The Reserve Bank of New Zealand kept the Official Cash Rate at 2.25% and said the first possible increase may not come until late 2026 or early 2027. The New Zealand Dollar fell after the new rate track pushed the timing of hikes further out than the market expected. Coming up: New Zealand’s January trade balance and a speech from Governor Breman. In the US, initial jobless claims are due, along with comments from Fed officials Bostic, Bowman, and Kashkari.

Rbnz Signals Extended Hold

New Zealand inflation is 3.1% year on year. That is above the bank’s 2% midpoint target, but still within its 1% to 3% medium-term range, and it is not rising. Australia’s cash rate is 3.85% after a February hike, which highlights the policy gap between the two countries. NZD/USD opened near 0.6050 and fell 1.35%. It broke below 0.6000, giving back about two weeks of gains. The pair is still above the 50-day EMA near 0.5907 and above the 200-day EMA near 0.5850. The November low near 0.5580 remains the base of the wider uptrend. The Stochastic Oscillator has turned down from the upper zone. Support sits near 0.5907, then 0.5850. Resistance is at 0.6000 and 0.6094. The RBNZ’s decision to hold at 2.25%, while signaling no hikes until late 2026, puts downward pressure on the New Zealand Dollar. The message is clearly dovish, especially compared with other central banks. This keeps the bias tilted toward further Kiwi weakness in the weeks ahead. Recent local data supports this view. January’s quarterly CPI showed annual inflation easing to 2.9%. The unemployment rate in Q4 2025 rose to 4.1%. Together, these figures give the RBNZ room to wait, and they reduce near-term support for the currency from rate-hike expectations.

Key Levels And Positioning

Overseas factors are also working against the Kiwi. Prices at the latest Global Dairy Trade auction fell 1.5%, the third straight decline. That hurts expectations for New Zealand’s export income. Mixed January PMI data from China, New Zealand’s largest trading partner, adds more uncertainty for this risk-sensitive currency. The policy split is clearest versus the Australian Dollar, as the Reserve Bank of Australia has lifted its rate to 3.85%. This widening rate gap makes a long AUD/NZD position more attractive. The cross performed well in 2024 when a similar gap opened, which is a useful reference point for this setup. For NZD/USD, the break below the psychological 0.6000 level is an important technical development. With the Federal Reserve still relatively firm because US inflation remains sticky, NZD/USD looks more likely to drift lower. The 50-day moving average near 0.5907 is the next key level to watch. From a strategy angle, one option is to buy NZD/USD put options expiring in March or April to benefit from a potential move lower. This limits risk while keeping exposure to a slide toward the 0.5900 area. Another approach is a bearish put spread, which can reduce upfront cost while still aiming for a move below current levels. Create your live VT Markets account and start trading now.

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US weekly crude oil stocks reported by the API fell by 0.609 million barrels for the week ending 13 February. The previous week saw a rise of 13.4 million barrels.

Reversal In Inventory Signal

The latest API data shows a crude draw of 0.609 million barrels, reversing last week’s large 13.4 million-barrel build. The prior build pointed to an oversupplied market. This week’s unexpected draw suggests the market may be tighter than expected in the near term, which can support prices. The draw also matches recent weather impacts. A polar vortex in the Northeast likely lifted demand for heating oil, an important distillate product. At the same time, U.S. refinery utilization has increased to 86.2% in early February as plants come out of seasonal maintenance. As refineries run more, they buy more crude to prepare for expected spring driving-season demand. This level of weekly volatility is similar to what we saw in late 2024. Back then, mixed signals from China’s economic data and OPEC+ production discipline led to sharp price moves. The key point is that one weekly figure does not make a trend, so confirmation from the official EIA report will matter. Mixed signals are also pushing implied volatility higher. The oil VIX (OVX) is now near 38, its highest level this year. In this kind of market, options strategies such as call spreads can be appealing because they offer upside exposure with defined risk. We are positioning in April WTI contracts to see how these supply and demand factors develop over the next month.

