Adobe Systems reported revenue of $6.4 billion for the quarter ended February 2026, up 12% year on year. EPS was $6.06, compared with $5.08 a year earlier. Revenue was above the Zacks Consensus Estimate of $6.28 billion, a +1.86% surprise. EPS also exceeded the $5.88 consensus estimate, a +3.1% surprise. Services and other revenue was $110 million versus an estimate of $110.81 million from five analysts. This was down 19.1% from the year-ago quarter. Subscription revenue totalled $6.2 billion compared with a $6.09 billion estimate based on four analysts. This was up 13% year on year. Products revenue was $90 million versus a $74.8 million estimate from four analysts. This was down 5.3% year on year. With Adobe beating both revenue and earnings estimates, we are seeing immediate positive sentiment. This strong performance, especially the 12% year-over-year revenue growth, suggests underlying business strength that should reduce near-term downside risk. Given that tech stocks have seen modest gains of around 4% since the start of the year, this solid report could make Adobe a standout performer. The most critical metric, subscription revenue, grew by 13% and surpassed expectations, which confirms the health of Adobe’s core business model. This strong result is likely fueled by continued enterprise adoption of Creative Cloud and Document Cloud, especially as recent data shows corporate IT spending on software has increased by 7% in the last quarter. This confirms that the company’s AI-driven features are successfully translating into durable revenue streams. From a derivatives standpoint, the uncertainty leading up to this announcement is now resolved, so we should anticipate a significant drop in implied volatility. We saw a similar pattern after the earnings report in the fourth quarter of 2025, when implied volatility fell by over 25% in the two trading days following the release. Traders who were short volatility through strategies like iron condors or strangles likely saw profits as the premium in their options decayed. Looking forward, the lower implied volatility makes bullish strategies more attractive. Buying call options is now cheaper than it was pre-earnings, offering a capital-efficient way to bet on continued upward momentum over the next few weeks. For those with a moderately bullish outlook, selling cash-secured puts at strike prices below the current level could also be a viable strategy to collect premium, supported by the Federal Reserve’s recent signal to hold interest rates steady. While the overall report is positive, we must note the continued decline in the smaller “Products” and “Services” revenue streams. The -5.3% and -19.1% year-over-year drops, respectively, highlight the ongoing transition away from legacy offerings. This reinforces that any long-term derivative positions must be tied exclusively to the performance of the subscription-based digital media and experience segments.

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The US goods trade deficit narrowed in January to USD 81.8bn from USD 99.2bn, as exports recovered. The deficit remained above the lows seen last autumn. The deficit is expected to widen later in the year, as import volumes are likely to recover. Data due include the University of Michigan flash March survey on consumer inflation perceptions.

Key Upcoming Data Releases

The Personal Consumption Expenditures (PCE) inflation measure for January is also scheduled for release. The January JOLTs report is due after a delay linked to the government shutdown. Looking back at early 2025, we saw a brief improvement in the US trade deficit. The consensus at the time was that this was temporary. The expectation was for the deficit to widen again as imports recovered. That old view is now being challenged by current data. The latest release from the Census Bureau for January 2026 showed the goods deficit unexpectedly shrank to $75.4 billion, driven by a surge in high-tech and energy exports. This trend has been building over the last quarter, bucking the earlier predictions. This sustained improvement in the trade balance suggests underlying strength for the US dollar. Traders should consider positions that benefit from a stronger dollar, such as buying call options on USD/JPY or put options on EUR/USD. These strategies could pay off if export strength continues to surprise the market.

Inflation And Rates Outlook

The focus on inflation has also shifted dramatically since we were watching those early 2025 reports. While geopolitical tensions and high fuel prices were the primary concern then, today the narrative is about disinflation. Core PCE inflation, the Fed’s preferred gauge, came in at 2.3% last month, fueling market expectations for rate cuts later this year. With the Federal Reserve now signaling a pivot towards easing, interest rate derivatives are key. Traders should look at futures options on the 2-year Treasury note to position for lower yields. The environment also suggests lower market volatility compared to the uncertainty we faced in 2025. Create your live VT Markets account and start trading now.

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USD/JPY rose for a fourth session, trading near 159.40 in early Europe on Friday. The Dollar stayed firm as markets and economists expect the Federal Reserve to keep rates unchanged next week, with the federal funds rate at 3.50%–3.75%. Traders are awaiting January’s PCE inflation data due on Friday, which will not include effects from the Iran war. They are also watching fourth-quarter US GDP growth and March consumer confidence.

