APAC Markets Reflect Cooling US Inflation; Gains Capped by Holiday Thin Trading

Market snapshot: Asia-Pacific equity indices showed marginal gains on Monday, February 16, 2026, as investors processed the latest US Consumer Price Index (CPI) data. The Australian S&P/ASX 200 edged up 0.15%, while Japan's Nikkei 225 rose 0.30%. The positive sentiment was primarily driven by a softer-than-expected US inflation print, which bolstered hopes for a recalibration of Federal Reserve monetary policy. However, trading activity remained muted across the region due to the 'President's Day' holiday in the United States and the ongoing Lunar New Year holidays in several Asian jurisdictions.

Summary: US CPI for January 2026 cooled to 2.4% YoY, slightly below the 2.5% consensus. This disinflationary signal provided a tailwind for APAC markets, though thin volumes due to holidays prevented a major rally.

Key Takeaways

• January 2026 US CPI moderated to 2.4% YoY from 2.7% in December, signaling a continued downward trend despite elevated shelter costs.
• Regional indices like the Nikkei 225 (+0.30%) and ASX 200 (+0.15%) reacted positively but were hindered by lower liquidity.
• Market participants are shifting focus to the Federal Reserve’s March FOMC meeting, with odds for a rate cut potentially increasing following the CPI miss.

SAHI Perspective

The 2.4% inflation print is a critical milestone for the current economic cycle. While Core CPI remains slightly stickier at 2.5%, the headline deceleration suggests that the restrictive policy stance of late 2025 is effectively dampening price pressures. For APAC traders, the immediate focus remains on currency fluctuations, particularly the USD/JPY and AUD/USD, which are sensitive to narrowing yield differentials as US Treasury yields soften on the back of this data.

Closing Insight

While a 2.4% CPI print is a positive signal for global risk appetite, the true test will be the sustainability of this trend in the face of volatile energy costs and labor market tightness.

High Performance Trading with SAHI.

Synthetically modified: AI-generated content by Sahi Live News Engine.