US EIA data showed a natural gas storage change of -132B on 27 February. This compared with an expected change of -122B. The reported draw was 10B larger than forecast. The update relates to US natural gas stocks for that reporting period.

February 2025 Storage Surprise

Looking back to the week of February 27, 2025, we saw a natural gas storage draw of 132 billion cubic feet (Bcf), which was significantly more than the 122 Bcf the market was expecting. That surprise withdrawal signaled a tighter supply balance than many had priced in at the time. This event serves as a critical reference point for our current market position. The situation now is far more tense than it was a year ago. As of the latest report for the week ending February 28, 2026, working gas in storage is just 1,550 Bcf, which is over 30% below the five-year average for this time of year. This deficit has been driven by consistently strong demand, particularly as U.S. LNG export capacity has expanded by nearly 2 Bcf/day since early 2025, pulling more supply out of the domestic market. Current weather forecasts for the next two weeks show a persistent cold front moving across the Midwest and Northeast, which will increase late-season heating demand. Unlike last year, we do not have a significant storage buffer to absorb this demand spike. This makes the market highly susceptible to price volatility on any further bullish news.

Positioning And Risk Management

Given these conditions, we see a strong case for upward price movement in the near term. The low inventory levels heading into the spring injection season mean there will be intense competition for gas, supporting prices through the coming months. Therefore, we should consider establishing or adding to long positions in the April and May 2026 futures contracts. Dry gas production has been hovering around 104 Bcf/day, and while that is robust, it is struggling to keep pace with the combined winter demand and record export levels. Buying call options could be a prudent strategy to manage risk while maintaining exposure to potential price spikes. The market is extremely sensitive to any further supply disruptions or demand surprises. Create your live VT Markets account and start trading now.

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GBP/USD fell on Thursday, with the pair trading at 1.3337, down 0.25%. Market conditions were affected by Middle East tensions and US labour data ahead of Friday’s Nonfarm Payrolls report. Hostilities involving the US, Israel and Iran continued for a sixth day, while Wall Street opened lower. The US Dollar Index (DXY) rose for a third day and was up 0.25% at 99.00.

Middle East Tensions And Dollar Strength

US Initial Jobless Claims for the week ending February 28 held at 213K versus estimates of 215K. The Fed’s Beige Book said the labour market was “generally stable”, with seven of twelve districts reporting no change in hiring. Challenger, Gray & Christmas reported 48.3K job cuts in February, down 55% from January. Richmond Fed President Thomas Barkin said recent inflation data raises doubts about whether the Fed has finished dealing with inflation. In the UK, there were no major data releases, while Labour lost local elections in Manchester. Forecasts for US NFP include 59K job gains and an Unemployment Rate of 4.3%. On the chart, GBP/USD traded near 1.3331, below moving averages near 1.3500, with resistance around 1.3400 and 1.3500. Support levels were cited at 1.3300, 1.3250 and 1.3200. We remember watching a similar dynamic back in early 2025, when strong US jobs data and a hawkish Fed sent GBP/USD tumbling toward 1.3300. Today, the fundamental picture has shifted, with the pair trading much lower around 1.2850 as both the Fed and the Bank of England signal a peak in their tightening cycles. This change suggests that the straightforward dollar strength trades of last year require a more nuanced approach.

