US shares failed to hold Thursday’s late rebound and then fell ahead of the non-farm payrolls (NFP) release. The NFP, along with the unemployment rate and participation rate, came in weaker, with a nursing strike also affecting the data.
Rate cut expectations then helped shares recover, including financial stocks. Selling pressure in semiconductors eased, which helped the Nasdaq return to its pre-NFP level.
Market Breadth And Late Day Selling
The tech-to-S&P 500 ratio suggested a short-term counter-trend rise, but the last two hours brought steady selling as market breadth weakened. The US dollar did not need to rise for this move to occur.
Markets have largely priced Iran’s tensions as contained and short-lived. This is reflected in oil futures backwardation, with late summer contracts priced mildly while only front-month contracts rose.
Gold did not surge, even as rate cut expectations increased. The view in markets remains that the conflict will end soon, despite limited evidence, with attention also turning to midterms and upcoming inflation after earlier falls in oil and petrol prices.
Given the market’s failure to hold its rebound after the disappointing jobs report, volatility is the main takeaway. We see Friday’s report of only 95,000 jobs added as a clear sign of economic slowing, even if it fuels bets on rate cuts. This uncertainty suggests buying protective puts on the SPY for the coming weeks, as the late-day sell-off showed conviction is weak.
The split between tech and the broader market is a key area to trade. The Nasdaq 100 has outperformed the S&P 500 by over 3% since the start of March 2026, driven entirely by hopes for lower rates. This divergence allows for strategies like buying call options on the QQQ while hedging with puts on more economically sensitive sectors like financials (XLF).
Iran Risk And Oil Market Hedging
We believe the market is dangerously complacent about the conflict in Iran, treating it as a short-term issue. The deep backwardation in oil futures, with Brent’s front-month contract above $95 while December contracts lag near $82, shows this mispricing of risk. This makes long-dated call options on oil ETFs like USO a compelling hedge against a prolonged conflict.
Rising energy prices will directly challenge the very rate cuts the market is now banking on, creating a difficult environment for the Fed. We saw a similar situation in 2022, when persistent inflation forced policymakers to become more aggressive than initially expected. Puts on Treasury bond ETFs such as TLT could perform well if upcoming inflation data surprises to the upside.
The market appears to be waiting for a clear de-escalation signal, much like the 90-day tariff pause we experienced in late 2025. The CBOE Volatility Index (VIX) remains elevated above 20, showing that traders are still pricing in the potential for a sharp move. Until that catalyst arrives, using straddles on major indices could be an effective way to trade the building tension.
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Okta just delivered a Q4 earnings beat that has traders paying close attention.
With revenue surpassing analyst forecasts, a bold push into AI agent security, and a $1 billion share repurchase programme in motion, the identity management giant is sending a clear message: it isn’t slowing down.
Across the board, Okta’s fiscal fourth-quarter results came ahead of expectations with an average of 18% growth YOY, reflecting strong operational performance and better-than-expected results.
Much of that momentum is being driven by a growing portfolio of newer products that are resonating with enterprise customers, as Okta’s bold push into AI agent security.
Key Financial Highlights
Short-Term Focus (Q4 FY2026)
Revenue Growth: $761 million in Q4 revenue, up 11% YoY, driven by strong subscription performance.
Profitability:
GAAP Net Income: $63 million ($0.36 per share), up from $23 million in Q4 FY2025.
Non-GAAP EPS: $0.90, beating analyst consensus.
Cash Flow: Free Cash Flow at $252 million (33% of revenue), showing strong cash generation despite a slight decrease from the previous year.
Current RPO: $2.513 billion (+12% YoY), signalling ongoing demand for subscription services.
A standout feature of this year’s results is the significant improvement in profitability. GAAP net income surged to $235 million ($1.33 per share), a major jump from the previous year, indicating that the company is growing in terms of top-line revenue and becoming more efficient in converting that growth into actual profits.
Similarly, non-GAAP EPS climbed to $3.50, further demonstrating the company’s strong operational execution and healthy margins. The consistent growth in the backlog signals that the company is well-positioned to capitalise on long-term trends in its industry, particularly as demand for subscription-based services continues to rise.
