Blog week ending, 20th February 2026
Markets:
- Local and global markets largely continued last week’s trends with money rotating out of US equities, particularly US technology stocks.
- European fourth quarter company earnings growth accelerated to 3.9%, beating expectations.
- Bank of America’s February global fund manager survey noted investors are the most overweight stocks since December 2024, with overall sentiment at its highest since June 2021. Cash levels, however, edged higher after seven consecutive months of declines.
- In local stock news, a Macquarie-led consortium agreed to pay $5.20 a share for Qube Holdings, valuing the deal at $11.7 billion.
- BHP delivered a strong first-half result sending its share price to a record high. Earnings, revenue, and profit all came in above expectations, with a sizeable dividend increase.
- Real estate stocks gained some support helped by strong earnings from Dexus and Mirvac, both of which traded higher. Dexus shares were further boosted by a buyback.
- The oil price climbed sharply, hitting a six-month high, driven by escalating geopolitical tensions, including lingering US-Iran concerns and lack of progress on Russia-Ukraine peace talks.
Economics:
- The RBA’s minutes provided more colour on their February rate rise and their change in tone, noting demand has been stronger than expected while supply remains constrained.
- Australian full-time employment rose by 50,500 in January, following an upwardly revised 56,900 increase in December. The unemployment rate held steady at 4.1%, better than the expected 4.2%, while the participation rate remained unchanged.
- Australian wages growth was broadly steady in the December quarter, rising by 0.8% and lifting annual growth to 3.4%. Public sector wages continued to lead the charge.
- The Reserve Bank of New Zealand left is cash rate unchanged at 2.25% at its February meeting, as expected, maintaining borrowing costs at their lowest level since mid-2022.
- US inflation slowed to 2.4% in January, its lowest level since May 2025 and below expectations, down from 2.7% in the prior two months Energy prices fell and higher readings from a year ago dropped out of the annual calculation.
- US Federal Reserve minutes showed policy makers remain cautious, noting progress toward a 2% inflation target could be uneven.
- US housing starts rose 6.2% in December, well above forecasts, marking a second consecutive monthly gain, lifting starts to their highest level since July and further rebounding from Octobers 15-month low.
- The Eurozone economy expanded by 1.3% for the year in the December quarter. Its slowest pace in a year, but only slightly weaker from the 1.4% annual read in the previous quarter.
- Eurozone industrial production declined by 1.4% in December, reversing November’s downwardly revised 0.3% increase and broadly matching expectations of a 1.5% fall. It was the steepest monthly contraction since April 2025.
- The UK unemployment rate rose to 5.2% in the December quarter, slightly above expectations. This marks the highest level since the three months to February 2021.
- UK consumer price inflation eased to 3% in January 2026, down from 3.4% in December and in line with market expectations, helped by softer transport and food price increases.
- Japan’s economy grew 0.1% in the December quarter, rebounding from a 0.7% drop in the previous quarter but missing expectations of a 0.4% increase. Business investment recovered whilst private consumption growth slowed.
- Japan’s exports surged 16.8% year-on-year, sharply higher than December’s 5.1% growth, and the strongest pace since November 2022.
- China’s current account surplus widened to an unprecedented US$242.1 billion in the December quarter, up from US$163.8 billion a year earlier, driven by a record goods surplus as exports climbed to all-time highs
- China new home prices across 70 cities fell 3.1% year-on-year, deepening from a 2.7% decline in the previous month. This marked the 31st straight month of contraction and the fastest decline since June.
Politics:
- The Trump administration is planning to ease some steel and aluminium tariffs, citing consumer price impacts on goods. The US and Taiwan are also moving closer to finalising a trade pact that would reduce tariffs to 15%.
- Iran and US held further talks this week, with Iran signalling flexibility on its nuclear program in exchange for relief from debilitating US sanctions. Later in the week, however, US Vice President JD Vance said Iran had failed to acknowledge key American demands.
- Australia and the European Union have moved closer to resolving a long-stalled free-trade agreement, following progress on disputes involving beef, cheese and car related taxes.
- Ukraine and Russia held a second day of US-brokered talks in Geneva, with discussions centred on a major Ukrainian nuclear power plant seized by Russia early in the conflict.
Written by Christopher Lioutas
Chairman – Harbourside Investment Management
