Russia’s producer price index fell 2.5% month on month in January. In the previous month, it fell 1.6%. This means producer prices dropped faster in January than in the month before. The month-on-month change weakened by 0.9 percentage points.

Deflationary Pressure And Growth Signal

The sharper fall in producer prices (-2.5% in January) points to strong deflationary pressure in Russia’s industrial sector. It suggests domestic demand is weakening and producers are cutting prices to keep sales moving. For us, this supports the view that economic growth is slowing in the first quarter of 2026. This release also adds weight to the case for a more dovish Central Bank of Russia, especially with the key rate still at 10.5%. After this data, the chance of a rate cut at the March meeting is likely higher than the 40% level we saw last week. We saw a similar, but smaller, drop in producer prices in mid-2025, which was followed by a period of easier monetary policy. If rate-cut expectations build, the ruble may stay under pressure. USD/RUB has already tested the 105 level this month, and this PPI reading gives a fundamental reason for the pair to move higher. Derivatives traders may look at call options on USD/RUB or put options on ruble-denominated assets to position for further ruble weakness. There are also implications for commodity-linked instruments, as Brent crude has fallen below $75 a barrel. Lower oil revenue together with domestic deflation creates a tougher outlook for Russia’s economy. Given these cross-currents, positioning for higher volatility in Russia-linked assets—using strategies like straddles or strangles—may make sense in the coming weeks.

Strategy For Volatility And Risk

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A recent video repeated this message: “Buy the tickets, don’t just watch the flight take off from the runway.” Since Monday, 16 February 2026, the Nifty has risen about 350–400 points from the 25,370 low. The video follows the Nifty’s move toward 26,000 and also explains an alternate scenario. It also covers the Bank Nifty moving above 60,900 and reaching 61,500.

Nifty Bank Nifty Key Levels

Bank Nifty is about 200 points below the prior high of 61,765. The video also shares an update on Waree Energies after a sharp rally. It also reviews Tata Steel, Bandhan Bank, and IFCI. The market has confirmed the bullish momentum we expected, with a strong rally from the week’s lows. Foreign Institutional Investors were net buyers of more than ₹15,000 crore in the first half of February, which supports the uptrend. Because of this, traders can focus on bullish setups, such as buying call options or futures on small dips. For Nifty, the main scenario is a move toward 26,000. Monthly expiry option-chain data shows the highest open interest at the 26000 Call strike, making 26,000 a key psychological level. Heavy Put writing at 25,500 has also created a strong support zone for the index.

Volatility Options Strategy

BankNifty is even stronger and is close to its all-time high of 61,765. A breakout above this level may trigger short-covering and speed up the rally. Traders should expect higher volatility as the index tests this resistance area. India VIX has dropped to around 13, so options are relatively cheaper. This is a good setup for traders who want to build long positions using call options. At the same time, low volatility can also support selling out-of-the-money puts to collect premium. Strong macro data also backs this move. Q3 GDP growth for FY2025 came in at a solid 7.8%. This rally is a clear recovery after the consolidation seen in the last quarter of 2025. Current momentum suggests domestic factors are now leading the trend. Create your live VT Markets account and start trading now.

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Rabobank’s Senior US Strategist, Philip Marey, expects the FOMC to deliver three 25 bps rate cuts in 2026. He now expects the easing cycle to start in June, not March. Stronger US labour market data have reduced the need for early cuts. Softer CPI inflation supports cuts later in 2026.

Rabobank Rate Cut Path

Rabobank expects cuts in June and September, and adds a third cut in October. It notes that the September and December meetings include an updated Summary of Economic Projections. The federal funds rate is currently 3.50–3.75%. Rabobank projects a total reduction of 75 bps in 2026, with the rate ending slightly below neutral. The article says a new Fed Chair may push for more than one cut. It also says the data are unlikely to push Jerome Powell to deliver more cuts during his remaining months as Chair. Given the strength of the labor market, we should now assume the Federal Reserve will not begin cutting interest rates in March. The January jobs report showed the economy added a strong 295,000 jobs. The unemployment rate stayed low at 3.6%. That removes any urgency for the Fed to act right away. As a result, short-term derivatives positions that were betting on an immediate cut may need to be unwound.