Business Highlights
According to highlights from Okta’s Q4 earnings call, Okta released new capabilities focused on securing AI agents and other non-human identities. A group of newer products, including Okta Identity Governance, Okta Privileged Access, Identity Security Posture Management, Identity Threat Protection, Okta Device Access, Fine Grained Authorisation, and newly added AI-focused products Auth0 for AI Agents and Okta for AI Agents.
This is a meaningful product differentiation designed to give AI systems secure identities and authentication controls so they can interact safely with enterprise applications and data. As enterprise AI adoption accelerates, organisations are deploying autonomous agents that need secure, governed access to sensitive systems. Okta’s offerings are not just adopting AI, unlike Shopify, but function crucially in the sphere of security and privacy as an identity platform targeting AI agents.
Okta CEO Todd McKinnon cited the company’s internal “AI at Work” report, which found that 91% of the surveyed organisations are already using AI agents; however, only 10% have a governance strategy in place. That gap is Okta’s opportunity to build for tomorrow.
OKTA’s Opportunity in the AI Realm
The capability to ensure accessibility meets security when utilising AI agents for tools, workflows, and users’ data is a largely new frontier in the development of AI innovations.
In the interconnected system of components that contribute to the development, deployment, and scaling of AI technology, OKTA’s definitive product may be able to transition AI seamlessly into the application layer.
OKTA is advancing towards the final mile in the AI chain of developments. Their new products account for roughly 30% of Q4 bookings and drove an estimated 40% average contract uplift in partnership deals.
OKTA’s Products and Core Purpose
Okta is positioning itself as a core identity security fabric for the AI era, where AI agents and non‑human identities must be governed, authenticated, and monitored just like human users.
Product
What It Does
AI Relevance
Okta Identity Governance
The centralised management of access entitlements and permissions extends to AI agents in the early access stage. It ensures compliance and minimises access risks.
Governs AI agent access alongside human users, providing visibility and control.
Okta for AI Agents
Manages the full lifecycle of AI agent identities, from provisioning to auditing. The full release is scheduled for 2027. Currently in early access.
Treats AI agents as first-class identities with lifecycle management and auditability.
Okta Identity Security Posture Management (ISPM)
Continuously assesses and improves the organisation’s identity security posture.
Detects risky configurations related to AI agents and non-human identities.
Identity Threat Protection
Uses AI and machine learning to detect and respond to identity threats in real time as part of Okta’s broader identity security capabilities.
Protects critical accounts and elevated privileges, including those tied to AI workflows. AI-enhanced features were added post-Axiom Security acquisition.
Secures AI-driven workflows and automated access to sensitive systems.
Fine-Grained Authorization
Provides detailed access control policies for both human and AI agents.
Controls AI agents’ access to sensitive data and actions within the system.
Okta Device Access
Conditional access based on device health and compliance.
Ensures secure device access for AI workflows and agents in Zero Trust environments.
Auth0 for AI Agents
Identity management and secure access for AI agents and autonomous systems available to trial for developers.
Secures login, tokens, and permissions for AI agents in enterprise systems.
With a strategy that spans:
Discovery & governance (Identity Governance, Okta for AI Agents).
Privileged control and Zero Trust enforcement (Okta Privileged Access, Fine‑Grained Authorization).
Secure AI agent workflows (Auth0 for AI Agents).
Okta’s focus on security and compliance is resonating strongly across industries, with government and regulated industries being some of the fastest-growing verticals. By offering a platform that holds “a single source of truth” for identity management, Okta’s solutions provide structural advantages across industries like financial services, cybersecurity, and government procurement — sectors where security, compliance, and governance are paramount.
While government procurement tends to move slowly, Okta’s proven scalability and security infrastructure allow it to capitalise when large-scale adoption occurs, making it a reliable partner for both government entities and large regulated enterprises.
Headwinds to Watch
No bull case is complete without accounting for the risks. OKTA stock trades at a premium, and the identity security market is drawing more players.
Microsoft — via Microsoft Entra ID (formerly Azure Active Directory) — holds the largest overall IAM installed base globally and applies bundle pricing pressure that compresses margins for standalone vendors like Okta, making it a persistent competitive threat for enterprise accounts
CrowdStrike, Ping Identity, and newer entrants are all competing in adjacent identity and access segments. Okta’s ability to establish Auth0 for AI Agents as an enterprise standard before rivals respond will be critical.
