Cresco Labs Inc. reported a Q4 adjusted loss of $0.02 per share for the quarter ended December 2025, matching the Zacks Consensus Estimate. A year earlier, it posted an adjusted loss of $0.01 per share. The report showed an earnings surprise of +14.16%. In the prior quarter, the expected loss was $0.03 per share, but the company reported a loss of $0.05, a surprise of -66.67%. Quarterly revenue was $161.55 million, beating the consensus estimate by 0.26%. This compared with $175.91 million a year ago, and the company has beaten revenue estimates three times in the past four quarters. Shares are down about 20.7% year to date, versus a 0.4% gain for the S&P 500. The stock holds a Zacks Rank #4 (Sell), and the Medical – Products industry is in the bottom 45% of 250+ Zacks industries. The current consensus calls for EPS of -$0.03 on $162 million in revenue next quarter, and EPS of -$0.09 on $670.41 million for the fiscal year. Myomo, Inc. is due to report on March 9, with forecasts of a $0.09 loss per share (year-over-year change of -800%) and revenue of $10.15 million, down 15.9%. Given the Q4 2025 results, we see a company that managed to beat revenue expectations but is still struggling with profitability and year-over-year growth. The stock’s 20.7% drop since the start of the year shows a strong bearish sentiment from the market. This performance is consistent with the broader cannabis sector, as the AdvisorShares Pure US Cannabis ETF (MSOS) also saw a decline of roughly 18% in 2025 due to persistent price compression in key states and delays in federal reform. The bearish trend and the stock’s official “Sell” rating suggest that buying puts or establishing bear call spreads could be a primary strategy. This allows traders to profit from further downside or a sideways drift. Looking back at 2025, we recall similar earnings reports for cannabis operators often led to a post-announcement stock decline, even when top-line numbers were met, as investors focused on the lack of profitability. However, implied volatility is a key factor to watch in the coming days. With the earnings uncertainty now passed, we expect implied volatility to decrease, making it more expensive to hold long options. Traders could consider selling premium, such as cash-secured puts at a lower strike price, to bet that the worst of the sell-off is over without needing a significant rally. The major wild card remains federal regulatory news, specifically the DEA’s rescheduling process which saw numerous delays throughout 2025. Any unexpected positive announcement on this front could cause a sharp rally, punishing outright bearish positions. Therefore, using defined-risk spreads is a more cautious approach than buying naked puts or shorting the stock.

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Danske Bank said the key US release is the February jobs report, used to gauge the dollar’s direction. It expects Nonfarm Payrolls to slow to 70k from 130k in January, with unemployment unchanged at 4.3%. It reported that high-frequency indicators have pointed to firmer labour conditions into February, including jobless claims, ADP’s weekly private sector estimate, and Indeed Hiring Lab’s daily job postings. Weekly initial claims were 213k for the week ending 28 February.

High Frequency Labor Signals

Continuing claims edged up slightly. The February Challenger report showed layoff announcements fell to 48.3k from January’s 108k, seasonally adjusted, while hiring announcements stayed subdued. Flash Q4 productivity growth slowed to 2.8% q/q at an annualised rate, from 5.2% in Q3, alongside a weaker GDP reading. Unit labour cost growth rose to 2.8% q/q annualised, from -1.8% in Q3. It noted that a stronger jobs report could add pressure on US bond yields and swap rates. It also referenced rises in the VIX index, the Move index, and credit spreads such as ITRAX, with only modest movement in the Schatz ASW-spread. Looking back to this time in 2025, we recall the consensus was for a slowdown in the US labor market, with forecasts for the February jobs report around 70k. The actual number surprised everyone by coming in significantly stronger, which added upward pressure to bond yields for much of that year. This history provides a critical backdrop for interpreting the current market setup.