Trading Implications For 2026

Even so, easing inflation strengthens the case for cuts later this year. The latest CPI report shows headline inflation cooled to 2.3% year-over-year. That clears the way for future easing once the Fed is confident the labor market is stable. The derivatives market is already pricing this in. CME FedWatch probabilities for a March cut have fallen below 15%, while the odds of a cut by June have risen above 70%. For the coming weeks, this points to selling near-term volatility and buying volatility further out. Options on interest rate futures expiring in March and April look less attractive. Positioning for bigger moves around the June and September FOMC meetings looks more sensible. One way to express this view is with calendar spreads on SOFR options to benefit from the shift in timing. We also need to watch the Fed leadership transition, as Chairman Powell’s term is expected to end in May. A new Chair may want to set a new policy direction. That supports the idea of multiple cuts in the second half of 2026. In other words, the easing cycle looks delayed, not derailed. In late 2025, markets rallied sharply when rate cuts first came into view. Strong economic data has cooled that early excitement, but expectations for lower rates are still in place. The key question now is not *if* the Fed will cut, but exactly *when* the cycle begins this summer. Create your live VT Markets account and start trading now.

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Palo Alto Networks shares fell about 9% to $149 on Wednesday after the company reported its fiscal 2026 second-quarter results. The stock was last at this level on April 7, 2025, after tariff news tied to President Donald Trump. The company posted adjusted EPS of $1.03, beating estimates by $0.09. Revenue came in at $2.59 billion, about $10 million above forecasts. At the open, US stock indices rose, and US Treasury yields and gold also moved higher.

Guidance And Cyberark Deal Impact

Full-year adjusted EPS guidance was $3.65 to $3.70, below the Street average of $3.87. Full-year revenue guidance was $11.3 billion, compared with $10.5 billion expected. The $25 billion CyberArk deal includes about 56.6 million new shares, plus $45 per share in cash. Annual recurring revenue (ARR) for Next-Generation Security rose 33% year over year to $6.3 billion. The company also raised combined ARR guidance to $8.67 billion, above the Street estimate of $7.07 billion. The 200-day simple moving average is just below $193. Key chart levels sit near $144 and $142, with additional support near $130. The Relative Strength Index (RSI) is considered oversold below 30, and the stock typically reaches that level only briefly about every six months. The market may be overreacting to the earnings guidance, which could create an opportunity. The 9% drop appears tied to EPS guidance that may look weaker because the CyberArk acquisition adds share dilution. This move also looks company-specific, since the broader US indices opened higher, suggesting the overall market remains stable.

Options And Technical Trade Setup

For investors who agree with management’s view, the support zone between $142 and $144 is important. This area held during the August 2024 and April 2025 sell-offs, making it a proven floor. One possible approach is selling cash-secured puts with a strike near $140 for March or April expirations to collect premium. After today’s drop, implied volatility on PANW options jumped above 55%, well above its 30-day average of 35%. Higher implied volatility makes options more expensive and signals the market expects bigger price swings. In this setup, strategies that benefit from collecting premium—such as covered calls or put spreads—can look more attractive. Still, there is risk that lower EPS guidance reflects real margin pressure. If the stock breaks below the key $142 support, it could slide toward the next major support near $130, a level not seen since 2023. Buying puts could act as a low-cost hedge if that support fails in the coming days. The longer-term outlook remains positive, as the cybersecurity market is projected to grow by more than 12% in 2026. Palo Alto’s 33% ARR growth in its next-gen security platform shows it is benefiting from that trend. The main question now is whether this is a short-term guidance issue or a longer-term challenge tied to integrating a major acquisition. Create your live VT Markets account and start trading now.

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USD/CHF traded near 0.7717 on Wednesday, up 0.20% on the day. It held above 0.7700 and stayed inside the same tight weekly range. Trading volumes were light ahead of the release of minutes from the latest Federal Reserve meeting. The Fed kept its benchmark rate unchanged at 3.50%–3.75%, and markets are watching the minutes for hints about the next policy move.