Anthropic, the AI safety company, launched Claude Code Security in February 2026 — a tool that scans codebases for vulnerabilities and suggests targeted patches, reasoning through code the way a human security researcher would. It has already identified over 500 high-severity vulnerabilities in open-source projects. The move signals that AI labs are building security tooling of their own, potentially encroaching on territory Okta wants to own
The shift of professional services revenue to partners, while strategically sound, will create near-term revenue headwinds through FY2027. With AI-agent pricing models still being refined, near-term revenue contribution from these products remains modest.
How Traders Might Approach OKTA Stock
Okta is a stock that straddles two narratives: a maturing enterprise software company generating real cash flow, and a potential AI security infrastructure play with a long runway if its agent identity products gain traction.
In the long term, two key indicators will need to be monitored: whether AI-agent product revenue begins to appear meaningfully in the current RPO by mid-FY2027, and whether Okta successfully wins federal vertical contracts at scale. If both materialise, the current valuation may look conservative in retrospect.
For those watching the chart, the $2.5 billion cash position and $1 billion buyback programme provide meaningful downside support. Okta repurchased and retired over 875,000 shares in January alone for a total outlay of $79 million, demonstrating conviction from management about the stock’s relative value.
Okta isn’t a company chasing the AI hype cycle; it’s a company building the security rails that the AI economy will run on. Trade happens when the thesis gets priced in.
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China’s foreign exchange reserves rose to $3.428 trillion in January, up from $3.358 trillion.
That is an increase of $70 billion month on month.
Implications For Yuan Stability
The stronger-than-expected rise in China’s reserves for January gives us confidence in the yuan’s stability. It suggests the People’s Bank of China has ample resources to manage the currency, reducing the chance of sharp moves. This makes strategies like selling options on the USD/CNY pair, which profit from low volatility, look more attractive in the coming weeks.
This underlying economic strength points to solid demand for industrial commodities. We’ve already seen copper prices climb over 8% since the start of this year, hitting levels not seen since late 2024. Derivative traders should look at buying call options on base metals or oil to capitalize on this expected demand.
This stability is a welcome change from the capital outflow concerns we navigated throughout much of 2025. A steady currency reduces risk for foreign investors, and we are seeing renewed interest in Chinese equities, with the Hang Seng Index up 4% in February. We see this as a signal to consider long positions through call options on China-focused ETFs.
Implications For Rates Volatility
A robust Chinese economy also means they will likely continue to hold and potentially buy U.S. Treasury bonds, which helps keep a lid on yields. This contrasts with worries last year in 2025 that China might sell its holdings, which would have pushed U.S. borrowing costs higher. This environment suggests less volatility in the U.S. rates market, favoring strategies that bet on a stable range for Treasury futures.
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Colombia’s consumer price index (CPI) rose 5.29% year on year in February.
The result was below the forecast of 5.49%.
With February’s inflation coming in below expectations at 5.29%, the door is now wide open for the Banco de la República to accelerate its interest rate cuts. We are now pricing in a higher probability of a 50-basis-point cut at the next meeting, instead of the previously anticipated 25 points. This shift in monetary policy expectations is the primary driver for our strategy in the coming weeks.
This outlook will likely put significant pressure on the Colombian Peso. Consequently, we should consider establishing positions that benefit from a weakening currency, such as buying call options on the USD/COP pair. Looking back at the easing cycle that began in late 2024, we saw the peso depreciate by over 7% in the following quarter, a pattern that could repeat.
For interest rate derivatives, the path is now clearer for lower rates ahead. We see an opportunity in receiving fixed rates on short-term interest rate swaps, betting that the central bank will follow through on this disinflationary signal. This is a direct play on the market repricing a more aggressive easing cycle from the central bank.
On the equity side, a faster pace of rate cuts should provide a tailwind for the local stock market. We believe bullish positions on the COLCAP index, potentially through call options on Colombian ETFs, are warranted. This view is bolstered by the weak 0.8% GDP growth figure we saw in the final quarter of 2025, which shows the economy needs stimulus.
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Colombia’s consumer price index rose 1.08% month on month in February. This was below the forecast of 1.27%.