Reframing The Options Playbook

The US labor market, while still healthy, is no longer showing the overwhelming strength we saw in 2025. The most recent Non-Farm Payrolls report for February 2026 showed a gain of 185,000 jobs, and the unemployment rate has ticked up to 3.8%. This cooling trend reduces the likelihood of further Fed hawkishness, capping the upside for the US dollar and making long dollar call options less attractive than they were previously. Implied volatility has also decreased significantly since the periods of heightened Middle East tension we observed in 2025. With the Cboe Volatility Index (VIX) currently trading at a relatively calm 14.5, option premiums are lower, making this a potentially opportune time to sell options. Strategies that benefit from range-bound price action, such as an iron condor on GBP/USD, could be considered to collect premium while the market awaits a new catalyst. In the UK, our focus has shifted from the political headlines of 2025 to persistent economic weakness, with the latest GDP figures showing the economy grew by a meager 0.2% in the last quarter. UK inflation also remains sticky at 3.1%, putting the Bank of England in a difficult position. This underlying fragility of the Pound suggests that any rallies are likely to be sold into, making it wise to consider buying GBP put options as a hedge or a speculative downside play. The technical outlook continues to favor downside, with GBP/USD struggling to overcome resistance at the 1.3000 psychological level. Given this, we see value in using derivative structures that express a cautiously bearish view for the coming weeks. A bear put spread, buying a put at the 1.2800 strike and selling one at the 1.2650 strike, would offer a defined-risk way to profit from a gradual slide in the currency pair. Create your live VT Markets account and start trading now.

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We are seeing a familiar bearish structure developing in the S&P 500, reminiscent of a pattern that formed in 2025. Looking back from that time, we identified an A-B-C Elliott Wave formation that correctly anticipated a 166-point market drop. That setup involved a sideways triangle consolidation followed by a decisive break of a key trendline. Today, in early March 2026, the index is showing similar signs of exhaustion after failing to break new highs last week. The latest Non-Farm Payrolls report on February 28th showed a slight cooling in the labor market, which the market initially ignored but now seems to be weighing on sentiment. We see this as the potential end of a corrective B-wave, setting up another move down.

Key Trendline Break Watch

Derivative traders should be watching the 7150 level on the SPX, which represents the current key trendline. A definitive break and close below this level would provide the bearish confirmation we are looking for. This would signal that the C-wave down has likely begun. For the coming weeks, this suggests a strategy of buying out-of-the-money put options with late-April expirations. Specifically, the 7000 and 6950 strike prices offer an attractive risk-reward profile for a potential sharp decline. Selling call credit spreads above the recent highs of 7280 could also be an effective way to generate income while maintaining a bearish bias. The CBOE Volatility Index (VIX) has been slowly climbing, recently closing at 19.2, up from a low of 16 just three weeks ago. This is still modest compared to the spikes above 27 we saw during the 2025 downturn, indicating that option premiums for protection are not yet excessively expensive. A move in the VIX toward 22 would add conviction to the bearish outlook. If the trendline at 7150 breaks, our initial target would be in the 6980 area, which aligns with key support levels from the fourth quarter of 2025. This move would mirror the magnitude of the drop we successfully forecasted last year. Traders should consider setting profit targets ahead of this level.

Downside Targets And Confirmation

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TD Securities expects the Bank of Canada to weigh trade uncertainty, higher oil prices and domestic demand. It says GDP needs to run above potential to avoid disinflation risks and possible rate cuts, with Q1 data a key test. The Bank of Canada’s January Monetary Policy Report forecast 1.8% growth, while TD Securities flags that growth materially below 1.0% would raise doubts about the current stance. It adds that policy may not respond to structural weakness, but could react to cyclical shocks.

Oil Prices And Growth Outlook

The January 2026 MPR assumed $55/bbl WTI, while current levels are around $75–$80 for WTI/Brent. If those prices hold, TD Securities estimates they could add 0.4–0.5 percentage points to growth and lift the inflation profile by a similar amount, with headline CPI near 2.5% by Q4. It expects higher energy prices to support a hold decision in a close call, but notes consumer conditions and government spending may matter more for the outlook. It also says the Bank may look through any headline inflation rise if it does not feed into core measures. We see the Bank of Canada in a delicate balancing act, waiting for key economic data before making its next move. The primary focus is on Q1 growth, where a figure significantly below 1.0% would amplify calls for a rate cut. This creates a data-dependent environment for the Canadian dollar and short-term interest rates. Elevated energy prices are currently providing a strong tailwind against rate cut expectations. With WTI crude holding steady near $78 a barrel following the OPEC+ decision last month to extend production cuts, prices are well above the Bank’s January forecast of $55. This price strength directly supports our economic growth and inflation profiles, making it harder for the Bank to justify easing policy.