Japan Signals Readiness In Fx Markets

Japan’s finance minister said authorities are ready to take measures in currency markets as oil prices rise. The Bank of Japan governor said a weaker Yen could raise imported inflation and may speed up policy normalisation, adding that exchange rates now affect inflation more than before. USD/JPY is nearing 160, a level linked to past intervention, while officials have said little. Japan depends heavily on Middle East oil and holds large reserves, which may allow the pair to stay near 160 with limited further Yen weakness. Japan plans to release about 80 million barrels from reserves, or about 45 days of supply. Around 95% of Japan’s oil imports come from the Middle East, with nearly 90% passing through the Strait of Hormuz, and traffic there has been largely blocked during the US-Israel war with Iran. Japan will begin releasing its share from 16 March with the G7 and IEA. Officials said talks continue on timing and allocation, and firms are seeking supplies from the US, Central Asia, and South America.

Key Drivers For Yen And Volatility

The Yen is shaped by Japan’s economy, BoJ policy, the US–Japan bond yield gap, and risk sentiment. The BoJ has intervened at times, and its ultra-loose policy in 2013–2024 weakened the Yen before a later unwind narrowed the yield gap. The USD/JPY is currently pushing towards 158.50, which brings back memories of the tensions in early 2025 when the pair was challenging the 160 level. While we haven’t seen official intervention this year, we remember that authorities stepped in around 160.15 in the second quarter of 2025, which makes selling yen calls above 159 a risky proposition. This history suggests that implied volatility on one-month options will likely rise as the pair approaches that critical zone. We are now in a different policy environment compared to early 2025, when the Federal Reserve held rates firm at 3.50%-3.75%. With the federal funds rate now at 2.75%-3.00% after several cuts, the interest rate differential that previously supported the dollar has narrowed significantly. However, since the latest US Core PCE data for January 2026 came in at a sticky 2.8%, traders are now less certain about the pace of future Fed cuts, giving the dollar some underlying support. Governor Ueda’s warnings about imported inflation last year were a clear signal, and the Bank of Japan followed through by ending its negative interest rate policy in late 2025. The policy rate now stands at 0.10%, but this historic shift has not provided the yen with lasting strength. This tells us that the market had already factored in this small hike and is now waiting to see if the BoJ signals a more aggressive hiking cycle. The acute supply shock from the Iran war has eased, but its impact lingers, with WTI crude oil now trading around $84 a barrel, well above the levels seen before the conflict began in 2025. Last year’s coordinated release of 80 million barrels from Japan’s strategic reserves provided temporary relief, but it highlighted Japan’s core vulnerability to energy prices. For traders, this means any renewed instability in the Strait of Hormuz could be a trigger to buy put options on the yen. We have observed that the yen’s role as a safe-haven asset has been less reliable over the past year. During recent market jitters, like the global manufacturing slowdown scare in the fourth quarter of 2025, investors favored the US Dollar more than the yen for safety. In the coming weeks, this suggests we should not automatically buy the yen on signs of global stress, but rather consider long volatility strategies through options like straddles on the USD/JPY pair. Create your live VT Markets account and start trading now.

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Key Points

• Gold futures fall 0.6% to $5,095.30 a troy ounce, pushing bullion toward a weekly loss.
• The U.S. dollar index rises 0.3% to 100.06, increasing pressure on dollar-denominated commodities.
• XAUUSD trades at 5075.35, down -4.43 (-0.09%), with MA5 5132.49, MA10 5147.24, MA20 5121.57, and MA30 5062.52.

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Stronger Dollar Pressures Bullion

Gold prices weakened as the U.S. dollar continued to strengthen, pushing bullion toward a weekly loss. Futures in New York slipped 0.6% to $5,095.30 a troy ounce, while spot gold hovered around 5075.35, down -4.43 (-0.09%).

Gold set for weekly drop as oil price surge weighs on rate-cut hopes https://t.co/247U7DN1Y1 https://t.co/247U7DN1Y1

— Reuters (@Reuters) March 13, 2026

A stronger dollar often creates headwinds for gold. When the U.S. dollar index rises to 100.06, up 0.3%, dollar-denominated commodities become more expensive for international buyers. This tends to reduce demand from outside the United States and can weigh on bullion prices.

Institutional investors are buying US dollars at the strongest level in nearly two years, as conflict in the Middle East drives demand for safe-haven assets, according to State Street. https://t.co/fwx104t4zq

— Bloomberg (@business) March 12, 2026

The dollar’s strength also reflects broader risk dynamics. Traders have moved into the currency as geopolitical tensions and volatile energy markets increase uncertainty.

