- Market participants are cautious ahead of Wednesday's release of consumer prices data in the U.S.
- If prices come in higher than expected than there could be another "episode of what we saw last week," Curran added.
There could be another sell-off moment in markets as early as Wednesday if consumer prices in the U.S. grow at a faster pace than anticipated, a trader told CNBC on Monday.
After the correction seen last week, with the S&P 500 down by more than 10 percent, investors are treading carefully as they wonder whether this could be a turning point for markets, which have hit new highs for most of the past year.
Piers Curran, head of trading at Amplify Trading, said a lot depends on Wednesday's release of consumer prices data in the U.S.
"We've got a really important event this week on Wednesday at 1:30 p.m. U.K. time (8:30 a.m. ET). We've got the U.S. CPI data being announced — that's really the next really important inflation measurement," he said.
If prices come in 1.9 or 2 percent higher, "that will then, I think, kick in perhaps another episode of what we saw last week," Curran added.
The U.S. consumer price index has been mostly at 1.7 percent over the last 12 months. A sudden pick-up in prices would confirm fears that inflation is moving at a faster rate than markets have expected and, thus, the U.S. Federal Reserve is more likely to announce further interest rate increases.
Higher interest rates are a concern for equity markets, given that they mean increased costs for companies.
Should Wednesday's data be at a similar level of around 1.7 and 1.8 percent, Curran said, "then actually I think things will settle down. I think it's too early yet for this correction to turn into something that's way bigger."
He added that that a recession is not probable in 2018, but will more likely occur in 2019.