Rates Volatility And Trading Positioning

This situation suggests positioning for increased volatility in Canadian interest rate markets over the next several weeks. Trading strategies using options on Bankers’ Acceptance futures could be beneficial, as they can profit from a significant market move in either direction. The upcoming release of monthly GDP and employment figures for February will be the next major catalysts. We must remember that the boost from energy could be secondary to the health of the Canadian consumer. Looking back at the sluggish retail sales data from the final quarter of 2025, it’s clear that household spending remains a significant point of vulnerability. Any signs that this weakness is carrying over into the new year could easily outweigh the positive impact of oil prices. Consequently, the Canadian dollar is facing a pivotal period against the US dollar. We anticipate the currency will be highly sensitive to upcoming inflation reports, specifically the core CPI measures. A failure of core inflation to rise alongside the energy-driven headline number would signal to us that the Bank of Canada can ignore the oil price shock and lean towards a more dovish stance. Create your live VT Markets account and start trading now.

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Geopolitical tension in the Middle East and higher energy prices are supporting the US Dollar. ING expects the DXY index to move towards the upper end of its recent trading range. Markets are watching European natural gas prices, with a move higher linked to a potential rise in DXY towards the 99.40 to 99.50 area. The focus remains on near-term price moves in energy markets.

Fed Beige Book Signals Mixed Growth

In the US, the Federal Reserve’s Beige Book ahead of the 18 March FOMC meeting described growth as mixed to subdued, with a similar tone for the labour market. It also noted that some firms may pass tariff costs to consumers, while raising doubts about the ability of lower-income consumers to absorb higher prices. Attention is also on US private credit, including redemption pressures at business development companies (BDCs). BDCs are investment companies aimed at wealthy retail clients, and they typically invest funds in small and medium-sized enterprises. Some large BDCs linked to Blue Owl and Blackstone are seeing heavy redemptions. Market attention is on whether redemptions accelerate, whether limits or halts are imposed, and whether illiquid assets would need to be sold to meet withdrawals. With ongoing uncertainty, we see the US dollar finding continued support as a safe haven. Geopolitical risks in the Middle East persist and European natural gas prices have jumped over 15% in the last month, reinforcing a risk-off sentiment. Derivative traders should consider strategies that benefit from a strong dollar, such as buying DXY call options targeting the 106 level.

Private Credit Liquidity Risk

Looking back, we recall similar analysis in 2025 that pointed to the DXY pushing towards 99.50 on the back of energy price concerns. While the index is now trading much higher, around 104.75, the underlying drivers remain firmly in place. This suggests the path of least resistance for the dollar is still upwards in the near term. We are also paying close attention to signs of stress in the US private credit market, which has grown to over $1.7 trillion. There are mounting concerns over investor redemptions from large business development companies (BDCs). For instance, certain high-profile BDC funds have seen withdrawal requests exceed their stated quarterly limits for several consecutive quarters. This situation presents a tangible risk of a liquidity event if BDCs are forced to sell illiquid loans to meet these redemptions. Such a credit event would likely fuel a more aggressive flight to safety, further strengthening the dollar. Traders could hedge this risk by purchasing put options on ETFs exposed to regional banks or high-yield debt. The combination of these factors is elevating market nervousness, as seen by the VIX index climbing from 14 to over 18 recently. This backdrop of rising implied volatility makes strategies like long straddles or strangles on major equity indices appealing. Such positions would profit from a significant market move in either direction, which seems increasingly likely. Create your live VT Markets account and start trading now.

