Australia’s seasonally adjusted unemployment rate fell to 4.1% in January, beating forecasts of 4.2%
Australia’s seasonally adjusted unemployment rate was 4.1% in January. This was lower than the expected 4.2%.
This means the actual figure was 0.1 percentage points below the forecast. The data is for January and is seasonally adjusted.
EUR/USD slips to around 1.1785 as hawkish Fed minutes lift the dollar and boost rate-hike expectations
EUR/USD slipped below 1.1800 to around 1.1785 in early Asian trade on Thursday. The move came after the US Dollar strengthened following hawkish Federal Reserve meeting minutes.
The January FOMC minutes showed that almost all members supported keeping rates unchanged, while a couple favored a cut. Officials said cuts are still possible if inflation falls as expected. However, several warned that rate hikes may be needed if price pressures continue.
Lagarde Exit Speculation
The Financial Times reported that ECB President Christine Lagarde may step down before her term ends in October 2027. The report said she wants to give French President Emmanuel Macron and German Chancellor Friedrich Merz a chance to choose her successor. No timeline was provided. Markets will watch preliminary PMI data from Germany and the Eurozone on Friday. Stronger readings could help limit near-term losses in the Euro. The Euro is used by 20 EU countries in the Eurozone. It accounted for 31% of global FX turnover in 2022, with average daily turnover above $2.2 trillion. EUR/USD is estimated to make up 30% of all FX transactions, followed by EUR/JPY at 4%, EUR/GBP at 3%, and EUR/AUD at 2%. The ECB, based in Frankfurt, sets policy to keep inflation near its 2% target and meets eight times a year. The four largest euro-area economies produce about 75% of total Eurozone output.Policy Divergence Focus
At this point in 2025, markets were reacting to hawkish Fed minutes that hinted at further rate hikes. That helped push EUR/USD below 1.1800, while investors also faced uncertainty about ECB leadership. Today, the story has changed. Markets are now focused on policy divergence, not a shared tightening cycle. The Fed’s tone has softened a lot since early 2025. With the latest US CPI for January 2026 at 2.8%, the Fed is signaling a long pause. Compared with last year, this suggests the US dollar has less upside from surprise rate moves. In Europe, the ECB faces a different setup. Eurozone HICP inflation is still high at 3.1% as of January 2026. At the same time, the Eurozone Composite PMI has moved back into expansion at 50.5. Together, these factors may keep pressure on the ECB to stay relatively hawkish. Talk about leadership succession has faded, but it remains a background risk that could return. With this policy gap developing, traders may look at strategies that could benefit if the Euro rises gradually against the US dollar. One approach is selling out-of-the-money EUR/USD puts to collect premium, assuming the pair finds support from a patient Fed. Traders may also look for chances to buy call spreads to target a steady move higher, while limiting risk if ECB leadership concerns return. Create your live VT Markets account and start trading now.Foreign investors bought ¥1B of Japanese shares, down sharply from ¥543.2B previously
Japan recorded ¥1 billion of foreign investment in Japanese stocks on 13 February.
This compares with ¥543.2 billion in the previous period.
Foreign Sentiment Shifts Sharply
Foreign investment in Japanese stocks fell sharply to just ¥1 billion. That is a steep drop from the ¥543.2 billion inflow seen the week before. A move this fast can signal that overseas funds are taking profits and stepping back after a strong run. The reversal follows the Nikkei 225 moving above 41,000 in January, ending a powerful rally we tracked through 2025. Recent Bank of Japan comments about moving toward more normal policy may have unsettled investors. Markets are now placing higher odds on an interest rate hike happening sooner than expected. Inflation is also staying high. The latest core CPI is 2.8%, which is above the central bank’s target. At the same time, the yen has strengthened, with USD/JPY dropping into the low 140s. A stronger yen can reduce earnings for major Japanese exporters. Together, these factors can make it harder for the stock market to keep rising. For derivatives traders, this may be a period to look at defensive or bearish positions in the weeks ahead. Buying Nikkei 225 put options is one direct way to prepare for a potential decline. The sudden change in capital flows can also lift implied volatility, which may make strategies like long straddles more appealing. It is also worth recalling a similar, but smaller, increase in foreign outflows in late 2024. That was followed by a market pullback of nearly 10% over the next couple of months. History does not repeat exactly, but it can help frame the downside risks now.Key Risk Scenarios Ahead
Create your live VT Markets account and start trading now.Japan’s machinery orders jumped 19.1% month on month in December, far exceeding the 4.5% forecast
Japan’s machinery orders rose 19.1% month on month in December, well above the expected 4.5% increase.
This suggests order volumes were stronger than forecast for the month. The figures are reported on a month-on-month basis.