The outturn was 0.19 percentage points lower than expected. The data compares the change in consumer prices in February with the previous month.
Implications For Monetary Policy
The lower-than-expected inflation figure for February strengthens our view that the central bank will move to cut its benchmark interest rate at its next meeting. This marks the fifth consecutive month that inflation has surprised to the downside, a clear trend that policy makers can no longer ignore. The market was pricing in a 25 basis point cut, but this data now brings a 50 basis point reduction into play.
For interest rate traders, we see value in receiving fixed on IBR swaps, particularly in the 1-year to 2-year part of the curve. Following the data release, the 2-year swap rate has already fallen 18 basis points to 8.32%, and we expect it to trend lower towards the 8.00% level seen in late 2025. This move anticipates the central bank easing policy more aggressively than previously thought.
On the currency front, this development is bearish for the Colombian Peso. Lower domestic interest rates reduce the appeal of holding the currency, suggesting a move higher for the USD/COP pair. We should consider buying USD/COP call options with a 4,100 strike price, as the pair looks set to break out of the tight range it has held since January 2026.
This environment is supportive for Colombian equities, as lower borrowing costs will help corporate earnings.
Equities Outlook And Positioning
We anticipate the MSCI Colcap index, which has been stagnant around 1,275 points, will find upward momentum from this news. Call options on the index or futures contracts are viable ways to position for a retest of the 1,350 highs from the fourth quarter of 2025.
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China is due to publish February CPI inflation data next Monday. February CPI is forecast at 1.0% year-on-year, linked to Lunar New Year effects.
Higher oil prices linked to conflict in the Middle East are expected to show up later. The effect is anticipated in March data rather than February.
February Inflation And Lunar New Year Effects
Trade figures for the first two months of the year are scheduled for release on Tuesday. Exports are projected to rise 9.3% year-on-year and imports 8.5% year-on-year over January and February.
These readings would leave China with a trade surplus of $188.1bn. The article notes it was produced using an AI tool and reviewed by an editor.
Looking back at early 2025, we recall the modest recovery signs in China’s economy. Analysts at the time anticipated February 2025 CPI inflation to hit 1.0% due to the Lunar New Year, with strong export growth of 9.3% also expected. This set a baseline of cautious optimism for the year ahead.
The situation now in early March 2026 appears more subdued, demanding a different approach. China’s National Bureau of Statistics just reported February CPI inflation at only 0.7% year-on-year, missing expectations and pointing to weaker domestic demand than we saw this time last year. This softness suggests considering put options on domestic consumer-focused ETFs like the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) to hedge against further downside.
Furthermore, trade data for the first two months of 2026 shows a significant shift from the resilience of early 2025. Exports grew by a more moderate 4.8%, reflecting a tougher global environment, while import growth was stronger than expected at 6.5%, narrowing the trade surplus. This shrinking surplus could introduce volatility to the yuan, making derivatives on the USD/CNH currency pair an interesting play on potential currency fluctuations.
Trade And Currency Implications
The latest official manufacturing PMI reading for February 2026 was 50.1, barely in expansion territory and down from the 50.9 seen a year prior in February 2025. This indicates that any recovery is fragile and suggests implied volatility may be underpriced. We see an opportunity in buying straddles on the iShares China Large-Cap ETF (FXI) to profit from a significant price move in either direction as the market digests these mixed signals.
Oil prices, which were a delayed factor in 2025, are now a present concern with Brent crude holding steady above $80 per barrel. This is a direct input cost for many Chinese industries, creating a headwind that was not as pronounced twelve months ago. Traders should monitor futures on industrial metals like copper, as Chinese import strength could be linked to state-led infrastructure spending, which may not be sustainable if margins are squeezed by energy costs.
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USD/CNH traded higher as Iran-related tensions supported the US Dollar. Beijing set a stronger CNY fixing rate, which helped steady the renminbi and partly offset wider weakness in Asian currencies.
The 30-day rolling average change in the USD/CNY fix rose to -33 pips, compared with -27 pips a month earlier. A continued stronger fix may support stability if the gap between the expected fix and the actual fix does not widen.
Near Term Outlook
If USD strength continues and risk sentiment worsens, a stronger CNY fix may be needed to counter near-term depreciation pressure. USD/CNH was last at 6.9260, with bullish daily momentum and a rising RSI, leaving risks tilted to the upside.
