The US Dollar (USD) maintained its position against other currencies on February 26, as markets monitored developments regarding Trump’s tariff policy. Upcoming US economic data includes New Home Sales figures for January, alongside speeches from Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin.

This week, the USD displayed varied performance against major currencies, showing its weakest performance against the Swiss Franc, with a decrease of 0.41%. Falling US Treasury bond yields also affected the USD, following comments from Treasury Secretary Scott Bessent about spending reductions.

EUR/USD initially rose over 0.4% but lost momentum to trade just below 1.0500. GBP/USD saw minor gains, trading around 1.2650, while AUD/USD faced continuous losses, remaining below 0.6350 despite the annual Consumer Price Index (CPI) rising by 2.5% in January.

USD/JPY dropped nearly 0.5%, marking its lowest close since early October but saw a slight rebound near 149.50. Gold prices faced selling pressure, losing over 1% before stabilising slightly above $2,910 after hitting a weekly low at $2,888.

With the US dollar holding steady, attention remains on Trump’s tariff policy and upcoming economic data, including home sales figures and speeches from Raphael and Thomas. Traders will be listening closely to both Federal Reserve officials, as their remarks could hint at future monetary policy shifts. While bond yields have dipped in response to Scott’s mention of spending reductions, the broader impact on the currency market will depend on how investors weigh these remarks against upcoming data releases.

Given the mixed performance of the USD against major counterparts, traders navigating derivatives will need to pay close attention to individual currency movements. The drop against the Swiss Franc, for example, suggests a move towards safe-haven assets, often a response to uncertainty in US fiscal policy. Meanwhile, the euro showed some strength before reversing course, indicating a lack of follow-through by buyers. $1.0500 remains an important threshold, and further downside could prompt reassessment by short-term traders looking for opportunities in EUR-related instruments.

The British pound held modest gains, trading near 1.2650. Traders should watch for any new economic data from the UK that might change Sterling’s trajectory. A stable pound suggests confidence in the UK’s own economic outlook, but movements in US yields could still shift the balance. Meanwhile, the Australian dollar continues to struggle despite rising inflation, reflecting broader weakness, likely due to external factors like demand for commodities and signals from global central banks. The fact that it remains below 0.6350 suggests a lack of conviction from buyers, making it vulnerable to additional declines if sentiment worsens.

As for the Japanese yen, its brief drop of nearly half a percent pushed USD/JPY to its lowest level since early October before a slight recovery. This suggests that the yen remains a real alternative during moments of doubt in the dollar. However, any sustained movement below 149.50 could signal further yen strength, impacting how traders approach yen-related derivatives.

Gold prices saw a sharp decline of over 1% before stabilising just above $2,910. While it bounced after hitting a low of $2,888, the selling pressure here aligns with shifting risk sentiment. Those watching commodity markets may take this as an early sign of potential volatility, particularly if the dollar strengthens further.

The coming weeks will likely bring more fluctuations across these markets. Derivatives traders should be prepared for possible price swings driven by policy updates, bond yield movements, and fresh economic reports. Holding a clear plan will be key in adapting to rapid shifts in market direction.

Japan Post Holdings plans to sell shares in Japan Post Bank, valued at approximately 600 billion yen ($4.02 billion). This sale would reduce Japan Post’s stake below 50%, allowing the bank more operational flexibility and easing regulatory burdens.

This action supports Japan’s corporate governance reforms, which seek to enhance free-float shares. The final decision could occur within the week, alongside Japan Post Bank’s plans for a share buyback.

Japan Post currently owns 61.5% of Japan Post Bank, having previously reduced its stake in 2023. The bank reported a 17% increase in net profit for the nine months ending December, attributed to rising interest rates.

That increase reflects the broader impact of higher global rates, which have improved margins for financial institutions. With that in mind, we recognise how this sale fits within Japan’s broader push for better governance and stronger market liquidity. By reducing its ownership, Japan Post gives the bank greater independence, while also meeting government objectives of encouraging a more dynamic stock market.

Masatsugu Nagato and his team will want to time this sale carefully. Market conditions are currently favourable, with strong investor appetite for financial stocks amidst rising yields. However, selling such a large block of shares introduces concerns about short-term price fluctuations. Investors tracking this move will assess whether demand can absorb this supply without dampening the share price.

