This week’s holiday-shortened data docket will consist of mostly re-scheduled releases that were delayed by the government shutdown toward the end of last year. Friday’s advance Q4 GDP release and December personal income / consumption reports will provide an important baseline for current-quarter expectations. In US macro data released last week, ior the Jan’26 employment report, the headline numbers 130k (against our expectations of 80k, market consensus of 60k) with the unemployment rate falling from 4.4% to 4.3% (as per our expectations)—should be good enough to continue to keep the Fed on hold till May when Fed Chair Powell term ends. Core CPI inflation came in weaker than we had expected, rising by 0.295% m-o-m, below our forecast of 0.4% (Consensus:0.3%). Our forecast miss was largely attributable to two volatile components (used vehicle prices and lodging-away-from-home prices). This week we have first estimate of Q4CY25 GDP (our estimate is at 3.0%), core PCE for Dec (our estimate is at .4% MoM), personal income & spending data for Dec amongst other tier 2 US macro data. In UST dated supply, we have $16 BN of 20 year UST auction on Wednesday & $9 BN of 30 year TIPS on Thursday. Considering the strong NFP nos of Jan, we don’t see any urgency in cutting rates as long as Powell remains as Fed Chair. But we continue to expect two more rate cuts of 25 bps each in CY26, one in the 17th June FOMC meeting & the last cut in the 16th Sep FOMC meeting. These two rate cuts might be more from an insurance cut perspective under the new Fed Chair Warsh. We had released a bear flattening view on US SOFR on 7th Feb as below and it has worked out well. We had recommended entry at 47 levels & currently it is at 40 levels. Our profit target is 35 and stop loss is at 53 levels. On US equities we are moderately bullish and expecting 7015 levels. We have released the following long S&P recommendation on 8th Nov’25: https://macro-spectrum.com/trade-recommendation/buy-sp-500 Currently S&P is at 6836. At the time of recommendation, S&P was at 6729. Profit target is 7015 and stop loss is at 6545. In RoW data, we have the all important UK CPI Jan data on Tuesday which we expect at 3% YoY. Recent UK surveys and official data have been mixed. The job market is slowing, as past policy restriction weighs on growth. Further monetary easing is needed, albeit tempered by sticky services prices. After having cut rates to 3.75%, dovish sentiment at its February policy meeting suggests earlier/more cuts than we had previously expected. We now see cuts in March and June for a terminal rate of 3.25%, which is close to neutral. We have been recommending receive on 10yr UK Gilts since 16th Nov’25 as seen below: https://macro-spectrum.com/trade-recommendation/buy-10yr-uk-gilts At the time of reco, 10yr UK gilts were trading at 4.58. Currently they are trading at 4.41. Our profit target is 4.2% and stop loss is at 4.8%. In European data, we have flash PMIs, ZEW survey and Euro area industrial production this week. Canada gets to see the Jan CPI data on Tuesday at 2.4% as per our estimates.