If the dollar holds near 100.06 or continues climbing, gold may struggle to regain upward momentum in the near term.

Oil Prices Complicate The Inflation Picture

Rising oil prices have introduced another challenge for bullion. Higher energy costs can increase inflation expectations, which complicates the outlook for Federal Reserve policy.

Analysts at ANZ note that the dollar has strengthened partly because the United States is a net energy exporter, meaning rising oil prices can support the U.S. economy relative to energy-importing regions.

Gas shipment disruptions in Qatar are pushing global buyers toward US LNG to keep their power plants and factories running https://t.co/XD5vsCKyLT

— Bloomberg (@business) March 12, 2026

This dynamic shifts capital toward the dollar while creating pressure on gold. When energy prices rise, traders may anticipate higher interest rates or a delay in rate cuts as central banks try to contain inflation.

If oil prices remain elevated, markets may continue adjusting expectations for U.S. monetary policy, which could keep pressure on gold.

Fed Policy Uncertainty Weighs On Gold

Uncertainty surrounding Federal Reserve policy remains a central theme for bullion traders. Higher oil prices increase the possibility that inflation pressures return, which could complicate the timing of interest rate cuts.

Gold tends to perform best when interest rates fall or when traders expect easier monetary policy. When rate cuts appear less certain, yields can rise and reduce the appeal of non-yielding assets such as gold.

Markets are therefore balancing two competing forces: geopolitical risks that support safe-haven demand, and monetary policy uncertainty that limits upside momentum.

If incoming data suggests inflation remains sticky, expectations for rate cuts may fade further and gold could remain under pressure despite ongoing geopolitical tensions.

Technical Analysis

Gold (XAUUSD) is trading near 5,075, slightly lower on the session, as the metal continues to ease after the earlier rally that pushed prices to a peak around 5,598.60.

The recent price action suggests the market is undergoing a consolidation phase, with momentum cooling as traders digest the strong gains seen earlier in the year.

From a technical perspective, gold is currently hovering around its short-term moving averages. The 5-day moving average (5,132) and 10-day (5,147) sit just above the current price, indicating mild downward pressure in the near term. Meanwhile, the 20-day moving average (5,121) is close to the market and beginning to flatten, while the 30-day moving average (5,062) remains below current levels and continues trending upward, suggesting that the broader bullish structure is still intact.

Immediate support is located near 5,050–5,070, where the market is currently attempting to stabilise. A break below this zone could expose further downside toward 4,950–5,000, which represents a stronger structural support area.

On the upside, initial resistance appears near 5,130–5,150, followed by a more significant resistance zone around 5,250–5,300, where recent rallies have stalled.

Overall, gold appears to be consolidating within a broader uptrend, with the current pullback likely reflecting short-term profit-taking rather than a full reversal.

Holding above the 5,000 psychological level would keep the longer-term bullish outlook intact, while a sustained move back above 5,150 could signal renewed upward momentum.

What Traders Should Watch Next

• Movements in the U.S. dollar index, particularly if it remains above 100.06.
• Oil price trends and their impact on inflation expectations.
• Federal Reserve communication and incoming economic data that could influence rate-cut timing.
• Whether gold futures continue trading below $5,100 a troy ounce or stabilise near current levels.

Learn more about trading Precious Metals on VT Markets here.

FAQs

1. Why Are Gold Prices Falling This Week?
   Gold is under pressure from a stronger US dollar, rising oil prices, and uncertainty over Federal Reserve interest-rate policy. These factors have pushed New York gold futures down 0.6% to $5,095.30 a troy ounce, putting bullion on track for a weekly loss.
2. How Does a Stronger US Dollar Affect Gold Prices?
   Gold is priced in US dollars. When the US dollar index rises to 100.06, up 0.3%, gold becomes more expensive for overseas buyers. This can reduce global demand and weigh on bullion prices.
3. Why Are Rising Oil Prices Important for Gold?
   Higher oil prices increase inflation risks. If inflation rises again, the Federal Reserve may delay rate cuts or maintain a tighter policy. Higher interest rates tend to reduce the appeal of non-yielding assets such as gold.
4. Why Does the US Dollar Benefit From Higher Oil Prices?
   The United States is a net energy exporter, meaning higher oil prices can support the US economy relative to energy-importing regions. This dynamic strengthens the dollar and indirectly pressures gold.
5. Why is Federal Reserve Policy So Important for Gold?
   Gold performs best when interest rates fall or when markets expect easier monetary policy. If rate cuts become less likely, bond yields can rise and reduce the appeal of holding gold.