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The Canadian Dollar (CAD) has been the only major currency to remain steady against the US Dollar since the US/Iran conflict began on Saturday. Markets have shown risk-averse behaviour, while G10 currency moves have broadly returned to historical patterns. Short-term rates markets are pricing a neutral path for the Bank of Canada (BoC). Yield spreads have been somewhat disconnected from the CAD, and the correlation between the CAD and crude oil has been weak. Scotiabank’s fair value estimate for USD/CAD is 1.3599, just below 1.36. USD/CAD has traded defensively for two sessions, with steady losses after Tuesday’s ‘shooting star’ doji candle. The Relative Strength Index (RSI) is drifting further below 50, which points to increasing bearish momentum. Support is limited between current levels and the low 1.35, with an expected near-term range of 1.3580 to 1.3680. The article notes it was created with the help of an Artificial Intelligence tool and reviewed by an editor. Looking back to early 2025, we saw the Canadian dollar show remarkable resilience against the US dollar, especially during the geopolitical tensions with Iran. At that time, a neutral Bank of Canada and technical indicators suggested a defensive, slightly bearish tone for the USD/CAD pair. The market was largely confined to a tight range between 1.3580 and 1.3680. The situation has since shifted, and our view must adapt as USD/CAD now trades closer to 1.3850. The key driver is the growing divergence in monetary policy, with recent Canadian inflation data for February 2026 coming in at 2.1%, while US inflation remains stickier at 2.8%. This data reinforces expectations that the Bank of Canada will likely begin cutting interest rates before the US Federal Reserve. For derivative traders, this outlook supports positioning for further USD/CAD strength in the coming weeks. Buying USD call options against the CAD is a direct way to express this view, especially as implied volatility is currently subdued near multi-month lows. This makes the cost of establishing bullish positions relatively inexpensive. The historical correlation between crude oil and the Canadian dollar also appears less reliable now. Even with WTI crude prices holding firm around $85 per barrel, the CAD has failed to gain significant ground. This confirms that interest rate differentials are the dominant factor driving the currency pair. A prudent strategy would be to consider bull call spreads to manage costs while targeting a measured move higher. For instance, buying a 1.3900 strike call and simultaneously selling a 1.4100 strike call for a late April expiry offers a defined-risk way to profit from a continued upward trend. This structure takes advantage of the current environment without over-committing to a dramatic breakout.

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Bitcoin has moved through the $74K resistance area and the short-term structure points to $76K–$77K. The longer-term Wave-5 projection sets an upside path towards $126K+. Gold and silver are described as staying in a downtrend, with gold meeting resistance at 5,250–5,275. The downside path is mapped towards 5,000, with further support zones at 4,800–4,850.

Current Market Context And Risk Appetite

Nifty 50 is shown consolidating, with support marked at 24,300 and a wider support band of 24,300–24,650. A next-session plan covers gap-up conditions and upside targets. Bank Nifty is presented as nearing a breakout above 59,000, with a move aimed at 60,000–60,500 using Wave-3 Fibonacci extensions. A next-session plan lists breakout triggers. Tata Steel is mapped with a structure aiming for a 200–205 supply zone, plus a next-session roadmap. Kalyan Jewellers is assessed as being in a corrective phase, with resistance at 615. The video timeline runs from 00:00 to 23:58 and includes a section at 17:05 on a crypto–equities correlation and wedge structure. The author is Abhishek H. Singh (WaveTalks), described as having over a decade of Elliott Wave Theory experience.

Derivatives Playbook For The Next Phase

With Bitcoin now consolidating around $115,000, the macro Wave-5 projection toward $126,000 that we mapped back in 2025 appears to be in play. The total crypto market cap recently crossed $4 trillion for the first time, signaling a strong risk-on appetite spilling over from digital assets. Derivative traders should monitor this correlation, as continued crypto strength could fuel further upside in equities. Looking back, the consolidation Nifty 50 underwent around the 24,300 support zone in 2025 was the critical base for the current move toward 29,000. Now that we are holding above 28,500, implied volatility has been decreasing, as seen in India VIX dropping below 14 last week. Traders should consider buying dips and using call spreads to play for higher targets, as the underlying structure remains bullish. The breakout we anticipated in Bank Nifty above 59,000 last year was the trigger for its powerful rally, which is now testing the 68,000 level. Data showing private sector bank credit growth hitting 18% year-over-year for the quarter ending December 2025 supports this momentum. Long positions in Bank Nifty futures or bull call spreads seem favorable, targeting the next psychological level of 70,000. Precious metals present a more complex picture for traders. While gold did follow the downside roadmap toward the 5,000 level in 2025, persistent global inflation, which came in at 3.5% for January 2026, is now providing support. This suggests short positions are becoming risky, and traders could consider protective puts on equity positions or modest long positions in gold futures for hedging purposes. For specific equities, we saw Tata Steel successfully test and clear the 200-205 supply zone late last year, driven by the government’s infrastructure push. The stock is now building a base for its next move, making it a candidate for covered call strategies to generate income while waiting for the next breakout. Recent data on industrial production shows a solid 6% expansion, underpinning the bullish case for the metals sector. Kalyan Jewellers, which was stuck in a corrective phase for much of 2025, finally broke its key resistance at 615 in the last quarter. This breakout is gaining momentum, supported by strong festival season sales reported in early 2026. Derivative traders can see this as a catch-up play, with opportunities in long call options as it attempts to bridge the performance gap with the broader market. Create your live VT Markets account and start trading now.

