Week Ahead in Economics

Société Générale has reduced its Fed rate cut forecast to a single 25bp move in June 2026 following stronger US growth data. Meanwhile, AI-driven demand is boosting Asian tech exporters while Europe remains mired in fiscal debate and a slow PMI recovery.

Key Takeaways

• 1.The Fed is now expected to cut rates only once in 2026, likely in June, due to a resilient labor market and sticky inflation.
• 2.Taiwan's 2026 growth forecast has been sharply upgraded to 6.3% driven by exceptional export momentum in semiconductors.
• 3.Euro area PMIs are expected to show further improvement in February, reflecting a divergence between resilient services and subdued manufacturing.

Table of Contents

• From On Our Minds
• Key Themes
• Key Data Releases and Events Coming Next Week
• Calendar – G5 – 16 - 20 February
• Calendar – Other countries – 16 - 20 February
• SG Central Bank Calls
• United States: Growth in Focus
• Euro area: New Eurobonds won't happen soon
• Industrial production set to drop in January
• Euro area outlook expected to improve in February flash PMIs
• United Kingdom: Key week for judging a March vs April rate cut
• Labour market loosening set to continue
• Big step down in inflation
• A likely positive surprise in the UK’s borrowing figures for a change
• Retails sales benefit from a small post-Budget bounce
• How long will the post-Budget bounce in the PMIs last?
• Asia Pacific: Solid growth and sticky inflation in Japan; BI to hold
• 4Q25 GDP to come back to solid growth
• Headline to go below 2% but core core remains well above target
• Central Bank watch – Bank Indonesia
• Latin America: Inflation data send mixed signals for central banks
• Brazil: improving near-term inflation outlook may support frontloaded BCB cuts
• Brazil: economy likely contracted in December and 4Q25
• Mexico: rising core inflation continues to challenge Banxico's dovish bias
• Mexico's retail sales strengthened in 4Q25, supporting consumption and growth
• Chile: January disinflation supports a March rate cut
• Colombia: wage passthrough now visible; BanRep likely to maintain front-loaded tightening

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