Derivative Positioning For Volatility

Now, the February 2026 jobs report just showed a robust headline gain of 275,000, but the unemployment rate also unexpectedly ticked up to 3.9%. This mixed signal, with strong hiring but rising unemployment, creates uncertainty about the Federal Reserve’s next move. Derivative traders should be positioned for the volatility this data conflict will likely create in the coming weeks. Unlike early 2025, when a strong report led to a straightforward rise in yields, the current situation is more complex. The MOVE index, a measure of bond market volatility, is elevated near 105, showing traders are already pricing in uncertainty around interest rate direction. This suggests strategies that profit from a large move in either direction, such as buying straddles on Treasury futures, could be effective. In the equity markets, we are not seeing the same caution that was building a year ago. The VIX index is currently low, trading around a complacent level of 14, which makes protective put options on indices like the S&P 500 relatively cheap. Given the conflicting signals from the labor market, buying this inexpensive insurance against a potential downturn is a prudent move. We are also watching labor cost pressures, which have proven stickier than anticipated through 2025. Recent data shows average hourly earnings are still growing at a pace inconsistent with the Fed’s 2% inflation goal. This supports derivative positions that benefit from a “higher for longer” interest rate environment, such as paying fixed in interest rate swaps. Create your live VT Markets account and start trading now.

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ECB policymaker Olaf Sleijpen said monetary policy is in a good place and that the central bank can tolerate a small inflation overshoot. He said this tolerance would be similar to how the ECB can tolerate inflation undershooting its aim. Sleijpen said he has not dramatically changed his view on the policy outlook. He said lessons were learnt from 2021/22, but that comparisons with the current situation are not entirely valid.

Policy Tolerance For Inflation Overshoot

He also said the Dutch central bank is comfortable holding gold reserves at the US Federal Reserve. He said he is confident in the Fed’s swap lines. Markets showed little immediate response to the comments. At the time of reporting, EUR/USD was almost flat at around 1.1600. Recent remarks suggest a willingness to let inflation run slightly above the 2% target without immediate action. This is significant for us, especially with the latest Eurostat data showing headline inflation ticking up to 2.3% in February 2026. This reinforces the idea that the European Central bank will not be rushed into a hawkish policy turn. We are seeing this dovish stance in the context of a fragile economic recovery. Looking back, we saw that GDP growth in the final quarter of 2025 was a very weak 0.1%, and recent business surveys suggest manufacturing activity remains subdued. This contrasts sharply with the high-growth, high-inflation environment of 2021/22, supporting the view that the current situation is different and warrants patience.

Trading Implications For Rates Fx And Volatility

For interest rate traders, this suggests that the ECB’s deposit facility rate, which we’ve seen held steady at 3.5% for months, is likely the peak for this cycle. Derivative markets should now price in a lower probability of any further rate hikes in 2026. This may increase the appeal of positions that benefit from stable or falling short-term rates in the second half of the year. This policy divergence could weigh on the Euro, particularly against the dollar, if the Federal Reserve maintains a less accommodative stance. However, the initial flat reaction in EUR/USD around 1.1600 suggests the market is not expecting dramatic moves. This points toward opportunities in selling volatility, as the “we are in a good place” comment implies a period of stability. Given this backdrop, selling out-of-the-money put options on European stock indices like the Euro Stoxx 50 could be an effective strategy. The VSTOXX volatility index has recently fallen to a 12-month low near 14, making option premiums less expensive but still attractive for sellers who expect stability. This approach benefits from both the supportive monetary policy and the current low market volatility. Create your live VT Markets account and start trading now.

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EUR/USD stayed in a tight range around 1.1600 in European trading on Friday, ahead of the US Nonfarm Payrolls (NFP) release for February at 13:30 GMT. The US Dollar Index traded near 99.00 and remained close to a three-month high of 99.68 set on Tuesday. Markets expected 59K new US jobs, down from 130K in January. The Unemployment Rate was forecast at 4.3%, while Average Hourly Earnings were seen unchanged at 3.7% year-on-year.