Resistance levels were listed at 6.9370 (50-day moving average), 6.9520, and 6.9780 (38.2% Fibonacci retracement from the August high to the February low). Support levels were noted at 6.8970 (21-day moving average) and 6.88.
The article said it was produced using an AI tool and reviewed by an editor.
Looking back at the patterns of 2025, we recall how geopolitical tensions supported the US dollar, forcing Beijing to manage its currency with stronger daily fixes. We are seeing a similar dynamic now in early 2026, as ongoing global uncertainty continues to fuel a flight to safety in the dollar. This historical parallel suggests that the yuan will face continued depreciation pressure.
Option Strategy Considerations
Recent data reinforces this view, as US inflation in February 2026 came in slightly above expectations at 3.1%, prompting hawkish signals from the Federal Reserve. This fundamental support for the dollar is a key factor pushing the USD/CNH pair higher. As of this week, the pair is testing the 7.15 level, a significant move up from the levels we saw this time last year.
Meanwhile, China’s latest trade data showed a slight dip in exports for February, and the manufacturing PMI registered a contractionary 49.8, indicating economic headwinds. This makes an overly strong yuan undesirable for policymakers, though they will continue to use the daily fix to prevent disorderly declines. The gap between the market’s expectation for the fix and the actual setting will be a crucial indicator of their intentions.
Given the upward momentum and fundamental drivers, traders should consider buying USD/CNH call options. This allows for participation in potential upside while capping the maximum loss to the premium paid. Options with strike prices around 7.20 and 7.25 for expiry in the next four to six weeks look attractive.
For a more cost-effective strategy, a bull call spread could be implemented. This involves buying a call option at a lower strike price, like 7.18, and simultaneously selling a call at a higher strike, such as 7.25. This approach reduces the initial cash outlay but also caps the potential profit.
The primary risk to this bullish stance remains a surprisingly aggressive intervention from the People’s Bank of China. If their daily fixing is set consistently and significantly stronger than anticipated, it could temporarily halt or reverse the uptrend. Therefore, monitoring the daily USD/CNY fix is essential for managing any long dollar positions against the yuan.
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UK CFTC GBP non-commercial net positions fell to -£72.7K from -£57.1K in the previous period.
The change indicates a larger net short position in sterling among non-commercial traders.
Speculative Positioning Turns More Bearish
We’re seeing large speculators significantly increase their bets against the British Pound. The net short position has deepened by over 27%, showing a strong conviction that its value will fall in the near term. This is one of the most bearish readings we have seen in over a year.
This negative sentiment aligns with recent economic data, which showed UK GDP growth was a mere 0.1% in the final quarter of 2025. With inflation remaining sticky at 3.5%, the Bank of England has little room to stimulate the economy, creating a poor outlook for the currency. This contrasts with the European Central Bank, which has signaled a more aggressive stance on taming inflation.
For us, this makes buying put options on GBP/USD an attractive strategy over the coming weeks. It offers a direct way to profit from a potential decline in the Pound against a strengthening dollar. Volatility is relatively low, making the entry price for these options reasonable.
Looking back, this build-up in short positions is reminiscent of the market sentiment during the 2022 UK budget crisis. That period saw a rapid and severe depreciation of the Pound once the negative momentum took hold. History suggests that when sentiment gets this stretched, a catalyst can trigger a very sharp move.
However, we must also be aware that such crowded trades are vulnerable to a short squeeze. Any unexpected positive news, like a surprise uptick in manufacturing PMI or hawkish comments from a Bank of England official, could force a rapid unwinding of these short positions. Therefore, managing our risk on any bearish position is critical.
Risk Controlled Implementation Approach
A more defined strategy would be to implement bear put spreads on GBP futures. This approach allows us to capitalize on a downward move while clearly defining our maximum potential loss from the outset. It is a prudent way to express this bearish view without taking on unlimited risk.
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US CFTC data shows S&P 500 net positions are at -168.2K. The previous reading was -193.5K.
This is a change of +25.3K versus the prior figure. Net positions remain below zero
Speculative Positioning Shifts
The reduction in net short positions on the S&P 500 shows large speculators are easing their bearish bets. This is a significant shift, suggesting their conviction that the market will fall is weakening. We are seeing major players either closing out their shorts or initiating new long positions.
