Market navigator:
week of 16 February 2026

What happened last week

• Resilient US labour market: Non-farm payrolls increased by 130,000 in January whilst the unemployment rate unexpectedly declined to 4.3%. However, annual benchmark revisions revealed that 2025 job growth totalled merely 181,000, representing the weakest performance since 2003 excluding the Covid pandemic and 2008 financial crisis periods. The labour market's unexpected resilience has shifted Federal Reserve (Fed) rate cut expectations from June to July 2026.
• Disinflation trend in the US: Headline consumer inflation declined from 2.7% year-on-year (YoY) to 2.4% in January, whilst core inflation retreated to 2.4%, marking the lowest level since March 2021. Shelter price increases moderated, though apparel and computers continue reflecting tariff pass-through effects. The contained inflation data has strengthened expectations for an additional rate reduction in March 2027.
• Renminbi advances to 33-month high: Both onshore and offshore yuan strengthened to 6.90 against the dollar, the strongest level since May 2023, following reports that Chinese officials instructed banks to limit US Treasury purchases. China's five-year plan outlined ambitions to accelerate renminbi (RMB) internationalisation, with economists identifying dollar weakness as a strategic opportunity.
• China's mixed inflation signals: The producer price index (PPI) declined 1.4% year-on-year (YoY) in January, the smallest contraction since July 2024, yet marking the 40th consecutive month of deflation. Consumer price index (CPI) growth decelerated sharply to 0.2% YoY, whilst new home prices in first-tier cities fell 3.1% YoY. Further government stimulus measures may be required.

Markets in focus

Artificial intelligence disruption concerns extend to other sectors

Artificial intelligence (AI) disruption continues to weigh on US equity markets, with the S&P 500 and Nasdaq 100 both declining 1.4%, whilst the Dow Jones retreated 1.2%.

The concerns have expanded beyond software, as last week's sell-off extended to wealth management, real estate and logistics companies. The emergence of AI tools poses threats to traditional business models. Real estate service company CBRE Group plunged 16%, insurance brokers Arthur J. Gallagher and Willis Towers Watson declined 13.7% and 12.8% respectively, whilst wealth manager Charles Schwab dropped 10.8%.

The sharp sell-off over the past two weeks may be overdone, as investors have become extremely sensitive to adverse news amid stretched valuations. Artificial intelligence technology presents both risks and opportunities to traditional businesses, yet investors have opted to sell first and assess implications later.

Other noteworthy corporate developments include Alphabet's latest bond sale, raising close to $32 billion in less than 24 hours across the dollar, sterling and Swiss franc markets. The sterling debt includes a rare 100-year note, priced at a thin spread of 120 basis points, indicating robust demand for technology sector debt despite equity investors' concerns regarding capital expenditure levels.

From a technical analysis perspective, the US Tech 100's lower weekly close indicates further momentum deterioration. The 200-day moving average (MA) warrants close monitoring. Whilst it provided support on Friday, a breach below this level would suggest a reversal in the medium-term uptrend. The 50-day MA will provide resistance near 25,400. Until the index reclaims that level, establishing new historical highs appears unlikely in the near term.

Figure 1: US Tech 100 index (daily) price chart

Hang Seng Index flat ahead of Lunar New Year

The Hang Seng Index (HSI) concluded the week flat at 26,567 as global market caution met lower trading volumes ahead of the Lunar New Year holiday. The index demonstrated considerable intraweek volatility, reaching a two-week high on Tuesday at 27,398 following Wall Street strength before retracing gains on Thursday and Friday. Communications and consumer sectors led subsequent weakness, with artificial intelligence disruption concerns and persistent property sector deterioration weighing on investor confidence.

Major technology names including Meituan and Kuaishou led losses, declining 10.1% and 3.9% respectively, whilst healthcare specialist WuXi Biologics gained 7.8% on robust earnings. On Friday, the US released an updated list of firms identified as Chinese military companies to include Alibaba, Baidu and BYD, though the list was withdrawn an hour after posting. This development may impact US-China relations ahead of President Trump's China visit in April and generate volatility in these technology giants' share prices.

This week, the Hong Kong market will remain closed from Monday afternoon through Thursday, whilst the onshore market will be closed through 23 February for Lunar New Year celebrations.

Last week's price movement validated our previous concerns. The rejection near 27,400 confirmed the head and shoulders pattern, indicating that the near-term technical picture has deteriorated, although the index remains marginally above the 50-day MA. The index is likely to breach immediate support near 26,300 towards the next support level at 25,300 – 25,500. That said, the market may demonstrate heightened sensitivity to news and data given thin market liquidity this week. The index will encounter resistance around 27,300.