Risk Positioning Ahead

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BNY EMEA Macro Strategist Geoff Yu says Latin American sovereign debt positioning in global portfolios is at multi-year highs. Combined holdings in Brazil, Mexico, Argentina, Chile, Colombia, and Peru are now above the peaks seen in 2023. Total sovereign holdings in the region are just under 1.2% of global sovereign bond holdings. Latin American bonds are no longer under-owned versus historical levels. If U.S. yields stabilise or rise, positioning may matter less for valuations. Future returns are likely to depend more on domestic fundamentals and U.S.–regional relations. The article was created with the help of an Artificial Intelligence tool and reviewed by an editor. It was published by the FXStreet Insights Team, which curates market observations and adds analysis from internal and external contributors. Latin American sovereign debt now looks like a crowded trade. Our holdings in the region are above the 2023 highs. This suggests the easy gains may be over because the asset class is no longer under-owned. With combined holdings just under 1.2% of total sovereign bonds, the risk of a reversal is rising. Risks are increasing as U.S. yields firm, which can hurt the carry trade. Last week’s U.S. January inflation print was hotter than expected at 3.1%. That makes near-term Federal Reserve rate cuts less likely, possibly pushing them beyond summer. Higher U.S. yields make U.S. debt more attractive and can pressure emerging market assets. Over the next few weeks, we should consider buying put options on broad Latin American bond ETFs to hedge our long exposure. This can be a relatively low-cost way to protect against a pullback driven by higher U.S. rates. It can also benefit from a rise in volatility, which looks more likely now that the positioning tailwind has faded. Currency risk is now the main concern, especially after the sharp sell-off in the Mexican peso in Q4 2025. Hedging BRL and COP exposure with currency options also makes sense. A stronger dollar could erase any remaining yield advantage from the bonds. Country selection is now more important, because domestic fundamentals should drive performance. For example, Peru’s copper exports are rising while Chile’s are lagging, which may support a relative-value trade. One approach is to use credit default swaps (CDS) to go long Peru sovereign risk while shorting Chile, aiming to capture the widening gap.

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US net long-term TIC flows fell to $28bn in December, down from $220.2bn in the previous period. This points to a sharp drop in net cross-border buying of long-term US securities during the month.

Dollar Outlook And Positioning

The sharp fall in foreign buying of long-term U.S. assets in December 2025 is a key warning sign for the dollar. Flows dropped from more than $220bn to just $28bn, showing weaker global demand for U.S. securities. This could support short-dollar trades, including put options on dollar-tracking ETFs. Lower foreign demand can push U.S. Treasury yields higher, because rates may need to rise to attract buyers. Last week’s 10-year note auction hinted at this, with weaker foreign participation and a higher yield. Traders may want strategies that benefit from falling bond prices, such as puts on Treasury bond ETFs like TLT. A flow shock like this often comes before higher market volatility. The VIX is trading near 14.5, which may not fully reflect the new risk. This may create an opening to buy VIX call options or take long-volatility positions on major indices.

Equity Risk And Hedging

This setup is similar to the capital outflows seen before the late-2023 equity drop, when foreign selling came ahead of weaker stock prices. The S&P 500 is up nearly 4% year to date, but support from foreign investment now looks less reliable. Consider protective puts on indices like the SPX or QQQ to hedge against a possible pullback in the weeks ahead. Create your live VT Markets account and start trading now.

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US total net Treasury International Capital (TIC) flows fell to $44.9bn in December, down from $212bn the month before. The data tracks cross-border purchases and sales of US long-term securities, as well as banking flows. The December figure suggests much lower net foreign demand for US assets than in the prior month. The report includes both private and official flows.

Foreign Appetite For Us Assets

Foreign investment flows into the U.S. dropped sharply in December 2025, falling to $44.9bn from a very strong $212bn in November. This big slowdown suggests global investors became more cautious heading into 2026. It also raises questions about how attractive U.S. assets will be in the weeks ahead. Lower demand for U.S. assets can put downward pressure on the dollar. The U.S. Dollar Index (DXY) has already looked softer this year and failed to clearly break above 104 in late January and early February. One way to position for a potential move lower is to consider put options on dollar-tracking ETFs like UUP, targeting a possible drop toward the 102 support area seen last fall. If foreign buyers purchase less U.S. government debt, Treasury yields may need to rise to pull in more domestic demand. The 10-year Treasury yield has already climbed from about 3.9% to above 4.1% since the start of the year, which may reflect weaker foreign demand. A direct way to express a view that yields could keep rising is to consider put options on long-term Treasury ETFs such as TLT.