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US initial jobless claims were 213K for the week ending 28 February, compared with 215K expected. The figure matched the prior week’s revised 213K, based on the US Department of Labour report released on Thursday. The four-week moving average fell by 4,750 to 215.75K from a revised 220.5K. Continuing jobless claims rose by 46K to 1.868M for the week ending 21 February.

Dollar Reaction After Claims Release

After the release, the US Dollar Index (DXY) traded near 99.10, up 0.33% on the day. The move followed the latest labour market data. Looking back at the jobless claims data from early 2025, we can see the first signs of a shifting labor market. While the steady initial claims number looked reassuring at the time, the jump in continuing claims was a clear signal that it was becoming harder for people to find new work. This was an early indicator that the tight labor market was beginning to soften. That trend has since become more pronounced, as the most recent data from February 2026 shows the unemployment rate has climbed to 4.1%. This has occurred alongside a cooling in inflation, with the latest Consumer Price Index (CPI) reading at a more manageable 2.6% year-over-year. The combination of these factors is strengthening the case for the Federal Reserve to consider easing monetary policy later this year. For derivative traders, this outlook suggests a pivot towards positioning for lower interest rates. We should be looking at options on SOFR futures, specifically buying calls or call spreads, to profit from the market’s increasing expectation of a rate cut by the third quarter. Historically, markets begin pricing in Fed pivots months in advance, and we are entering that window now.

Trading Implications Across Markets

This dovish sentiment will likely weigh on the US Dollar, which has already fallen 3% from its highs last quarter. We can express this view by buying put options on the US Dollar Index (DXY), targeting a move below the 97.00 level. Such a strategy provides a direct hedge against dollar weakness as rate cut expectations solidify. In the equity markets, the prospect of lower rates is typically supportive for corporate earnings and valuations. Therefore, we should consider adding bullish exposure through index derivatives. Buying call options on the S&P 500 for the second half of the year allows us to capitalize on potential market upside driven by a more accommodative Fed policy. Create your live VT Markets account and start trading now.

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The Pound has outperformed the Euro recently, linked to reduced expectations of Bank of England rate cuts. Rabobank does not class either currency as a safe haven. Rabobank expects EUR/GBP to stay near 0.87 over the next 1–3 months. It expects the pair to move modestly higher in H2 due to UK political risk, higher energy prices and sticky UK inflation.

Energy Prices And Inflation Outlook

The impact of higher energy prices on inflation is tied to how long disruption in the Strait of Hormuz lasts. Rabobank’s energy team expects the disruption to continue. Rabobank now expects UK CPI inflation to edge down to 2.5%, rather than return to just above 2% as previously forecast. It then expects CPI to rebound to 2.75% in Q3. May includes local elections in England and parliamentary elections in Scotland and Wales. Rabobank states that a poor Labour result could trigger a leadership challenge for Prime Minister Starmer, and that GBP could be weaker into mid-year and beyond. Looking back at analysis from early 2025, we saw the pound’s strength against the euro was linked to diminishing hopes for Bank of England rate cuts. Now in March 2026, this dynamic of inflation versus central bank policy remains the key driver for the currency pair. The market is still trying to price in the timing of the first move from the BoE.