December Machinery Orders Signal Strong Capex
December 2025 machinery orders sent a very strong signal. The 19.1% month-over-month jump, far above the 4.5% forecast, points to faster corporate spending on equipment. In simple terms, companies appear more confident about demand and may be investing more for 2026. This supports a positive near-term view on Japanese equities. We may want to increase long exposure to Nikkei 225 futures or consider out-of-the-money call options to target further upside. The index is already up more than 6% year to date, and this report adds fundamental support for the move. The Japanese yen is also important to watch. Stronger data like this could push the Bank of Japan to adjust policy sooner than expected. It raises the chance of an interest rate hike in the first half of the year. One way to position for a stronger yen is through JPY call options or USD/JPY put options. Options-market volatility may rise after such a large surprise. When results deviate this much from consensus, markets may reprice expectations for the central bank’s next steps. A potential way to trade this is with long exposure to the Nikkei Volatility Index. It is near 18.5, which is still a moderate level given the new information.Historical Context And Key Watch Items
A monthly rise this large has not been seen since the post-pandemic rebound in 2022, which was followed by strong economic performance. That comparison suggests December may be the start of a new investment cycle, not just a one-off spike. Next, we should watch the Tankan survey and preliminary Q1 GDP closely for confirmation. Create your live VT Markets account and start trading now.In December, Japan’s machinery orders rose 16.8% year-on-year, beating the 3.9% forecast
Japan’s machinery orders rose 16.8% year on year in December, well above the expected 3.9%.
That is 12.9 percentage points higher than the forecast. The data compares December with the same month a year earlier.
Implications For Growth And Investment
The December 2025 machinery orders report is a strong positive signal for Japan’s economy. Beating expectations by such a wide margin suggests companies ended last year with very solid investment plans. This upbeat outlook could support corporate earnings and broader economic activity in the first half of 2026. This result also strengthens the case for staying long Japanese equities in the weeks ahead. The Nikkei 225 is already up nearly 8% year-to-date and has moved above 43,000 for the first time. Given the added support from planned capital spending, buying call options on the index may be worth considering. The strength of this indicator may also increase speculation that the Bank of Japan will tighten monetary policy. January core inflation came in at 2.3%, still above the bank’s target, which adds to that pressure. This may support positioning for a stronger yen, such as buying JPY call options or shorting USD/JPY futures.Rates Bonds And Policy Outlook
In 2025, growth signals were often mixed, which helped keep the central bank on hold. This much stronger data point challenges that cautious view and argues for a firmer recovery. As a result, Japanese government bonds could come under pressure. Put options on JGB futures may be a sensible way to hedge against a possible rise in yields. Create your live VT Markets account and start trading now.Gold holds near $4,985 in early Asian trade as rising US–Iran tensions boost safe-haven demand
Gold traded near $4,985 in early Asian trade on Thursday. It stayed in positive territory as investors returned to safe-haven assets. Markets are now focused on US Initial Jobless Claims, Pending Home Sales, and comments from Federal Reserve officials later today.
US Vice President JD Vance said Iran has not accepted key US demands in talks. CNBC reported that Washington agreed to give Tehran two weeks to close the gaps. US President Donald Trump said force is still an option if diplomacy fails to stop Iran’s nuclear program.
Holiday Liquidity And Gold Trading
Liquidity was thin due to holidays in major regions. BMO Capital Markets said gold often softens during holiday periods, which can create chances for bargain buying. A stronger US Dollar could limit gains in dollar-priced gold. Minutes from the Fed’s January meeting showed several policymakers said rates may need to rise if inflation stays high. That pushed traders to scale back expectations for a rate cut this year, though futures still price in a possible cut by June. Central banks added 1,136 tonnes of gold, worth about $70 billion, to reserves in 2022. That was the largest annual purchase on record, according to the World Gold Council. Gold often moves in the opposite direction of the US Dollar and US Treasury yields, and it tends to perform better when interest rates fall. Gold is holding near the $5,000 level, mainly because tensions with Iran are rising. Safe-haven demand is the key driver right now and is helping to support prices. Any escalation from the White House over the next two weeks could push gold higher.Key Forces Driving The Next Move
This strength did not appear overnight. It rests on years of central bank buying, which accelerated in 2022 and 2023. From what we can see in 2026, official data later confirmed that emerging-market buying stayed at record levels through 2024 and 2025. That steady demand is a major reason gold has more than doubled since those years. Still, the US Dollar and the Federal Reserve remain critical. The January FOMC minutes leaned hawkish. Several members were open to raising rates again if the inflation seen through 2025 proves persistent. If the Fed keeps rates high for longer—or hikes again—it would likely limit further gains in gold. Right now, the market is split. Fed funds futures still point to a possible cut by June, while the Fed’s messaging remains tough. This gap between market pricing and Fed signals raises the risk of volatility. Traders will watch jobless claims and housing data closely for clues that could shift expectations. This setup can suit options strategies that limit risk. With gold at a high level, outright long positions are expensive and vulnerable to a quick reversal if geopolitical tension eases. It may be better to use strategies that can benefit from a sharp move in either direction. If you expect tensions to lift gold, bull call spreads offer defined-risk exposure to further upside. If you think the Fed’s hawkish stance will win out and support the dollar, put spreads can be a cheaper hedge. The goal is to be positioned for a clear break from the current stalemate. Create your live VT Markets account and start trading now.After UK employment data showed the labour market weakening faster, sterling fell further and expectations of a BoE cut rose
GBP/USD fell again after UK jobs data showed the labour market is weakening faster. UK unemployment rose to 5.2% in Q4, average earnings eased to 4.2%, and the claimant count increased by 28.6K in January.