The planned share buyback adds another layer. If executed alongside the sale, buybacks could help stabilise Japan Post Bank’s stock, signalling confidence in its valuation. A coordinated approach would be advantageous, reducing excess selling pressure and providing assurance to investors.

Looking at the bank’s recent financials, the rise in net profit points to stronger revenue from interest-bearing assets. Higher rates globally have bolstered earnings, particularly for institutions with large fixed-income portfolios. Japanese banks, long weighed down by a low-rate environment, are seeing better returns, making them more attractive to shareholders.

Among policymakers, there is clear support for reforms that promote broader ownership and market liquidity. A diluted stake for Japan Post means more active investors shaping corporate decisions. That aligns with Japan’s wider targets of modernising corporate structures and attracting global capital. The government is likely to view this sale as another step in that direction.

For those monitoring this, attention should be on how the market reacts when the share sale details emerge. If investor demand is robust, the offering should be well received, limiting downward pressure on Japan Post Bank’s stock. On the other hand, if broader sentiment weakens, it may test the bank’s share price resilience in the short term.

EUR/GBP is experiencing downward pressure as Germany’s GfK Consumer Confidence Survey fell to -24.7 for March, down from -22.6. This figure is below market expectations and is the lowest since April 2024, indicating ongoing economic challenges.

Traders are monitoring the European Central Bank (ECB) ahead of expected interest rate cuts. ECB officials have suggested that subdued growth reflects changing economic realities, with the potential for further reductions if inflation approaches the target.

UK Prime Minister Keir Starmer has announced plans to increase defence spending to 3% of the nation’s economic output, sourcing initial funding from cuts in overseas development spending. This marks the largest increase since the Cold War.

Germany’s consumer confidence falling further is not a good sign for the euro. People are spending less, and companies may feel this downturn soon. When confidence is weak, we often see slower growth, and that puts pressure on policymakers. With inflation still in focus, the ECB has a tough decision ahead.

Some officials have already hinted that borrowing costs might need to come down. If inflation continues easing, rate cuts could arrive sooner rather than later. That means investors need to watch economic data closely—any surprises could move prices quickly.

On the other side, the UK appears to be taking a different approach, prioritising defence spending. Keir’s plan to shift money from overseas aid may create political friction, but markets will focus on the broader economic effects. A stronger commitment to domestic investment could influence long-term growth prospects.

For traders, central bank expectations and policy changes remain the key drivers. If rate cuts in Europe happen faster than in Britain, we might see a shift in momentum. The next few weeks will likely bring more clarity, but as always, unexpected announcements can quickly change the outlook.

Standard Chartered forecasts a further decline in Bitcoin, anticipating a drop into the low $80,000s. Despite its current resilience, Bitcoin is under pressure from a wider selloff in the cryptocurrency market, influenced by developments in Solana’s meme coin.

Analysts predict a near-term decrease of approximately 10%. They warn that although falling U.S. Treasury yields could eventually aid Bitcoin’s recovery, the present moment is not ideal for purchasing, particularly with Bitcoin ETFs possibly facing larger outflows.

Standard Chartered expects Bitcoin to retrace further, falling towards the lower $80,000 range. Right now, the price remains relatively stable, but broader selling pressure in digital assets is weighing on it. Part of this comes from market events linked to Solana-based meme coins, which have stirred sentiment and added to volatility.

A decline of roughly 10% in the near term is on the table, according to analysts. While lower U.S. Treasury yields could provide some support down the line, buying at this stage carries risk. Exchange-traded funds tracking Bitcoin may see heightened outflows, which could magnify selling pressure in the coming weeks. That alone is enough reason for many traders to take a step back before making any moves.

Recent price action suggests sentiment is mixed, even as Bitcoin stays above key technical levels. The market’s focus remains on short-term trends, with liquidity conditions tightening ahead of key data releases from the United States. Any unexpected shift in macroeconomic indicators could add to volatility, forcing traders to adjust positioning quickly.

Rising interest in leverage could also play a role. Open interest in Bitcoin futures has been building, which is often a sign that traders are looking for strong directional moves. If downside risks increase, liquidations could fuel sharper declines, making price swings more extreme. On the other hand, if support holds around $80,000, short positions may start to unwind, prompting short-term rebounds.

