Labor Market Signals And Policy Expectations
We now see that this trend did continue through mid-2025, but the latest figures for February 2026 show the Dutch unemployment rate has since improved, falling back to 3.8%. This recovery comes as recent Eurostat data shows Eurozone core inflation has cooled to 1.9%, comfortably within the ECB’s target range. The economic slowdown anticipated back then proved to be relatively mild and short-lived. Given this recovery and the ECB’s recent shift to a neutral policy stance, traders should consider reducing hedges that were positioned for a significant economic downturn. We believe strategies like selling out-of-the-money puts on the AEX index could be favorable, as implied volatility has decreased from its late-2025 highs of over 22% to a more stable 15% today. The focus in the coming weeks should be on a stable to moderately growing European market, rather than the slowdown that the 2025 data first hinted at.Implications For Positioning And Volatility
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