Regular private-sector wage growth, a key Bank of England measure, fell to 3.4%, the lowest level in five years. Markets now price in a 25-basis-point BoE cut by April, with a 76% chance of a move in March. Meanwhile, UK CPI, PPI inflation, and Retail Price Index data all came in below forecasts.
Technical Levels And Near Term Direction
On Wednesday, the pair fell 0.5%, extending its drop from January’s four-year highs. Price dipped below the 50-day EMA, while the 200-day EMA sits near 1.3435. A break below 1.3490 opens the way to 1.3400. A move back above the 50-day EMA at 1.3529 would ease downside pressure. US Initial Jobless Claims and the Philadelphia Fed Manufacturing Survey are due on Thursday, along with several Federal Reserve speakers. UK Retail Sales and PMI data follow on Friday. The pound dates back to 886 AD and is the UK’s currency. In 2022, it made up 12% of FX trades, averaging $630 billion a day. GBP/USD accounts for 11% of that activity, GBP/JPY 3%, and EUR/GBP 2%. BoE policy is guided by an inflation target of around 2%. In early 2025, UK labour market weakness signaled the start of the Bank of England’s easing cycle. As unemployment rose to 5.2% and wage growth slowed, markets fully priced in rate cuts that began that spring. At the time, this supported a bearish outlook for Sterling.How The Macro Backdrop Has Changed
The picture has changed a lot by February 2026. Recent data shows UK unemployment has improved to 4.8%, and January wage growth was stronger than expected at 4.9%. With inflation still high at 2.8%, well above the BoE’s target, the case for larger or faster rate cuts is weakening. In the US, the economy is holding up well. Initial jobless claims remain near 205,000, and last month’s retail sales beat expectations. This strength suggests the Federal Reserve may keep rates higher for longer than the Bank of England. That gap in policy could limit any major GBP rallies. For derivative traders, this setup points to strategies that work if GBP stays range-bound or drifts lower. One approach is to buy GBP/USD puts with expirations one to two months out, to benefit if UK data disappoints. Another option is a bearish put spread, which reduces upfront cost while targeting a defined downside move. Although the pair broke below key moving averages, including the 200-day EMA, back in 2025, it has since rebounded. For now, 1.3600 is initial support, with the stronger psychological level at 1.3500 below it. Any rallies may face resistance near the recent highs around 1.3780. Create your live VT Markets account and start trading now.USD/JPY rebounds as weak Japan GDP limits yen gains amid persistent BoJ rate-hike expectations
USD/JPY rose on Wednesday as the recent Yen rally lost pace. Even so, the Yen is on track for its best weekly performance since November 2024. Expectations for a Bank of Japan rate hike remain, even after weaker GDP data. Recent comments also hinted at an April move, and the IMF again backed Japan’s return to more normal policy settings.
Japan’s National CPI data due on Thursday could drive the next move. A strong core reading would likely boost rate-hike bets and support the Yen. A softer reading could allow USD/JPY to extend Wednesday’s rebound.