Shift In Rate Expectations

Rate expectations shifted after the ADP Employment Change report showed higher-than-expected hiring in February. In the CME FedWatch tool, the odds of the Fed keeping rates steady in July rose to 47.4% from 33.4% a week earlier. In the Eurozone, the European Central Bank was expected to keep rates steady for longer despite the war in the Middle East. ECB President Christine Lagarde said policy was “not on a preset course” and that the bank was monitoring the war’s effects. NFP measures monthly US employment changes excluding farming. It can affect Fed policy, the US Dollar, gold prices, and market expectations across other parts of the jobs report. Looking back to early 2025, we saw the EUR/USD pair hovering around 1.1600 as the market braced for key Nonfarm Payrolls data. At that time, expectations for a Federal Reserve interest rate cut in July were diminishing due to a resilient labor market. This dynamic set the stage for a stronger dollar over the subsequent year.

Inflation And Policy Outlook

Fast forward to today, March 6, 2026, the situation has evolved significantly, with the pair now trading closer to 1.0750. Persistent inflation throughout 2025 prevented both the Fed and the European Central Bank from easing policy as much as the market had initially anticipated. We are now contending with a global economic environment where price pressures remain a primary concern. Recent statistics reinforce this cautious outlook, with the US Consumer Price Index for January 2026 showing a year-over-year increase of 3.3%, slightly above forecasts. In the Eurozone, Eurostat’s flash estimate for February showed inflation holding steady at 2.8%, underscoring the ECB’s challenge. This stubbornness is forcing traders to rethink the path of monetary policy for the remainder of the year. As a result, we’ve seen a dramatic repricing in rate expectations, with the CME FedWatch Tool now indicating only a 25% probability of a Fed rate cut by its May meeting. This is a considerable drop from the 60% chance priced in at the start of the year. Derivative traders should therefore position for a scenario where interest rates remain higher for longer. For the coming weeks, the focus is once again on the February jobs report, with economists forecasting a payroll addition of around 190,000. A stronger-than-expected number would likely push the EUR/USD lower, making short-term put options a viable hedge against a break below the 1.0700 level. A surprisingly weak report, however, could fuel speculation of an earlier Fed pivot and benefit those holding call options. Given the uncertainty, implied volatility on near-term EUR/USD options has been rising, signaling that the market anticipates a significant price move. Traders who are directionally neutral but expect a breakout could consider using strategies like a long straddle. This approach would be profitable if the jobs data triggers a sharp move in either direction, breaking the pair out of its current range. Create your live VT Markets account and start trading now.

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Rabobank’s RaboResearch examines how the Middle East conflict, and higher oil and European gas prices, may affect the Eurozone economy. Its updated baseline puts inflation in 2026 about 0.5 percentage points higher and growth 0.1 percentage points lower than its pre-conflict projections. It forecasts Eurozone HICP inflation averaging 2.4% in 2026, then easing to 1.9% in 2027. The report states that each escalation scenario cuts growth by a further 0.1 percentage points.

Energy Shock And Inflation Outlook

In the most disruptive scenario, where critical energy infrastructure is out of operation for an extended period, inflation rises to over 5%. It also peaks above 6% in late 2026. Only Scenario 3, described as the destruction of critical energy infrastructure, shows economic growth falling by 0.7 percentage points. Across the four largest member states, the projections indicate Germany and Italy are hit more than France and Spain. The article notes it was produced using an AI tool and reviewed by an editor. We are adjusting our view for the Eurozone, as the ongoing energy shock from the Middle East reshapes the economic landscape. With Brent crude recently touching $95 and TTF gas futures trading over €45/MWh, our models now point to average inflation of 2.4% for 2026. This reflects how strongly geopolitical events are influencing domestic prices.

