Federal Reserve  Manufacturing Index surprised to the upside, climbing to a five-month high of 16.3 in February
• In the United Kingdom (UK), the unemployment rate rose to 5.2% in the three months to December 2025 from 5.1% in the previous period. This marked the highest level since early 2021
• Staying in the UK, core inflation eased to 3.1% in January, the lowest since August 2021
• In Japan (JP), fourth-quarter (Q4) gross domestic product (GDP) rose by 0.1%, less than the 0.4% expected
• Staying in Japan, core inflation eased to 2% in January from 2.4%
• The Australian economy added 17,800 jobs in January, slightly below the 20,000 expected. However, the unemployment rate held steady at 4.1%, defying forecasts of a rise to 4.2%
• The Reserve Bank of New Zealand (RBNZ) kept rates on hold at 2.25%
• Crude oil surged 5.74% to $66.50
• Gold fell 1.05% to $4,987
• Bitcoin fell 2.69% to $66,948
• Wall Street's gauge of fear, the volatility index (VIX), eased to 20.22 from 20.59 the previous week.

Key dates for the week ahead

Australia & New Zealand

• AU – Construction work done: Wednesday, 25 February at 11.30am AEDT
• AU – Inflation rate (monthly consumer price index (CPI)): Wednesday, 25 February at 11.30am AEDT
• NZ – ANZ business confidence: Thursday, 26 February at 11.00am AEDT

China & Japan

• JP – Bank of Japan Takada speech: Thursday, 26 February at 12.30pm AEDT
• JP – Industrial production: Friday, 27 February at 10.50am AEDT
• JP – Retail sales: Friday, 27 February at 10.50am AEDT
• JP – Housing starts: Friday, 27 February at 4.00pm AEDT

United States

• Factory orders: Tuesday, 24 February at 2.00am AEDT
• S&P Case-Shiller home price: Wednesday, 25 February at 1.00am AEDT
• CB consumer confidence: Wednesday, 25 February at 2.00am AEDT
• Initial jobless claims: Friday, 27 February at 12.30am AEDT
• Producer price index (PPI): Saturday, 28 February at 12.30am AEDT
• Chicago purchasing managers index (PMI): Saturday, 28 February at 1.45am AEDT

Europe & United Kingdom

• No significant data releases scheduled.

Key events for the week ahead

US: CB consumer confidence

Date: Wednesday, 25 February at 2.00am AEDT

Last month, January's consumer confidence took a sharp hit, falling by 9.7 points to 84.5 from an upwardly revised 94.2 in December.

The sharp fall took it to the lowest level since May 2014 (82.2), surpassing even the depths of the Covid-19 pandemic period. Both the Present Situation Index (down 9.9 points to 113.7) and Expectations Index (down 9.5 points to 65.1, well below the 80 recession-signal threshold) deteriorated across all components, driven by heightened concerns over inflation, prices, labour market softness, and broader economic uncertainties like tariffs and geopolitics.

Looking ahead to February, there's tentative expectation for a modest rebound in confidence. This optimism stems from recent evidence of labour market stabilisation, with jobless claims showing resilience and unemployment figures remaining steady, hinting that the worst fears about widespread job losses might not be materialising. However, for a sustained improvement in consumer sentiment, clear signs of easing inflation and greater economic certainty will be crucial.

CB consumer confidence Index  chart

AU: inflation rate (monthly CPI)

Date: Wednesday, 25 February at 11.30am AEDT

December's inflation numbers showed a noticeable uptick in price pressures at the end of the year. 

Headline CPI increased by 3.8% year-over-year (YoY), up from 3.4% in November, exceeding the market's expectations of 3.6%. The trimmed mean, the Reserve Bank of Australia's (RBA) preferred underlying measure, rose to 3.3% YoY, with quarterly underlying inflation at 0.9%. These figures suggest persistent inflation beyond volatile items.

Both measures remained above the RBA's 2% – 3% target band, leading to an interest rate hike earlier this month. The RBA now anticipates underlying inflation to peak at 3.7% by mid-2026 before easing.

For the January inflation report, forecasts suggest a slight cooling, with headline inflation expected to ease to around 3.6% YoY and the trimmed mean to 3.1% YoY. This data is crucial, as confirmation of a moderation could keep rates on hold in March and potentially May. However, should the trimmed mean print at 3.3% YoY or higher, combined with labour force data showing a steady 4.1% unemployment rate, markets may increase the odds of a March rate hike from 25% to near 50%.

All groups CPI and trimmed mean chart

US: Q4 earnings season

The Q4 2025 earnings season continues wolls on with reports set to drop next week from companies including Home Depot, HP, Zoom, Salesforce, NVIDIA (previewed here), Snowflake, Dell, CoreWeave, Intuit and Zscaler.