Usd Jpy Technical Picture
USD/JPY began Wednesday near 153.00 and rose about 1%. The move formed a bullish daily candle, but the pair stalled below the 50-day EMA at 155.30. The 200-day EMA sits near 152.60. That leaves price stuck between the two averages after the drop from the January high near 159.45. The Stochastic Oscillator is rising from oversold levels, which suggests downside momentum is fading. A break above 155.30 could open a move to 156.00 and back into the mid-January range. If the pair fails to clear 155.30, 153.00 may come back into view, along with the year-to-date low at 152.10. The Yen is one of the most traded currencies. It is influenced by Japan’s economy, BoJ policy, the yield gap versus US bonds, and overall risk sentiment. BoJ policy from 2013 to 2024 helped weaken the Yen, but policy changes in 2024 and rate cuts elsewhere have narrowed the 10-year US–Japan yield gap.Key Drivers And Trade Levels
With USD/JPY stalling below the 50-day moving average at 155.30, this level looks like a key decision point. The recent bounce from 153.00 is starting to fade, which suggests the Yen’s underlying strength still matters. The market also appears to be in a transition period after the sharp fall from the January highs near 159.45. Japan’s National Core CPI, released today, rose 2.2% year over year in January, slightly above expectations. This supports the view that the Bank of Japan is still on track to hike rates. Many traders are now more confident about a move in April, which strengthens the case for a firmer Yen in the weeks ahead. With inflation holding up, the 155.30 resistance level is the main level to watch. If USD/JPY cannot break above it, that would support the idea of buying JPY calls or USD/JPY puts, aiming for a retest of 153.00 support. This also fits with the narrowing rate gap, especially as US jobless claims have edged higher, pointing to a cooling US economy. The policy shift that began when the BoJ started stepping away from ultra-loose policy in 2024 remains the main theme. The multi-year trend of a widening US–Japan yield gap is now reversing, which gives the Yen fundamental support. In this setup, USD/JPY rallies may continue to attract selling. Still, a short-term relief rally is possible, as some technical signals suggest. A clear break and hold above 155.30 could open the way to 156.00. In that case, short-dated USD/JPY call options could be used to benefit from a squeeze higher, though this looks like the lower-probability scenario. Create your live VT Markets account and start trading now.AUD/NZD climbed to new peaks as a dovish RBNZ pause hit the NZD, while RBA hawkishness boosted the AUD
AUD/NZD rose on Wednesday after the RBNZ kept policy unchanged but struck a dovish tone. That triggered NZD selling. The RBA is still more hawkish, with its cash rate at 3.85% versus 2.25% in New Zealand. The RBNZ has also signalled that any further tightening is unlikely before late 2026.
Australia’s Q4 Wage Price Index increased 0.8% month on month, keeping inflation in focus. Next on the calendar are Australia’s jobs data on Thursday and a speech by Governor Breman.
Policy Divergence And Market Reaction
AUD/NZD jumped 0.8% to 1.1807, its highest level in 12.5 years. The move extended the rally from around 1.1550 and kept the pair well above the 200-day EMA near 1.1340. The Stochastic Oscillator is in overbought territory, which often signals a potential pause. Key support sits near 1.1710 and at the 50-day EMA (1.1607). If the pair holds above 1.1800, the 1.1900 level stays in view. Key NZD drivers include RBNZ policy (targeting 1% to 3% inflation, centred around 2%), China-linked demand, and dairy export prices. Broader risk sentiment can also move the NZD, and rate differentials can influence NZD/USD. The large policy gap between the Reserve Bank of Australia and the Reserve Bank of New Zealand is the main driver right now. The RBNZ’s dovish hold widened that gap, making the Australian dollar more attractive than the New Zealand dollar on fundamentals. This divergence is likely to remain the key force behind AUD/NZD for the foreseeable future.Australia Jobs Data And Forward View
We have now seen Australia’s latest jobs report, and it supports this view. The unemployment rate unexpectedly fell to 3.8%, and the economy added more than 40,000 jobs. A strong labour market like this can keep pressure on the RBA to stay hawkish in its fight against inflation. That contrasts with New Zealand, where the central bank has indicated it is finished tightening. At the same time, the outlook for key Kiwi-dollar supports is weakening. China’s latest manufacturing PMI came in at 49.2, which signals contraction in New Zealand’s largest trading partner. In addition, global dairy prices have dropped more than 5% across the first few auctions of 2026, which reduces New Zealand’s export income. After the sharp rally above 1.1800, the pair looks technically overbought. This raises the chance of a modest pullback or a period of consolidation. For that reason, it may be better not to chase the move at current levels, and instead look to buy on dips. The broader fundamental case for a higher AUD/NZD remains intact, so any weakness may offer an entry opportunity. Over the coming weeks, we see buying AUD/NZD call options as a sensible approach. This can provide exposure to a potential move toward 1.1900 while limiting downside to the premium paid. A strike near 1.1850 with an April 2026 expiry should allow enough time for the uptrend to reassert itself. We are watching the 1.1710 area as an important support zone for potential entries. Traders should also pay attention to Governor Breman’s upcoming speech. We expect the dovish tone to continue, but any surprise remarks could still create short-term volatility. Create your live VT Markets account and start trading now.AUD/JPY rises 0.4% as hawkish RBA boosts the Australian dollar, widening the policy gap with the BoJ
AUD/JPY rose about 0.4% on Wednesday. The move was driven by a stronger Australian Dollar after hawkish Reserve Bank of Australia (RBA) minutes. The minutes said inflation risks have increased, and the Board is ready to tighten policy again if needed.
In Japan, former BoJ board member Adachi said an April rate rise is likely once enough data is available. Japan’s Q4 GDP came in at 0.1% quarter on quarter, below expectations, but markets still kept pricing for an April move.