Volatility Hedging Considerations

A sharp pullback in capital inflows can sometimes come before a jump in stock-market volatility. During the 2022–2023 rate-hike cycle, periods of weaker foreign inflows often lined up with S&P 500 pullbacks. As a hedge against a possible correction, it may be prudent to consider call options on the VIX index with March or April 2026 expirations. Create your live VT Markets account and start trading now.

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Norwegian Cruise Line Holdings (NCLH) jumped 12.15% in one session. Trading volume topped 60 million shares, about three times its normal daily average. The move came after reports that Elliott Management has built a stake of more than 10%. NCLH traded near $29.50 in early 2025, then slid to a 52-week low of $14.21. The stock later bounced to about $27 in August and to around $25 in late 2025, but both rallies stalled. Those earlier highs create a falling (descending) trendline near $25.00. NCLH closed at $24.10, roughly $0.90 below that level. Royal Caribbean recently reported results that included seven of the strongest booking weeks in its history. NCLH reported Q3 2025 revenue of $2.9 billion and adjusted EPS of $1.20. It also has a 2026 adjusted EPS target of $2.45. The next key date is 2 March, when NCLH reports Q4 and full-year 2025 results. This will be the first report under CEO John Chidsey. NCLH has surged on news of Elliott Management’s stake, and the stock is now at an important technical level. The rally has pushed shares up to a falling trendline near $25, a level that has stopped advances for more than a year. The main question is whether this activist-driven momentum can finally break through. If you’re looking for a bullish breakout, buying call options is the most direct choice. With earnings coming on March 2, options expiring later in March or in April may make more sense. They give the trade time to develop. A strong close above $25 could make the $26 or $27 strike calls more attractive, since it would suggest a change in trend. The bullish case also has help from the broader industry. Cruise bookings for 2026 are reportedly running about 12% above the record pace of 2025. That lines up with Royal Caribbean’s strong update. The market may be reacting to strength across the sector, not just at one company. If you think resistance will hold, a bearish approach may fit better. Implied volatility is elevated above 55% heading into earnings. In that setup, selling a bear call spread (for example, the March $26/$28 spread) could work well. It can profit if NCLH fails to clear resistance, and it can also benefit from the typical drop in volatility after earnings. Options prices are implying a move of about +/- 9% after the March 2 earnings release. That suggests the market expects a big swing. The uncertainty comes from several factors at once: a new CEO, an activist investor, and a key technical decision point. If the stock fails to break above $25, it could quickly drop back toward the $21 support area seen earlier this year. If you don’t want to pick a direction, high implied volatility can still be useful. An iron condor is one way to trade that view. It aims to profit if the stock stays within a set range after earnings, and it can benefit from the post-earnings “volatility crush,” as long as the move is not larger than the +/- 9% the market is currently pricing in.

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Tesla shares swung sharply after earnings at the end of last month. The stock dropped more than 11.5% after the release, then bounced back more than 12.7%. On the daily chart, price action is forming a head and shoulders pattern. This pattern often signals a shift in momentum after a volatile move.

Head And Shoulders Pattern Overview

If the pattern completes and breaks down, a measured move suggests a target near $276. This estimate comes from the pattern’s height and is used as a reference level. Recent trading shows the stock has been repricing since earnings. We saw heavy selling followed by strong buying. This back-and-forth is common when chart patterns like this develop. The discussion also highlights risk management when trading technical setups. Chart patterns are tools, but they work best with proper position sizing and clear risk limits. Looking back at the volatility after earnings in January 2025, a classic head and shoulders pattern formed on the daily chart. That setup signaled a momentum shift and was followed by a meaningful decline in the months that followed. We watch these patterns because they reflect the tug-of-war between buyers and sellers during key periods.