ETF flows are another factor shaping sentiment. Some funds have seen sustained withdrawals, adding weight to recent selling. Institutional participants remain active, but with capital moving cautiously, demand could remain subdued. That said, if outflows slow down or reverse, it might shift sentiment back in favour of buyers.

Keeping an eye on traditional markets is essential. Equities remain sensitive to central bank policy, and if broader risk appetite weakens, Bitcoin could feel the effects. Correlations have been inconsistent in recent months, but sudden moves in stocks or bond yields could still trigger reactions in digital asset markets.

In the next few weeks, attention will stay on price levels that attract strong buying and selling activity. Should Bitcoin continue its descent, psychological barriers could come into play, testing investors’ willingness to hold. If recent trends persist, volatility is likely to remain elevated, creating conditions where momentum shifts quickly.

In January, Sweden’s Producer Price Index (PPI) increased from 0.1% to 1.7%. This change reflects a notable rise in production costs within the economy.

The PPI measures the average change in prices received by domestic producers for their output. An increase in the index can indicate rising inflationary pressures in the economy.

Market participants often analyse this data to gauge economic trends. Such price movements can influence monetary policies and economic forecasts moving forward.

A rise from 0.1% to 1.7% in the Producer Price Index is not something to gloss over. It shows that production costs have been climbing at a much faster rate than before. This doesn’t just affect Sweden’s domestic producers—it ripples through the wider economy.

When businesses face higher costs, that often translates to higher prices for consumers. Inflationary pressures become harder to ignore. Central banks usually take note of this because it can influence decisions on interest rates. If inflation is running hotter than expected, policymakers may feel compelled to adjust their approach. Higher borrowing costs could follow.

For those trading derivatives, these shifts matter. A rising PPI can influence interest rate expectations, which can impact bond prices, currency valuations, and stock movements. Volatility tends to increase when market participants adjust their positions based on changing economic signals.

Analysts have been keeping an eye on these numbers alongside monetary policy decisions elsewhere. Earlier in the month, Anna noted how inflationary trends could shape future rate moves. Her assessment pointed towards growing concerns over cost pressures in the region. Now, with the latest PPI data, her earlier observations seem even more relevant.

Johan had mentioned that traders should consider how central banks might react to unexpected inflation spikes. His argument was that if inflation picks up pace, future monetary policy adjustments could come sooner than previously thought. The January PPI figures add weight to that possibility.

From our perspective, the current landscape presents new factors to weigh up. If producer prices continue climbing, expectations around policy tightening could shift yet again. That could mean fluctuations in bond yields, shifts in currency valuations, or changing equity market trends.

For now, the focus will be on whether this is a one-off spike or part of a larger trend. Upcoming inflation reports will be particularly telling. A higher-than-expected Consumer Price Index (CPI) could reinforce the idea that inflation remains persistent. If that happens, central bankers might respond with policy changes that traders will need to factor into their strategies.

Time will tell how this plays out, but what’s clear is that inflation-related data remains essential reading—especially for those making decisions based on market expectations.

China’s Vice Minister of Commerce, Wang Shouwei, recently met with business leaders from the United States. The discussions centred on tariffs, according to an announcement by China’s Ministry of Commerce.

No additional details regarding the meeting have been released at this time.

The fact that Wang Shouwei sat down with American business leaders means trade remains a major concern for both sides. Given that tariffs were the focus, it suggests ongoing uncertainty in supply chains and the costs companies may have to absorb or pass on. This type of discussion does not happen without reason. If the Ministry of Commerce is making the effort to highlight the meeting, there is a strong chance that policy adjustments could follow.

When government officials engage with corporate leaders in this way, it is usually because pressures are mounting. Business representatives will have pushed for clarity, particularly those affected by the cost of imports and exports. The lack of additional details leaves more questions than answers. But what has been confirmed indicates that trade conditions between the two largest economies remain under negotiation.

Watching how the United States responds in the coming weeks will be telling. Any shift in stance from Washington could provide direction on whether tariffs will ease or remain in place. Until more information is published, markets will continue to weigh the risks. Moves in commodity prices, industrial stocks, and even foreign exchange markets may reflect expectations about how these discussions will develop.

For those paying close attention, monitoring official statements from both governments is necessary. Sometimes, policy changes are telegraphed before they become formalised. Those who react only after decisions are made may find themselves adjusting too late.