Figure 2: Hang Seng Index (daily) price chart

Silver suffers third weekly loss amid deleveraging pressure

Silver registered its third successive weekly decline as Thursday's volatility spike triggered widespread selling, with concurrent weakness in equities and cryptocurrencies pointing towards forced position unwinding exacerbated by systematic trading strategies. Losses paralleled significant declines in gold and copper despite 10-year US Treasury yields falling to early December lows, suggesting recent precious metals turbulence may have redirected safe-haven capital back towards government bonds.

Silver's dual role as both store of value and industrial input means its price remains influenced by global growth anxieties. The silver inventory held by the Shanghai Futures Exchange (SHFE) stood at 342.1 tonnes as of 11 February, approaching a 10-year low, indicating robust demand from the world's largest silver consumers. Meanwhile, market participants maintain expectations for two Fed rate reductions through year-end.

Although fundamental factors remain intact, near-term trading dynamics have been overwhelmed by deleveraging activity. Once liquidation pressures abate, structural factors will return to focus.

From a technical perspective, the longer-term uptrend remains intact as silver trades well above the 200-day MA. However, the price action displays characteristics of the later stage of an Elliott Wave cycle. After declining close to 50% from the peak at $121.65, the recent rebound from $64.02 resembles Wave B, potentially targeting $92 – $94, before another short-term pullback materialises.

Figure 3: Silver price daily chart

The week ahead

The forthcoming week features limited Chinese data releases due to Lunar New Year holidays, shifting attention towards developed market monetary policy assessments and inflation dynamics.

Japan's consumer price data on Friday assumes significance following moderation in producer price growth to 2.3% year-on-year (YoY) in January. Whilst fuel subsidies have eased headline pressures, yen weakness continues elevating import costs. Despite the moderation, core inflation is likely to remain above the Bank of Japan's (BoJ) 2% target, presenting policymakers with a challenging trade-off between currency stability and inflation containment without undermining economic momentum.

Central bank minutes from the Reserve Bank of Australia (RBA) and Federal Open Market Committee (FOMC) warrant scrutiny. RBA deliberations should reveal the board's assessment of inflation persistence above 3%, with Thursday's employment data providing crucial context after December's unexpected 65,200 job additions. Markets will evaluate whether labour market tightness justifies further policy adjustments.

On the corporate front, Walmart reports earnings amid heightened investor expectations. The retailer has generated close to 20% returns year-to-date, supported by robust operational performance and strategic artificial intelligence partnerships with Google and OpenAI. Management commentary on these collaborations' revenue potential will prove instrumental in validating current valuations.

Figure 4: Bank of Japan moves cautiously to contain inflation risk without undermining the vulnerable economy

Key macro events this week

Monday 16 February 2026

• 7.50am – Japan gross domestic product (GDP) Growth Rate QoQ Prel (Q4): previous -0.6%, consensus 0.4%

Tuesday 17 February 2026

• 8.30am – Australia RBA Meeting Minutes (February)
• 3.00pm – UK Unemployment Rate (December): previous 5.1%, consensus 5.1%

Wednesday 18 February 2026

• 7.50am – Japan Trade Balance (January): previous ¥105.7 billion, consensus ¥-2,142.1 billion
• 3.00pm – UK Inflation Rate YoY (January): previous 3.4%, consensus 3%
• 9.30pm – US Building Permits Prel (November): previous 1.411 million
• 9.30pm – US Building Permits Prel (December): consensus 1.42 million
• 9.30pm – US Durable Goods Orders MoM (December): previous 5.3%, consensus -1.8%
• 9.30pm – US Housing Starts (November): previous 1.246 million
• 9.30pm – US Housing Starts (December): consensus 1.33 million

Thursday 19 February 2026

• 3.00am – US FOMC Minutes (February)
• 8.30am – Australia Employment Change (January): previous 65,200, consensus 20,000
• 8.30am – Australia Unemployment Rate (January): previous 4.1%, consensus 4.2%

Friday 20 February 2026

• 7.30am – Japan Core Inflation Rate YoY (January): previous 2.4%, consensus 2%
• 3.00pm – UK Retail Sales MoM (January): previous 0.4%, consensus 0.2%
• 5.30pm – UK S&P Global Manufacturing PMI Flash (February): previous 51.8, consensus 51.8
• 5.30pm – UK S&P Global Services PMI Flash (February): previous 54.0, consensus 53.5
• 9.30pm – US Core PCE Price Index MoM (December): previous 0.2%, consensus 0.4%
• 9.30pm – US Personal Income MoM (December): previous 0.3%, consensus 0.3%
• 9.30pm – US Personal Spending MoM (December): previous 0.5%, consensus 0.4%
• 9.30pm – US GDP Growth Rate QoQ advance estimate (Q4): previous 4.4%, consensus 3%

Key corporate earnings

(in local exchange time)

Tuesday 17 February 2026

• Palo Alto

Wednesday 18 February 2026

• Analog Devices

Thursday 19 February 2026

• Walmart
• Deere

_{Source: Trading Economics, Nasdaq, LSEG (as of 16 February 2026)}