Growth Risks And Market Implications

The latest flash estimate from Eurostat showing February’s HICP inflation at 2.7% confirms this upward trend, moving further from the ECB’s 2% target. Consequently, interest rate markets are rapidly pricing out any remaining expectations for a rate cut this year. This situation is reminiscent of the tough policy choices we saw central banks face back in 2022. At the same time, economic activity is weakening, with our growth baseline for 2026 now lowered by 0.1 percentage points. This is supported by the latest German Ifo Business Climate Index, which fell unexpectedly last week, signaling a contraction in manufacturing sentiment. This combination of rising prices and slowing growth points towards a difficult period ahead. We must now consider the significant tail risk of a more disruptive scenario involving damage to critical energy infrastructure. In such a case, inflation could surge above 5%, a level that would almost certainly trigger a recession as economic growth could fall by as much as 0.7 percentage points. This potential for extreme volatility means options protecting against sharp market moves are becoming more attractive. Looking at the four largest economies, we project that Germany and Italy will bear the brunt of this energy shock more than France and Spain. Their higher industrial reliance on energy imports makes them particularly vulnerable, a pattern we also observed during the energy crisis that began in 2022. This divergence suggests opportunities in relative value trades, betting on German underperformance against French assets. Create your live VT Markets account and start trading now.

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Brent oil eased to about US$85 per barrel as the US administration reviewed policy tools to manage higher oil and petrol prices linked to the war in Iran. Markets in Asia and globally remained cautious about weekend gap risks. Possible measures include releasing crude from the US emergency oil reserve, potentially alongside other countries, to increase the effect. Other options mentioned were waiving fuel-blending rules and direct intervention in oil futures markets.

Policy Options Under Review

These discussions follow earlier plans for insurance guarantees and naval escorts to support safe passage for oil tankers and other vessels through the Strait of Hormuz. The US Treasury announced waivers allowing India to buy Russian oil for 30 days, running until 4 April 2026. The overall impact on global oil markets, including Asia, was described as uncertain. The article was produced using an artificial intelligence tool and reviewed by an editor. We are seeing Brent oil prices ease to around $85 a barrel as the US administration signals it might use several policy tools to manage fuel costs during the Iran conflict. This government pressure is creating significant uncertainty, which traders must now factor into their strategies. The market is nervous about potential sudden moves, especially over weekends.

Market Volatility And Positioning

The options being discussed range from releasing oil from the Strategic Petroleum Reserve (SPR) to waiving fuel-blending rules and even directly intervening in the futures market. After seeing national average gasoline prices tick up to $4.15 last week, the political will to act is clearly growing. This makes any long positions feel particularly risky right now. This threat of intervention has pushed the CBOE Crude Oil Volatility Index (OVX) up nearly 15% in two weeks, making options contracts more expensive. We all remember the large-scale SPR releases during the 2025 supply crunch, which temporarily capped prices but did little to solve underlying issues. With the SPR currently holding a historically low 375 million barrels, another large release would be a powerful but perhaps limited tool. Adding another layer, the US Treasury has given India a temporary waiver to purchase Russian oil until April 4th. This suggests the administration is trying to balance multiple pressures by ensuring global supply is not overly constricted. This pragmatic move further dampens the bullish sentiment that would normally dominate during a major conflict in the Middle East. Given these conflicting signals, we believe caution is the best approach for the coming weeks. The clear bearish risk from a policy announcement is fighting the bullish risk from geopolitical escalation. This environment makes it difficult to hold directional bets, suggesting strategies that profit from high volatility or hedge against a sharp downturn could be more prudent. Create your live VT Markets account and start trading now.

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Japan’s Finance Minister Satsuki Katayama said compiling an extra budget remains an option, as the Prime Minister has stated before. She said the government is ready to take timely steps to limit the economic impact from the Iran conflict. Katayama also said Japan has not fully exited deflation. She linked possible policy action to economic conditions.

Policy Signals Diverge

Bank of Japan Deputy Governor Ryozo Himino said the BoJ is keeping monetary conditions accommodative. He said the bank will gradually adjust the degree of monetary accommodation. Himino said Japan is seeing inflation in the sense that consumer prices are rising, and that it is for the government to decide whether Japan is completely out of deflation. He said underlying inflation is gradually accelerating towards the BoJ’s 2% target. He added that the BoJ will keep scrutinising market moves and their impact on the economy and prices. At the time of publication, USD/JPY was up 0.16% at 157.80. The conflicting signals from the government and the Bank of Japan create uncertainty, which means we should expect volatility in the yen to increase. The Finance Minister’s mention of stimulus contrasts with the central bank’s hint at slowly tightening policy. This divergence suggests that positioning for a significant price swing, rather than a specific direction, could be a primary strategy.