This change in sentiment follows the recent February 2026 inflation report, which showed core CPI at 2.8%, below the 3.0% that was expected. This has cooled expectations for further rate hikes from the Federal Reserve. As a result, the market is now pricing in a lower probability of a hike at the next meeting.
We should anticipate a potential increase in short-term volatility as these short positions are covered, which can fuel upward price movements. The VIX has already dropped from 22 to below 18 in the last week, making options cheaper. This reflects a decrease in the market’s fear level.
From our perspective in 2025, we saw a similar rush to cover shorts in the fourth quarter of 2023 when inflation fears first began to subside. That period was followed by a strong multi-week rally as the bearish sentiment unwound. History suggests that such a large shift in positioning can mark a near-term bottom.
For derivative traders, this may be a signal to reduce exposure to outright long puts that were purchased for downside protection. The falling volatility makes strategies like selling cash-secured puts or implementing bull call spreads more attractive. The cost of hedging against a downturn is becoming cheaper, reflecting the renewed confidence.
Key Upcoming Catalyst
The next major test for this evolving sentiment will be the upcoming March Non-Farm Payrolls report. A number that shows a stable but not overheating labor market could encourage even more shorts to be covered. We will be watching to see if this trend in positioning continues.
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UOB Global Economics & Markets Research said Singapore’s GDP exposure to the Middle East conflict is modest if the shock is short-lived. It assumed the conflict remains heightened for within four weeks and that oil stays below US$100 per barrel, then normalises gradually.
Exports to key Middle East economies are about 2% of Singapore’s total exports. UOB kept its 2026 GDP growth forecast at 3.6%, while noting possible knock-on effects through weaker global consumption and investment.
External Demand And Supply Chain Risks
It said external demand could weaken due to lower sentiment and supply-chain disruption, reducing exports. It added that Singapore’s high openness means a large share of domestic value-added is supported by foreign demand.
UOB said higher utility, transport and input costs could lift inflation in goods and services. Using 2005–2025 data, it estimated that a US$10 per barrel rise in Brent could raise core inflation by about 30–40 basis points.
It said this increases the likelihood MAS tightens policy at the April 2026 MPS. Its base case is a 50bps rise in the S$NEER band slope to 1.0% per annum, with a chance of delay to the July 2026 MPS.
UOB said the near-term macro impact is more on inflation than on growth. The article noted it was produced using an AI tool and reviewed by an editor.
Market Strategy And Policy Expectations
We see the current Middle East conflict’s main impact on inflation rather than on economic growth for now. The direct hit to Singapore’s economy seems limited, but the risk comes from secondary effects like weaker global demand. Therefore, our focus should be on how rising costs will affect monetary policy in the immediate future.
The key channel for this is the oil price. With Brent crude futures now trading near US$95/bbl, up over 15% in the last month, we are approaching the critical US$100/bbl mark. Based on our models using data from 2005 to 2025, such a sustained increase from the year’s baseline could push Singapore’s core inflation significantly higher.
This puts immense pressure on the Monetary Authority of Singapore (MAS) to act in its upcoming April 2026 meeting. Interest rate markets are now pricing in a greater than 75% chance that the MAS will tighten policy by steepening the slope of the S$NEER policy band. This is a sharp reversal from February 2026, when expectations were for policy to remain on hold.
For traders, this points towards positioning for a stronger Singapore Dollar. Options strategies that benefit from a rise in the SGD against its trading partners, particularly currencies with more dovish central banks, appear attractive. We should also consider forwards that lock in a more favorable exchange rate in anticipation of the MAS decision.
Higher inflation and tighter policy create headwinds for equities, which could dampen sentiment on the Straits Times Index (STI). We should consider buying put options on the STI to hedge against a potential market dip caused by cost pressures and concerns over global growth. Volatility is likely to increase, making options pricing more attractive.
Looking back, we saw a similar situation unfold in 2022 when the conflict in Ukraine caused an energy price shock. The MAS responded decisively then with off-cycle policy tightening moves to anchor inflation expectations. This historical precedent supports our view that the central bank will prioritize fighting inflation again, even if it creates some drag on growth.
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