Fed Minutes In Focus

Market pricing still suggests several rate cuts this year if inflation keeps cooling. Fed officials, including Chicago Fed President Austan Goolsbee, have said any cuts will depend on incoming data such as GDP and the PCE Price Index. In Switzerland, this week’s calendar is quiet. The Swiss Franc has stayed weak after softer CPI data. Inflation has been near the lower end of the Swiss National Bank’s target range. That has raised expectations that policy will stay loose, and that negative rates could return. With USD/CHF trading calmly around 0.8850, volatility remains low as markets wait for the Fed minutes. The narrow range shows many traders are avoiding big positions until they have more clarity. In short, the market is waiting for a clear trigger. The Fed is widely expected to keep rates steady, especially after the latest US inflation report came in slightly hotter at 2.9% and the labor market added a strong 225,000 jobs last month. Traders will look for any wording in the minutes that points to when rate cuts could begin later this year. Until then, the pair may stay stuck in place. This setup is similar to what we saw in early 2025, when the Fed held rates at 3.50%–3.75%. At that time, markets also studied every official comment to guess when easing would start. The same pattern is back: macro data is driving expectations.

Swiss Franc Policy Divergence

The Swiss Franc is also under pressure because Swiss inflation is still falling, recently reaching 1.2%. That keeps the Swiss National Bank on track to be one of the first major central banks to cut rates, possibly as soon as next month. This gap between a cautious Fed and a more dovish SNB gives USD/CHF underlying support. For derivatives traders, low implied volatility may offer an opportunity. Buying options—such as a long straddle—can position for a sharp move after the Fed minutes. This approach can benefit from a breakout in either direction, without needing to predict what the minutes will say. Create your live VT Markets account and start trading now.

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EUR/USD fell on Wednesday. It traded near 1.1817, down almost 0.25%. The Euro weakened after a Financial Times report said ECB President Christine Lagarde may leave before her term ends in October 2027. There is no official confirmation. US data also supported the Dollar. Industrial Production rose 0.7% in January, above the 0.4% forecast, after a revised 0.2% increase in December. Durable Goods Orders fell 1.4% in December versus a 2% forecast, after a 5.4% jump in November. Orders excluding Defence dropped 2.5% after a 6.6% gain. Core orders excluding Transportation rose 0.9%, above the 0.3% forecast.

Dollar Momentum Builds

Building Permits rose to 1.448 million in December from 1.388 million, above the 1.40 million forecast. Housing Starts increased to 1.404 million versus 1.33 million expected, up from 1.322 million. The Dollar Index climbed to about 97.45, up nearly 0.35%, as attention shifted to the FOMC January minutes. The Fed held rates at 3.50%–3.75% in a 10–2 vote. Since then, January NFP rose to 130K from 48K. Unemployment eased to 4.3% from 4.4%. CPI was 0.2% m/m, and inflation cooled to 2.4% y/y from 2.7%. Markets are pricing in about 60 basis points of cuts later this year. The date today is 2026-02-18T20:41:53.721Z. Right now, the market is pushing against the Fed, but the data supports the Fed’s stance. Strong US Industrial Production and housing data are keeping demand for the Dollar firm. This points to a higher Dollar in the short term. All focus is now on the upcoming FOMC minutes for signals on policy. Inflation has cooled to 2.4%, but the labor market is still holding up, with payrolls at 130K. If the minutes sound hawkish, it could challenge the market’s expectation for rate cuts.

Positioning For Fed Risk

Markets are pricing in around 60 basis points of rate cuts for later this year. That may be too soon. In late 2023, traders priced in more than 150 basis points of cuts for 2024, but strong data forced a sharp repricing. This suggests the market may be moving too far ahead again. Meanwhile, the Euro faces added pressure from uncertainty around ECB leadership. This risk in Europe is another reason EUR/USD could trend lower, with the pair currently near 1.1817. A stronger Dollar and a weaker Euro add to the downside pressure. Over the next few weeks, we favor positioning for Dollar strength and Euro weakness. Buying EUR/USD put options can capture downside while limiting risk ahead of the Fed minutes. Given the event risk, a bear put spread may also help reduce upfront cost. Create your live VT Markets account and start trading now.