EUR/JPY trades around 156.95 as the Euro receives support from potential increased defence spending in Germany, estimated at €200 billion. The Japanese Yen is also supported by expectations of a rise in interest rates from the Bank of Japan.

The European Central Bank (ECB) is anticipated to cut rates for the fifth consecutive time, following a drop in inflation to just over 2%. ECB officials suggest interest rate reductions may pause if inflation stabilises.

In contrast, the BoJ is projected to raise its rate from 0.50% to 0.75%, which is likely to support the Yen further.

The Euro is holding its ground near 156.95 against the Yen, helped along by talks of more defence spending in Germany. A budget increase of €200 billion is not a small figure, and markets are treating it as a factor that could push up demand. With Japan’s currency also finding backing from speculation of rising interest rates, the next few weeks will bring a tug-of-war between these two forces.

At the centre of attention is what comes next for monetary policy. The ECB has been predictable in cutting rates, now expected for a fifth straight time. Falling inflation, now hovering slightly above 2%, has been the permission slip for these reductions. But policymakers are hinting that this downward cycle is not necessarily locked in. If data steadies, they might hit the brakes on further cuts. That would change the dynamics of the Euro’s movement, particularly against currencies that have a different trajectory.

Meanwhile, expectations are growing that Kazuo Ueda and his colleagues at the BoJ will push their key rate from 0.50% to 0.75%. If that happens, Yen bulls will have more reason to increase their positions. The Japanese currency has been undervalued for some time, and higher borrowing costs make it less attractive to sell.

For those watching derivatives, this sets up a situation where sudden volatility could emerge. The market has largely priced in both the ECB cut and the BoJ hike, but any deviation from this script could prompt quick moves. For example, if the ECB pauses earlier than assumed, the Euro might get a boost. On the other hand, if the BoJ proceeds more cautiously than markets expect, the Yen could weaken unexpectedly.

Recent market positioning suggests a balance of opinions. Some traders remain convinced that the Euro will hold steady due to Eurozone economic resilience, while others are betting that Japan’s rate adjustments will start to matter more. Options pricing suggests hedging is picking up—likely in response to the risk of policy shifts happening differently than expected.

With this in mind, the prudent approach in the near term is to stay alert for fresh comments from rate-setters. Speeches, interviews, and even off-the-cuff remarks can shift sentiment quickly. Inflation prints also hold weight, particularly if they show Eurozone prices stabilising faster than projected or if Japanese data hints at a more measured approach from the BoJ.

The coming weeks will be a test of expectations versus reality. If both central banks deliver exactly what markets anticipate, price action might be muted. But should one of them steer in an unexpected direction, swings could follow as traders adjust their positions.

On February 26, Tesla commenced deliveries of the updated Model Y in China. This revised model includes improvements in exterior design, interior comfort, driving range, and advanced safety and intelligence systems.

Production of the new Model Y began on February 18 at Tesla’s Shanghai Gigafactory, contributing to the company’s strategy to enhance its popular electric SUV for the Chinese market. The launch occurs amid competition in China’s electric vehicle industry.

Additionally, Tesla released a software update in China that introduced Autopilot functionality for urban roads.

This development is more than just a product update. It reflects Tesla’s effort to reinforce its footing in a market where competition is increasing. While the revised Model Y brings refinements, the broader picture is about how these adjustments will influence demand and potential pricing strategies. Given the current state of the electric vehicle market in China, the response to these deliveries will provide insight into future price action.

The timing of these updates is worth noting. Production starting on February 18 means Tesla was already committing resources before the official launch. That indicates confidence in demand and signals a steady supply in the coming weeks. Whether the market absorbs these vehicles smoothly or if adjustments are needed will become apparent soon.

Another factor is the newly introduced Autopilot functionality for urban roads. This software expansion isn’t just an upgrade—it sets expectations. If adoption rates are high and functionality performs well, that could reinforce consumer sentiment. On the other hand, if issues arise, perceptions may shift. This will matter when gauging forward-looking expectations.

At the same time, competitors continue to refine their line-ups. The broader electric vehicle sector in China remains fast-moving, and pricing strategies have played a central role in shaping demand. A pattern has developed where manufacturers adjust prices quickly in response to competition. If market trends follow recent behaviour, pricing revisions could emerge soon.

This means near-term volatility is likely. Market participants will need to factor in order backlogs, production efficiency, and consumer response to both the model refresh and software changes. Those tracking price action should also consider how existing inventory levels are managed. Fluctuations here could provide an early signal for any forthcoming adjustments.

