Analyst: The calmness of U.S. inflation data may hide potential risks, traders will closely monitor the performance of core services
Tastylive's global macro director Ilya Spivak stated that the next catalyst for the market is likely to come from the inflation data itself. Economists expect the overall CPI year-on-year for the U.S. in February to record 2.4%, while the core CPI year-on-year is expected to record 2.5%. However, beneath the surface of the data, a key risk is subtly visible.
One important driver of the January CPI data was the decline in the contribution of energy prices to overall inflation. Given that oil prices have already started to rise in early 2026, it seems extremely difficult to replicate this situation. Regardless of what this means for the energy component in the February CPI data, traders will be keenly watching whether core price growth (especially in the services sector) continues to decline slightly.
This could spark hopes for the normalization of inflation after the cessation of hostilities in the Middle East, thereby helping to soothe the market's anxious sentiment. If not, fragile financial markets may see a resurgence of "safe-haven" volatility, as investors will once again face the possibility of interest rates remaining elevated for a longer period. This would signal a troubling situation for stocks, bonds, and currencies other than the dollar.
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