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Australia’s Westpac–Melbourne Institute Leading Index slowed to 0.02% in January 2026. Six-month annualised growth also eased to +0.02%, down from +0.44% in December. This suggests the economy has lost momentum, even though commodity prices have supported the Australian Dollar. The slowdown came mainly from weaker consumer sentiment and fewer housing approvals. Over six months, these cut the index by 0.16 percentage points and 0.23 percentage points. Commodity prices added 0.36 percentage points, but that boost was partly offset by a 4% rise in the AUD.

RBA Policy And Growth Tension

The Reserve Bank of Australia still has a hawkish bias. If upcoming data allows, it may raise rates again, which could slow growth further. The Reserve Bank of New Zealand is described as neutral, with inflation risks viewed as balanced. AUD/USD is trading near a longer-term value of 0.75. At this level, the exchange rate’s impact on inflation and trade is said to be weaker. Australia’s wage price index rose 0.8% quarter-on-quarter in Q4 2025, matching Q3 2025 and up from 0.7% in Q4 2024. Annual wage growth was 3.4% year-on-year, up from 3.3% in Q3 2025 and 3.2% in Q4 2024. The article notes it was produced using an AI tool and reviewed by an editor. We are seeing a clear conflict: the central bank may want to keep raising rates, but the economy is losing speed. The Leading Index has flattened, showing that the growth seen in late 2025 has stalled. This tug-of-war adds uncertainty to the Australian dollar’s outlook.

Implications For Traders And Volatility

The RBA is staying hawkish because inflation is still high. Q4 2025 CPI was 4.3%, well above the target band. Wage growth of 3.4% year-on-year may also worry the RBA, because it can keep price pressures alive. As a result, another rate hike at an upcoming meeting remains possible, which would normally support the Aussie. But the domestic economy is sending warning signs. The biggest drags are falling consumer sentiment and weaker new dwelling approvals, both of which tend to be hit hard by higher interest rates. Meanwhile, the US Federal Reserve has signaled a pause. Markets are now pricing in possible rate cuts later in 2026, which could limit US dollar strength. Commodity prices, especially iron ore holding above $125 per tonne, are helping to support the currency. This reduces the risk of a sharp fall in the Aussie, even as the growth outlook worsens. The exchange rate near 0.75 looks like a middle ground where these forces are balancing out. For derivative traders, this points to a range-bound market with bursts of volatility rather than a clean trend. With signals pulling in opposite directions, implied volatility in AUD/USD options has risen. Strategies like straddles or strangles may appeal to traders expecting a breakout. Traders who expect the pair to stay trapped between a hawkish RBA and a slowing economy may prefer selling options to collect premium within a defined range, such as 0.7350 to 0.7650. This setup is similar to parts of Europe in 2023, where central banks kept tightening even as leading indicators weakened. That period produced choppy, two-way trading before a clearer trend appeared months later. A similar phase of indecision for the Aussie dollar may follow in the weeks ahead. Create your live VT Markets account and start trading now.

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US industrial production rose 0.7% month over month in January. The forecast was 0.4%. The release was published on 18/02/2026 at 14:15:17 GMT. The source was FXStreet.

Implications For Growth And Fed Policy

This stronger-than-expected industrial production reading suggests the US economy has more momentum than we had priced in. It challenges the slowdown story that built through 2025. The Federal Reserve is likely to see this resilience as a reason to keep a cautious, restrictive approach to policy. Markets are already repricing rate expectations. The chance of a mid-year rate cut was above 60% a month ago, but it has now dropped below 40%, based on CME FedWatch data. Core inflation also remained sticky near 3.2% in the last quarter of 2025. With activity still strong, the case for rates staying higher for longer looks stronger. In this setup, selling near-term interest rate futures may fit a “higher for longer” view. For equity derivatives, this may pressure the broader market, but it can still create opportunities in specific sectors. A more hawkish Fed could limit gains in the Nasdaq 100. However, industrial and manufacturing stocks may benefit more directly from stronger output. One approach is to consider call options on industrial sector ETFs, especially those that lagged during the slowdown fears in late 2025. This report is also supportive for the US dollar, which had been trending lower since the Dollar Index (DXY) peaked near 106 last autumn. A more hawkish Fed outlook often draws foreign capital, which can lift the dollar versus other currencies. Long USD positions through futures may look more attractive, especially against currencies where central banks are signaling a more dovish path. Higher factory output also points to stronger demand for industrial commodities. Copper futures, for example, look more interesting after prices fell in late 2025 on recession concerns that now look less convincing. This data suggests demand for raw materials could beat the market’s recent bearish supply-and-demand assumptions.