With these elements in motion, reactions in the next few weeks will set expectations for the months ahead. Monitoring uptake figures, delivery times, and shifts in broader industry pricing will provide a clearer picture of how this development is feeding into market conditions.

The U.S. House of Representatives approved President Donald Trump’s tax and border policy package with a narrow 217-215 vote, which included one Republican opposing the bill and no support from Democrats.

Speaker Mike Johnson had initially postponed the vote, citing insufficient support, but later proceeded after extensive lobbying by Johnson, House Majority Leader Steve Scalise, and Trump.

The $4.5 trillion package aims to extend Trump’s 2017 tax cuts, while also addressing deportation funding, enhanced border security, energy deregulation, and increased military expenditure. Trump’s involvement was aimed at ensuring legislative support for his policy priorities.

Trump’s backing helped rally House Republicans around the bill, though the tight margin underscores ongoing resistance within his own party. Democrats, unified in opposition, criticised the package as fiscally irresponsible and politically motivated, particularly the tax extensions, which they argue disproportionately benefit wealthier Americans while adding to the national debt. Still, for House Republicans, securing approval for this package was a key step toward shaping the government’s approach to economic and immigration policy ahead of the next election.

Attention now shifts to the Senate, where passage is far from assured. With Democrats in control, outright rejection is a possibility unless Republicans negotiate changes. Senate Majority Leader Chuck Schumer signalled that his caucus remains firmly opposed to the bill’s tax provisions and border measures. Some moderate Republicans have also expressed concern, particularly over the projected deficits expected to follow if the tax cuts remain in place without offsetting revenue.

Financial markets have already started reacting. Bond yields edged higher as investors priced in the prospect of increased government borrowing, particularly if tax extensions become law. Stocks tied to defence spending and energy deregulation saw moderate gains, reflecting confidence that certain provisions might survive even if the broader package faces resistance.

One major question now is whether Trump’s influence will be enough to pressure Senate Republicans to hold their line. The former president remains active in shaping party strategy, frequently meeting with congressional allies in an effort to keep his agenda intact. While House support suggests strong backing from core Republican legislators, some in the Senate may see political risk in endorsing tax policies that deepen deficits.

As negotiations unfold, traders should be prepared for volatility. Political developments can shift expectations quickly, particularly if signs emerge that Republicans might concede on key elements. Sector positioning will be important, especially in areas tied to fiscal policy, and a close watch on legislative movement in the coming days will be necessary.

Singapore’s industrial production grew by 4.5% in January, exceeding the forecasted decline of 3.4%. This positive performance contrasts with previous expectations, indicating a stronger-than-anticipated manufacturing sector at the start of the year.

In the foreign exchange market, the EUR/USD pair returned above 1.0500, with demand rising as the US Dollar faltered. Meanwhile, GBP/USD also recovered past 1.2650, benefiting from a shift in market sentiment.

In the cryptocurrency market, Bitcoin, Ethereum, and Ripple faced notable drops, with Bitcoin oscillating around $88,500 after experiencing a low of $86,050.

Singapore’s manufacturing output catching many off guard is a clear sign that expectations may need adjusting. A predicted slump of 3.4% turned into actual growth of 4.5%, demonstrating unexpected resilience in the sector. This shift suggests that early-year economic activity might be healthier than analysts anticipated. With manufacturing being a key driver of overall economic momentum, we should be asking how this strength might influence broader market behaviour in the weeks ahead.

Currency markets also felt the impact of shifting sentiment. The Euro reclaimed ground against the US Dollar, pushing back above 1.0500 as the greenback showed signs of weakness. A similar move played out with the British Pound, which regained strength past 1.2650. This suggests that traders are adjusting their positions based on shifting dynamics in dollar demand. If this trend holds, we may see more investors positioning themselves in anticipation of further movements in the major currency pairs.

Over in digital assets, Bitcoin struggled to maintain its footing. Prices hovered around $88,500 following a dip as low as $86,050, showing how quickly conditions can shift. Ethereum and Ripple joined the decline, reflecting a market that remains under pressure. These price movements underline the importance of rapid decision-making, as volatility remains a constant force. For those watching closely, this is a moment to reassess risk exposure and prepare for further turbulence ahead.