Risk Management And Trade Planning

The spring 2025 drop toward the $276 area is a useful reminder of how the stock can trade under pressure. Now, with Q4 2025 deliveries missing analyst estimates at 610,000 vehicles and fresh concerns about European demand, similar weakness is showing up again on the chart. The market appears to be resetting expectations, much like it did a year ago. With that in mind, we are considering protective strategies for the weeks ahead. One approach is buying put options that expire in March or April 2026. This can benefit from a move lower while keeping maximum loss limited to the premium paid. It also avoids the open-ended risk that comes with shorting the stock. For traders who want income or who are less bearish, selling out-of-the-money call credit spreads is another option. This strategy can work if the stock moves sideways or lower by collecting premium, based on the view that a strong upside breakout is less likely. It offers a defined risk and reward profile. Past price swings show that two-way volatility is always a factor with this stock. No matter the strategy, discipline and risk control should come first. Any position should be sized appropriately, with the potential loss clearly defined before entering the trade. Create your live VT Markets account and start trading now.

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Christine Lagarde may leave her role as ECB President before her term ends in October 2027, the Financial Times reported. An ECB spokesperson said on Wednesday that Lagarde has not decided whether she will stay for her full term. The Federal Reserve’s January FOMC minutes said more rate cuts could be appropriate if inflation falls as expected. Some officials also wanted language that kept the option of rate hikes on the table if inflation stays above target. The 2% inflation goal remains the same, but the timing is uncertain.

Market Levels After The Minutes

After the minutes, the US Dollar Index (DXY) traded near 97.70, a one-week high. EUR/USD was near 1.1790, GBP/USD near 1.3500, USD/JPY near 154.80, AUD/USD near 0.7040, and USD/CAD near 1.3700. Gold traded around $4,980. Thursday, February 19 includes Australian January Employment Change, the Australian Unemployment Rate, and a speech from ECB President Lagarde. Friday, February 20 includes UK January Retail Sales, Germany February flash HCOB Composite PMIs, Eurozone PMIs, UK flash February S&P Global PMIs, US December Core PCE, and February US S&P Global PMIs. Central banks bought 1,136 tonnes of gold worth about $70 billion in 2022, the highest annual total on record, according to the World Gold Council. Gold often moves in the opposite direction to the US Dollar, US Treasuries, and risk assets. It also tends to rise when interest rates fall. A possible early departure by ECB President Lagarde adds uncertainty for the euro. Recent data showed Eurozone core inflation unexpectedly rose to 2.8% in January 2026. A change in leadership could shift the ECB’s policy path at a critical time. We think buying EUR/USD put options could help hedge risk, or profit, if the pair falls further below 1.1790. The Fed’s flexible, two-sided policy approach suggests volatility may stay high. The CME FedWatch Tool now shows only a 40% chance of a rate cut by June 2026, down from 70% last month. This shift reflects a more hawkish tone. Because of this, long-volatility strategies—such as straddles on the S&P 500 or major currency pairs—may look attractive ahead of key inflation releases.

Dollar Strength And Cross Asset Impacts

A stronger dollar is weighing on other currencies, especially where local data is weak. In the UK, wage growth for the three months to December 2025 slowed to 3.5%, the lowest in two years. That makes GBP/USD more vulnerable to a break below the 1.3500 support level. A similar setup is developing in USD/CAD, where Canada’s softer inflation data contrasts with stronger US conditions. Gold near $4,980 is harder to read because a strong US dollar usually puts pressure on prices. Central bank buying in 2022 helped create a long-term support level, but the current setup argues for caution. Gold ETF outflows have jumped to more than $2 billion globally over the past two weeks, suggesting some traders are taking profits after the rally. Looking ahead, Friday’s US Core PCE data could drive sharp moves. This inflation report is a key input for the Fed’s next decision. A higher-than-expected reading could push the DXY toward 98.00 and push rate-cut expectations further out. Using options to limit downside risk ahead of the release may be the safest approach. Create your live VT Markets account and start trading now.