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The UK’s total trade balance moved from £-4.34 billion to £3.922 billion in January. This change shifted the balance from a deficit to a surplus. This unexpected swing to a £3.9 billion trade surplus in January is a significant positive for the UK economy. It suggests a much stronger export performance than anyone anticipated. We should therefore consider buying call options on the British Pound, particularly against the US Dollar (GBP/USD), to capitalize on a likely appreciation in the coming weeks.

Implications For Monetary Policy

This strong economic signal complicates the outlook for the Bank of England. Through much of 2025, we saw the market pricing in interest rate cuts, but this data reduces the pressure for such a move, especially with inflation having remained sticky just above 2.5% late last year. Consequently, we should adjust positions in short-term interest rate futures to reflect a lower probability of a rate cut in the second quarter. A stronger pound, however, creates a headwind for the UK’s largest companies. Given that over 75% of FTSE 100 revenues are generated overseas, a rising GBP exchange rate will negatively impact their earnings when converted back into sterling. It may be prudent to buy put options on the FTSE 100 index as a hedge against this currency effect on corporate profits. The sheer size of this data surprise will increase market uncertainty and price swings. Implied volatility in GBP options is likely to rise from the subdued levels we saw at the start of the year. This presents an opportunity to profit from the volatility itself, perhaps by purchasing straddles on GBP/EUR, which would benefit from a large price move in either direction.

Positioning And Risk Management

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The UK’s non-EU trade balance was £-3.46bn in January. This compares with £-10.994bn in the previous period. The data shows the UK’s non-EU trade gap narrowed in January. The figures relate to trade in goods and services with countries outside the EU.

Implications For Sterling Strength

Given the sharp narrowing of the UK’s non-EU trade deficit in January, we should anticipate renewed strength in the Pound Sterling. This improvement, from a nearly £11 billion deficit in December 2025 to under £3.5 billion, is a significant positive signal for the currency. In the coming weeks, this suggests a bullish outlook for GBP against major pairs like the Dollar and the Euro. We should therefore consider positioning through derivatives for a rise in Sterling’s value. Buying call options on GBP/USD with expiry dates in April or May 2026 would allow us to profit from an upward move while capping our potential losses. This strategy is supported by the fact that the pound has been sensitive to positive economic surprises over the last year. This trade data is especially important when we consider the current economic environment. With UK inflation data from February 2026 showing consumer prices are still stubbornly high at 3.4%, this strong trade figure gives the Bank of England more reason to delay interest rate cuts. A higher-for-longer rate environment is typically supportive of a currency. This may also be a good time to look at FTSE 100 index futures. Many of the index’s largest companies are multinational exporters, and a more favourable trade balance hints at stronger international earnings. We saw a similar pattern in the second half of 2025, where better-than-expected export data provided a temporary lift to UK equities.

Key Risk Drivers To Monitor

However, we must watch the upcoming retail sales figures for February to understand the full picture. If the trade deficit narrowed because of a collapse in imports, it could signal weak domestic consumer demand, which would undermine this positive view. But if it was driven by a surge in exports, our bullish stance on the pound and UK stocks will be confirmed. Create your live VT Markets account and start trading now.

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The UK goods trade balance was £-14.45bn in January. This was above the expected figure of £-22.2bn. The better-than-expected January trade balance figure of -£14.45 billion points to a more resilient UK economy than we initially priced in. This smaller deficit suggests exports are holding up or imports are moderating, both fundamentally positive for Sterling. We should therefore anticipate a firmer floor for the British Pound in the near term.

Trade Balance Implications For Sterling

This positive data point, when viewed alongside the recent February inflation report which showed core CPI remaining sticky at 2.4%, strengthens the case for the Bank of England to maintain its current hawkish stance. We should adjust interest rate derivative positions to reflect a lower probability of a rate cut before the third quarter. This is a marked change from the sentiment at the end of 2025 when the market was pricing in earlier cuts. For those trading foreign exchange derivatives, this suggests a more bullish outlook on the Pound against the Euro (GBP/EUR). Recent manufacturing PMI data from the Eurozone has been soft, with Germany’s February figure coming in at 42.5, indicating continued contraction. This divergence supports strategies like buying GBP/EUR call options or selling out-of-the-money puts to position for further Sterling strength. Looking at equity derivatives, the improved economic picture could benefit domestically-focused stocks. We may see increased demand for call options on the FTSE 250 index, which is a better barometer of the UK’s internal health than the more international FTSE 100. Back in 2024, we saw similar domestic resilience briefly boost the mid-cap index before global headwinds took over. However, we must remember this is January data, and the key will be whether this strength continued into February and March. Looking back at the volatility in shipping costs we saw in 2025, any renewed supply chain pressure could quickly reverse this positive trend. It is wise to use options spreads to define risk rather than taking on unlimited exposure.