Options Positioning And Key Levels

We must pay close attention to the Bank of Japan’s gradual adjustment language, as it hints at a move away from their ultra-easy policy. With the latest Tokyo Core CPI data for February 2026 showing inflation holding at 2.4%, well above the 2% target for over a year, the pressure for a rate hike is building. This environment makes buying call options on the JPY (put options on USD/JPY) an interesting play on a surprise policy shift. However, the government is clearly worried about the economy and is not convinced deflation is defeated, which could keep the yen weak. We remember how the Ministry of Finance stepped in with massive yen-buying intervention in late 2025 when the dollar-yen rate approached 160. Given we are now at 157.80, selling USD/JPY call options with a strike price near that 160 level could be a viable strategy to collect premium, betting that the government will act again. The geopolitical situation with Iran and the strong US economy add another layer of complexity. An escalation could increase oil prices, which typically weakens the import-dependent yen, but it could also trigger a flight to safety benefiting both the dollar and the yen. Meanwhile, with the US economy adding a robust 275,000 jobs last month in February 2026, the Federal Reserve is unlikely to cut interest rates, keeping the dollar fundamentally strong. Given these dynamics, traders might consider strategies that benefit from a cap on USD/JPY upside while offering protection against a sudden drop. A call spread on USD/JPY allows for modest gains but protects against the risk of intervention that we saw in 2025. Alternatively, owning outright JPY calls provides a direct bet that the BOJ will finally act more decisively than the market expects. Create your live VT Markets account and start trading now.

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South Africa’s net gold and foreign exchange reserves rose to $75.835 billion in February. The previous level was $74.877 billion. This is an increase of $0.958 billion from January to February. The figures are in US dollars.

Implications For The Rand

The rise in South Africa’s net gold and forex reserves to $75.835 billion is a bullish signal for the Rand. This larger buffer gives the central bank more firepower to manage currency volatility in the coming weeks. We are seeing one-month implied volatility on USD/ZAR options already contracting, suggesting traders are pricing in greater stability. This strengthened position reduces the likelihood of a defensive interest rate hike from the South African Reserve Bank. We remember the pressure to hike rates in mid-2025 when the currency was under severe strain, so this provides welcome breathing room. This outlook could support government bond prices, which have seen yields on the 10-year note tighten by 15 basis points over the last week. A more stable Rand makes local equities more attractive to offshore investors, who are sensitive to currency risk. The Johannesburg Stock Exchange recorded net foreign inflows of R4.2 billion in February 2026, a sharp reversal from the outflows seen in the final quarter of last year. We should anticipate this trend to continue, favouring call options on the FTSE/JSE Top 40 index. However, we must watch global factors, particularly commodity prices and US monetary policy. We saw how quickly sentiment turned in late 2025 following hawkish signals from the US Federal Reserve. Given the current stability, selling short-dated USD/ZAR volatility could be an effective strategy to capitalize on a potential period of calm.

Key Global Risks To Monitor

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South Africa’s gross gold and foreign exchange reserves rose to $81.06 billion in February. This was up from $80.19 billion in the previous month. The increase was $0.87 billion. This equals about a 1.1% month-on-month rise. The recent increase in South Africa’s gross reserves to $81.06 billion is a positive signal for currency stability. This larger buffer gives the central bank more power to manage the rand’s (ZAR) value. For traders, this reduces the risk of sudden, sharp depreciation in the currency. We see this as a reason to consider positions that benefit from a stable or strengthening rand against the US dollar. This could involve buying ZAR call options or selling USD call options, which would profit if the USD/ZAR exchange rate falls in the coming weeks. The enhanced reserve position provides a solid backstop for these types of trades. This view is supported by recent inflation data, which showed a slight cooling to 5.2% in January 2026, moving closer to the central bank’s target range. When we saw a similar reserve build-up in the third quarter of 2025, it preceded a period of rand outperformance against other emerging market currencies. The current situation, combined with stronger-than-expected GDP growth of 1.4% for the final quarter of 2025, suggests a more resilient economic backdrop. Beyond currency, this stability is good for the broader South African market. International investors value currency predictability, which could lead to inflows into local equities. We should therefore watch for opportunities in derivatives linked to the JSE Top 40 Index, as positive sentiment could drive the index higher. Looking back, we remember the volatility in early 2025 when global risk-off sentiment put severe pressure on the rand. The reserve levels at that time were nearly 5% lower, offering less of a cushion. The current, stronger position suggests the currency may be better insulated from similar external shocks. This stability implies that expected volatility in the rand may decrease. As a result, options on the USD/ZAR pair could become less expensive. This environment is favorable for strategies that profit from lower volatility or a steady, predictable move in the exchange rate.

