Aussie CPI test, Canada GDP risk: Data week ahead

The final week of February finds global markets in a state of high alert. While investors are still grappling with US trade policy and geopolitical tensions, the focus is also on some “hard data” of inflation and growth. This week is defined by two high-stakes events that could trigger high volatility in the markets, and two “silent killers” that have the power to derail the current market equilibrium.

The High-Stakes Events:

First major event arrives from Australia. January Monthly CPI Indicator lands Wednesday, just weeks after the RBA raised rates to 3.85% with a hawkish tone. Headline CPI is expected to ease slightly to 3.7%, but focus will be on Trimmed Mean inflation — the RBA’s preferred gauge of underlying price pressure.

If Trimmed Mean prints at 3.3% or higher, market conviction around a May hike will harden further. Traders already assign high probability to another 25bps increase to 4.10%. Further out, implied yields suggest cash rate could peak between 4.20% and 4.45% into late 2026 should Q1 inflation fail to show meaningful moderation.

Friday shifts focus to Canada. Q4 GDP will test whether economic resilience is holding under tariff pressure. Bank of Canada remains on hold at 2.25%, and the OIS curve implies little policy change through year-end, with December 2026 pricing near 2.26%.

However, a flat or negative GDP reading could alter that narrative. It might force policymakers to reconsider easing, particularly if domestic demand shows strain.

The Silent Killers:

A potentially disruptive release is Tokyo CPI on Friday. As leading indicator for national inflation, it provides an early read on price momentum in Japan. Core CPI has eased to 2%, yet service inflation remains sticky, suggesting wage dynamics may still be firm. However, a weaker than expected Tokyo print would cast some doubts of whether BoJ is ready to act again in the near term.

US PPI also lands Friday and now carries elevated importance. After January FOMC minutes reintroduced hike optionality, producer price pressures are no longer secondary. Persistent input costs, especially linked to tariffs, would give hawkish members further justification to delay rate cuts.

Below are some highlights for the week:

United States (USD):

• Conference Board Consumer Confidence – Tuesday
• Producer Price Index (PPI) – Friday
• Fed Speakers: Several officials, including Governor Christopher Waller, are scheduled to speak.

Eurozone (EUR):

• German Ifo Business Climate – Monday
• Preliminary February Inflation (CPI) – Thursday/Friday: Major releases from Germany, France, and Spain.

Japan (JPY):

• Tokyo CPI – Friday
• Industrial Production & Retail Sales – Friday

Canada (CAD):

• Q4 GDP – Friday

Australia (AUD):

• Australia Monthly CPI Indicator – Wednesday

China (CNY):

• Loan Prime Rate (LPR) Decision – Tuesday