Analyst: Beneath the Calm of US Inflation Data May Lurk Hidden Risks, Traders to Closely Monitor Core Services Performance
Svmuu News According to Ilya Spivak, Global Head of Macro at Tastylive, the next catalyst for the market is likely to come from the inflation data itself. Economists expect the US February headline CPI year-on-year rate to come in at 2.4%, with the core CPI year-on-year rate at 2.5%. However, looking beyond the surface of the data, a key risk looms. A significant driver of the January CPI data was the decline in the contribution of energy prices to overall inflation. Against the backdrop of rising oil prices already in early 2026, it seems extremely difficult to replicate this scenario. Regardless of what this implies for the energy component in the February CPI data, traders will be eagerly watching to see if core price growth, particularly in services, continues to decline modestly. This could fuel hopes for inflation normalization after the easing of Middle East conflicts, thereby helping to soothe market anxiety. If not, fragile financial markets could see another bout of "risk-off" volatility, as investors once again face the possibility of interest rates remaining higher for longer. This would portend unfavorable conditions for stocks, bonds, and currencies other than the US dollar. (Jin10)
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