Risk Management And Forward Signals

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UK manufacturing production rose by 0.1% month on month in January. This was below the 0.2% forecast. The release measures monthly changes in output from the UK manufacturing sector. The January figure follows the latest available reading from the prior month’s series.

January Data Signals Early Slowdown

That January manufacturing production miss, coming in at 0.1%, set a cautious tone for the first quarter of 2026. While it is older data, it was the first sign of a slowdown that subsequent figures have confirmed. More recent preliminary PMI data for February also dipped to 47.1, reinforcing this view of a struggling industrial sector. This sustained weakness puts pressure on the Bank of England to consider a more dovish stance in its upcoming meetings. We are now pricing in a higher probability of a rate cut by the third quarter, a shift from the ‘higher for longer’ narrative we saw at the end of 2025. This situation is reminiscent of the policy pivot we observed in late 2024 when growth concerns began to outweigh inflation fears. Consequently, we are looking at bearish strategies on the British pound, particularly against the US dollar. Implied volatility on GBP/USD options has ticked up as traders anticipate more downside potential. Recent data shows the pound has already weakened by 1.5% against the dollar since the start of February. For the FTSE 100, the outlook is mixed, creating opportunities for relative value trades. The weaker pound is a tailwind for the index’s large international earners, which account for over 75% of its total revenue. However, domestically focused companies in the FTSE 250 are likely to underperform due to the sluggish UK consumer demand.

FTSE Positioning And Relative Value

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USD/CAD held near 1.3640 in Asian trading on Friday, after rising by more than 0.25% in the prior session. The Canadian Dollar was steady as oil prices eased. WTI slipped slightly after jumping more than 9% in the previous session, trading near $95.00 a barrel. US crude prices are up more than 40% since the war began.

Strait Of Hormuz Risk Escalates

Oil prices may keep rising after the Strait of Hormuz was effectively closed during an escalating conflict involving the US, Israel and Iran. The International Energy Agency said the US-Israeli war on Iran is “creating the largest supply disruption in the history of the global oil market.” Iran’s new supreme leader, Mojtaba Khamenei, said the Strait of Hormuz closure should continue as a “tool to pressure the enemy.” He also warned that US military bases in the region should close immediately or face possible attacks. USD/CAD declines may be limited if the US Dollar stays supported by expectations the Federal Reserve will leave rates unchanged next week. The benchmark federal funds rate is currently 3.50%–3.75%. Markets are also awaiting January’s Personal Consumption Expenditures Price Index later on Friday. Attention is also on the first revision of fourth-quarter US GDP growth and March consumer confidence.

Usd Cad Tug Of War

The market is seeing a major tug-of-war on the USD/CAD pair around the 1.3640 level. We have West Texas Intermediate crude holding near $95 a barrel, which should be driving the Canadian dollar much stronger. However, the flight to safety amid the Mideast conflict is keeping the US dollar in high demand. The closure of the Strait of Hormuz is the dominant factor, choking off roughly a fifth of the world’s daily oil supply, a disruption unseen in decades. Historically, events like the 1973 oil crisis caused prices to quadruple, and Iran’s new leadership suggests this supply disruption is a long-term policy. This ongoing shock means we must prepare for oil prices to remain elevated or even climb higher. On the other side, the Federal Reserve’s firm stance on holding interest rates at 3.50-3.75% provides a strong floor for the greenback. The ongoing war is creating immense risk-off sentiment, pushing capital into US assets for safety. This counteracts the positive pressure on the loonie from oil prices. Given this uncertainty, we believe trading direction outright is extremely risky, and the focus must shift to volatility. Implied volatility on USD/CAD options has surged, with currency volatility indexes showing a more than 30% jump since the conflict escalated last month. Strategies that benefit from large price swings, such as long straddles, are becoming more attractive for hedging against sharp, unpredictable moves. We are witnessing a breakdown in the typical inverse correlation between oil prices and the USD/CAD pair. Looking back at data from 2025, that relationship was consistently strong, but the current safe-haven demand for the US dollar is overriding it. This means historical models based purely on oil prices are likely to be unreliable in the coming weeks. Create your live VT Markets account and start trading now.

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