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USD/CHF slipped after a 0.25% rise in the prior session, trading near 0.7810 in Asian hours on Friday. The US Dollar found support as expectations for Federal Reserve rate cuts eased, with oil prices rising amid the Middle East conflict and officials still considering further hikes if inflation stays above target. The Iran war reached its seventh day after Iran launched missiles and drones across the Gulf on Thursday, hitting an oil refinery in Bahrain. Israel continued airstrikes on Tehran, and the US suspended operations at its embassy in Kuwait.

Key Data And Fed Focus

Chicago Fed President Austan Goolsbee said institutions are facing a trust crisis and stressed the importance of Fed independence for inflation control. Markets are waiting for US data, including Nonfarm Payrolls with a 59K consensus for February after 130K in January, and Retail Sales expected to fall 0.3% month-on-month in January after no change previously. The Swiss Franc may gain on safe-haven demand amid geopolitical tension, while SNB Vice-President Antoine Martin repeated that the bank is ready to intervene to limit excessive CHF strength. CHF is widely traded and was pegged to the euro from 2011 to 2015, with the removal followed by a rise of more than 20%. The SNB meets four times a year and targets inflation below 2%, with higher rates usually supporting CHF and lower rates weakening it. CHF often tracks the euro due to Swiss ties to the Eurozone, with some estimates putting the correlation above 90%. With USD/CHF trading near multi-decade lows around 0.7810, we are seeing a classic conflict between opposing market forces. The new war in the Middle East is driving safe-haven flows into the Swiss Franc, pushing the pair down. However, the same conflict is causing oil prices to surge, which supports the US Dollar by fueling inflation fears and keeping the Federal Reserve hawkish.

Volatility And Positioning

Derivative traders should prepare for significant volatility as these factors pull the market in different directions. The ongoing conflict has pushed West Texas Intermediate (WTI) crude oil prices above $105 a barrel, a sharp increase that complicates the Fed’s inflation fight ahead of its next meeting. This reinforces the view that rate cuts are off the table for now, putting a floor under the dollar. The upcoming US Nonfarm Payrolls report is a critical event that could trigger a sharp move in the pair. The consensus expectation of a weak 59K print for February contrasts sharply with the stronger job gains we consistently saw through most of 2025. A number significantly different from the forecast will likely cause a major repricing of Fed expectations and the dollar’s direction. Options strategies that profit from price swings, rather than direction, appear most prudent in the coming weeks. Given the uncertainty, purchasing long straddles or strangles could allow traders to benefit from a breakout in either direction. Implied volatility has already risen sharply since the conflict began, reflecting the market’s nervousness. We must pay close attention to the Swiss National Bank, as its officials have already stated their readiness to intervene. The SNB has a long history of selling the Franc to prevent it from becoming too strong, and its foreign currency reserves remain substantial at over 700 billion CHF. Any sign of intervention would quickly reverse the Franc’s gains, regardless of safe-haven demand. Therefore, the key catalysts to watch are developments in the Iran war and the release of US labor market data. A de-escalation of the conflict could simultaneously weaken the Franc’s safe-haven appeal and lower oil prices, creating a double tailwind for USD/CHF to move higher. Conversely, an escalation would intensify the current tug-of-war. Create your live VT Markets account and start trading now.

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