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EUR/HUF has fallen close to two-year lows. At the same time, the Hungarian forint is hitting new highs as markets expect the National Bank of Hungary (NBH) to cut rates. Pricing suggests two 25bp cuts in February and March, with more easing likely later on. The forint has been supported by a risk-on mood toward emerging market currencies and by pre-election positioning. EUR/HUF is now at a level that many see as giving the NBH room to restart its cutting cycle. If the bank cuts next week, the damage to the currency is expected to be limited. The market has often sold EUR/HUF rallies. That implies that any forint weakness could bring new buyers back in. Rate cuts reduce carry returns, which could slow further EUR/HUF declines, even if the forint continues to strengthen into the April elections. Emerging market currencies have been steadier than developed market currencies this year as capital has flowed into emerging markets. This backdrop still supports the forint. Carry trading also remains attractive, even with rate cuts getting closer. In early 2025, the forint was again testing new highs ahead of the NBH cutting cycle. We viewed that as a signal that the bank could start easing. By then, the market had already fully priced in two 25bp cuts for February and March. That reduced the risk that the first cut would hurt the currency. With that setup, we treated any short-term forint weakness as a chance to add long positions. For derivatives traders, this pointed to selling out-of-the-money EUR/HUF call options to collect premium, based on the view that upside in the pair was limited. The market repeatedly sold rallies, which supported this approach. From today’s perspective (February 19, 2026), the strategy worked well through mid-2025. But the picture changed as the NBH cut its base rate aggressively through 2025, bringing it down to 5.75%. As rates fell, the forint carry trade became less attractive, which helped put a floor under EUR/HUF. With January 2026 inflation at 3.8%, the central bank now has much less room to keep easing. Because early-2025 cuts were clearly communicated, implied volatility on EUR/HUF options stayed relatively low. That made premium-selling strategies more appealing. A global risk-on phase for emerging markets also gave the forint a strong, but temporary, boost. We now know that sentiment shifted in late 2025, when global growth worries pushed investors back toward safe-haven assets. Even though the rate gap between the Eurozone and Hungary was expected to shrink, carry was still attractive for traders shorting EUR/HUF via forwards. They could lock in a favorable rate and earn the roll yield. Today the forward curve is much flatter, showing that the policy-rate gap between the ECB and the NBH is far smaller than it was a year ago.

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Rabobank said the US has announced the first three projects tied to Japan’s $550bn trade deal. The projects include about $33bn for an LNG-powered plant, a crude oil facility, and a synthetic industrial diamonds plant. The report said these projects show capital flowing into US real assets, not US stocks or bonds. It presented this as a way for Washington to steer where partner countries invest.

Us Trade Deal Projects

Rabobank also pointed to a Trump–Milei trade pact with Argentina. It said this is pressuring the EU to move ahead with its Mercosur free trade agreement, which is currently only applied on a provisional basis. The report added that parts of the US–Argentina deal overlap with, or replace, parts of the Mercosur arrangement. It used this to contrast politically driven trade priorities with technocratic free trade agreements. The article said it was produced using an AI tool and reviewed by an editor. There are clear signs the US is now steering foreign capital into specific, real assets instead of letting it flow passively into stocks and bonds. This suggests a strategic shift toward sectors like US energy infrastructure. The data supports this: US LNG export volumes to Japan rose 15% year over year in the last quarter of 2025.

Trading Implications For Markets

This looks like a working example of a new geoeconomic strategy. That means traders may want to look beyond broad index trades like SPY. Call options on targeted energy and industrial ETFs, such as XLE or XLI, could benefit if investment continues to focus on these sectors. Foreign direct investment into US energy infrastructure jumped by more than $50bn in the second half of 2025, which supports the case that this money is moving into physical assets. The new trade pact with Argentina may also create clear winners and losers, and it adds pressure to Europe’s ties with Mercosur. This can create pairs-trading setups, such as going long US agricultural commodities while shorting European equivalents. Since the pact was signed late last year, US soybean futures have risen steadily versus European wheat futures as markets price in trade diversion. Overall, this suggests geopolitical alignment now matters more than rule-based trade frameworks, which can increase market volatility. Traders may want to buy protection or use VIX derivatives to hedge against sudden moves after major political headlines. The VIX reflects this shift: it has averaged around 18 so far in 2026, higher than the calmer levels seen in early 2025. Create your live VT Markets account and start trading now.

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