Political Risk And Range Breakout

The forecast for sticky UK inflation last year proved correct, preventing the price pressures from falling back to the 2% target. We have seen the latest figures from the Office for National Statistics show that the Consumer Prices Index remains elevated at 3.4%, well above the Bank’s goal. This persistent inflation continues to support the pound by forcing the BoE to maintain a restrictive stance. Last year, there was a focus on the May 2025 local elections and the potential for a leadership challenge that could weaken sterling. While that specific risk has passed, the underlying sensitivity of the pound to political news and the UK’s high debt level, which currently stands at nearly 100% of GDP, is a lesson we must carry forward. Any questions about fiscal stability will likely weigh on the currency. The view in 2025 was for EUR/GBP to grind higher towards 0.87, but the pair has instead remained more contained, currently trading near 0.8550. Given the persistent inflation in the UK but ongoing political risks, traders should consider using options to position for a potential breakout from this range. Buying out-of-the-money EUR/GBP call options could be a low-cost way to prepare for any sterling weakness later in the year. Create your live VT Markets account and start trading now.

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Tom Barkin, President of the Federal Reserve Bank of Richmond, said the Fed will make decisions meeting by meeting. He said higher gas prices would add to inflation, and the Fed would need to judge how long any rise lasts. Barkin said 2.8% productivity is still a pretty good number. He said he does not yet have a sense of the economic effects of the Iran war.

Gas Prices And Inflation Risk

He said gas prices still affect sentiment and can reduce other spending. He said recent inflation data raises doubts about whether the Fed has finished dealing with inflation. He said corporate margins are steady in part because productivity helps firms absorb the impact of tariffs. He said the last couple of months of employment data has been reassuring. He said Fed policy remains modestly restrictive, while demand is still healthy. He said he favours a smaller Fed balance sheet, provided it does not cause adverse market reactions and the Fed can still control interest rates. The Federal Reserve’s “meeting by meeting” approach means we should expect continued volatility around key economic data releases. With the market currently pricing only a 25% chance of a rate cut at the next FOMC meeting, down from over 60% last month, any surprise in inflation or jobs data will cause significant repricing in interest rate futures. This uncertainty suggests that options strategies designed to profit from volatility, rather than direction, could be advantageous.

Positioning For Data Driven Volatility

Recent inflation data is giving the Fed pause, and traders should be positioned for a more hawkish stance than previously expected. With the last Consumer Price Index reading for January coming in hotter than anticipated at 3.3% year-over-year, the fight against inflation is clearly not over. We are seeing this caution reflected in the swaps market, which is now pricing in fewer rate cuts for the remainder of 2026. The risk from rising gas prices is a primary concern that will directly impact inflation sentiment. Brent crude is currently trading around $92 a barrel, driven by ongoing tensions related to the Iran war, and any further escalation could push prices higher. Traders should monitor energy markets closely, as a sustained move above $95 could force the Fed to delay any potential rate cuts even further. At the same time, the strong labor market gives the Fed cover to remain patient and hold rates steady. Last week’s employment report showed a solid gain of 210,000 jobs, reinforcing the view that demand remains healthy despite restrictive policy. This economic resilience complicates trades that are betting on an imminent economic slowdown forcing the Fed’s hand. Given the uncertain path forward, we should consider trades that benefit from sharp market movements around specific events. With the VIX hovering near 18, buying straddles or strangles on indexes like the SPX ahead of the next CPI release or FOMC announcement could be a viable strategy. This allows for a profitable outcome whether the market reacts with strong relief or renewed fear. Looking back at 2025, we saw how quickly sentiment could shift based on just a couple of data points, particularly during the market’s repricing in the fall. The current environment feels very similar, emphasizing that we must remain nimble. The Fed’s hesitance, combined with solid economic data, suggests the period of stable, predictable policy is not yet here. Create your live VT Markets account and start trading now.

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