Commodity Demand And Trading Considerations

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US capacity utilisation was 76.2% in January. This was below the forecast of 76.5%. This means capacity use was 0.3 percentage points under expectations. The figure shows how much of the nation’s industrial capacity was in use during the month.

Industrial Activity Shows More Slack

January capacity utilisation came in at 76.2%, below our 76.5% forecast. This points to a softer industrial sector than expected. In simple terms, factories are running with more spare capacity. That can signal weaker economic momentum going into the first quarter. Alongside the January CPI report, which showed inflation easing to a 2.8% annual rate, this supports a more dovish Fed outlook. Interest rate futures have moved, with markets now pricing about a 70% chance of a rate cut by the June meeting. Taken together, these data suggest the Fed’s tightening cycle is likely doing what it was meant to do. For equity traders, a more cautious stance may make sense. Consider put options on broad indices like the S&P 500 to hedge against a pullback tied to weaker growth. If implied volatility rises, long positions in VIX futures or VIX options could also benefit over the coming weeks. In context, 76.2% is the lowest reading in more than a year. It also extends the cooling trend seen through the second half of 2025, when utilisation slipped from around 78%. This looks more like a sustained trend than a one-off dip.

FX Markets Price In Lower Rates

In commodities, lower utilisation can point to softer demand for industrial inputs. That argues for caution in materials and energy. Copper futures have already reflected this, dipping below $3.70 per pound. Short positions in industrial metals, or put options on related sector ETFs, may be worth considering. The growing case for earlier Fed cuts is also pressuring the US dollar. The Dollar Index (DXY) has broken below 103 on this news. Further weakness is possible, which could support long positions in currencies such as the euro or yen through futures or call options. Create your live VT Markets account and start trading now.

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Nomura analysts said UK wage and inflation data still point to further monetary policy convergence with the euro area. They linked this to a weakening labour market, especially slower private-sector wage growth. They also noted the UK unemployment rate has risen more than in most other developed markets. They said some labour indicators have cooled less, such as PAYE jobs. Even so, they said the broader picture still supports easier policy. On inflation, they said headline inflation was in line with forecasts, but slightly above the Bank of England’s projection.

Services Inflation And Rate Cut Timing

They said services inflation remains more stubborn, coming in 0.25 percentage points above the Bank of England’s expectation. They said this lowers the odds of a March rate cut and could shape near-term decisions by Monetary Policy Committee members. They said the services inflation trend still supports policy convergence with the euro area. They also said a narrowing in EUR-GBP front-end rate spreads would support EUR/GBP. They said the next market focus is next week’s UK by-election, following Friday’s PMI data. They said a loss for the incumbent Labour Party would increase pressure on Prime Minister Starmer and raise the odds of a leadership contest. We saw this convergence story play out during 2025, as both central banks started cutting rates. Since then, the Bank of England has lowered rates to 4.50%, while the ECB’s key rate is now 3.25%. This has reduced the gap that once supported the pound. The same trend still argues for a long EUR/GBP bias in the weeks ahead.

Sticky Services Inflation And Policy Divergence

Concerns about sticky services inflation from early 2025 still matter today. The latest UK data puts services inflation at 3.5%, well above headline CPI at 2.1%. This could slow the pace of future BoE cuts versus the ECB, where core inflation is now comfortably below 2.5%. Traders may want to consider buying medium-term EUR/GBP call options if they expect this divergence theme to strengthen. The UK labour market has continued to soften, as we flagged last year, though only gradually. Unemployment has edged up to 4.5%. Wage growth is still solid at 4.0%, but it has clearly fallen from the highs seen in 2024. This supports the view that the BoE has room to cut further later this year, which could weigh on the pound. Political risks highlighted in early 2025 did trigger short bursts of volatility, especially around fiscal updates. While the government has since looked more stable, trade talks with the EU are now a fresh source of uncertainty for sterling. In this setting, traders may prefer structures like bull call spreads on EUR/GBP, which limit downside while keeping exposure to upside. Create your live VT Markets account and start trading now.

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