U.S. annual CPI came in below forecasts, with inflation at 2.4% versus the expected 2.5% in January
The US Consumer Price Index (CPI) rose 2.4% year-on-year in January, below the 2.5% forecast.
Because January CPI came in slightly under consensus, we believe the Federal Reserve now has a clearer path to start easing monetary policy sooner than expected. This is the fourth straight month of disinflation, supporting a clear cooling trend in the economy. Markets now price in more than an 85% chance of a 25-basis point rate cut by the June 2026 meeting, up from about 60% just last week.
Danske Bank says Norway’s Q1 survey shows 2026–27 oil investment volumes stronger than Norges Bank expected
Norway’s Q1 oil investment survey shows expected spending of NOK 255.3 billion in 2026 and NOK 201.1 billion in 2027. This implies nominal growth of 0.6% in 2026 and 2.0% in 2027.
After adjusting for cost inflation, the implied investment volumes are stronger than Norges Bank’s December MPR projections. Norges Bank’s volume estimates were -3% for 2026 and -6% for 2027.
Oil Investment Outlook And Policy Signal Read Through
Norges Bank Governor Ida Wolden Bache’s annual address did not include any new monetary policy signals. Norges Bank also said it will start publishing a summary of the Monetary Policy Committee’s discussions later this year. The goal is to improve guidance and reduce volatility on MPC meeting days. The article notes it was produced using an artificial intelligence tool and reviewed by an editor. The new oil investment survey points to higher spending than Norges Bank expected. This suggests the Norwegian economy is stronger than the central bank forecast in December 2025. Because of this, we should question market pricing that assumes the bank will need to cut interest rates soon. This strong survey is not a one-off. Other data also points to a resilient economy. January unemployment came in at a solid 3.4%. Brent crude has also stayed firm, trading above $85 a barrel. Together, these factors support the view that the economy is on a stronger footing than previously expected.Krone Positioning And Volatility Implications
With this backdrop, traders should rethink bearish positions in the Norwegian Krone. There may be value in buying NOK call options versus the euro, or selling out-of-the-money puts on pairs like EUR/NOK. Stronger fundamentals could give the currency steady support over the next quarter. Separately, Norges Bank’s plan to publish summaries of its policy discussions is an important change. More transparency should reduce market surprises on meeting days. As a result, we may see fewer sharp and unpredictable moves like those that sometimes followed policy announcements in 2025. This also means implied krone volatility—especially for options that expire around future policy meetings—may be too high. Volatility-selling strategies, such as shorting straddles on EUR/NOK, could become more attractive. The risk of a surprise announcement from the central bank appears to be falling. In the coming weeks, the focus should be on a gradual, less volatile strengthening of the krone. The economic data supports NOK gains. The central bank’s new communication approach supports a smoother path for that move. Create your live VT Markets account and start trading now.Ahead of US inflation data, the euro drifts near recent lows against the dollar for a fourth straight day
The euro fell against the US dollar for a fourth straight day. It traded below 1.1860 after hitting a weekly high of 1.1928. Even though Eurozone data was strong, risk-off trading took over.
Eurozone GDP rose 0.3% in Q4 and was up 1.4% year-on-year, beating the 1.3% forecast. Employment increased 0.2% versus 0.1% expected, with jobs up 0.6% year-on-year.
Sentiment stayed weak after comments about AI and white-collar jobs. This came after another drop on Wall Street. The cautious tone carried into Asia and supported the US dollar.
In the US, Initial Jobless Claims fell by 5K to 227K, but that was still above the 222K forecast. Existing Home Sales fell 8.4% in January.
Trading was quiet ahead of US January CPI data. Headline CPI is expected at 2.5% year-on-year versus 2.7% in December. Core CPI is seen at 2.5% versus 2.6%.
We saw a similar setup in February 2025. The euro was stuck below 1.1860 even as Eurozone GDP surprised to the upside. Markets were in a risk-off mood, driven largely by fears about AI replacing white-collar jobs. Just like today, the main focus was the upcoming US inflation report.
Those AI fears have eased. Over the past year, investors have focused more on productivity gains than on immediate, large-scale job losses. Instead, attention has shifted back to a key driver: the different paths of the Federal Reserve and the European Central Bank. This policy gap is now the main force behind currency moves.
Recent data shows US inflation is still sticky. The January 2026 CPI came in at 2.9%, above the Fed’s 2% target, which has slowed expectations for rate cuts. In contrast, Eurozone inflation has cooled faster and is now 2.2%, giving the ECB more room to cut sooner. This helps explain why EUR/USD is trading near 1.0750, well below levels from a year ago.
Because the Fed remains cautious while the ECB sounds more dovish, the US dollar may stay stronger versus the euro. Higher US rates for longer continue to support the dollar. For now, EUR/USD still looks biased to the downside.
With that view, it makes sense to consider ways to profit from, or hedge against, a falling EUR/USD. Buying euro put options can limit risk while protecting against further declines. Another approach is to short EUR/USD futures, aiming for more downside ahead of the next central bank meetings.
Silver trades near $77.35 after rebounding from $74.00 lows but struggles to break above $79.00, heading for a third weekly drop
Silver (XAG/USD) traded at $77.35 on Friday, rebounding from Thursday’s lows near $74.00. It stayed capped below $79.00 and was on track for a third straight weekly decline.
Precious metals held within earlier ranges in a quiet session. Risk-off sentiment supported prices, but a firmer US Dollar Index limited gains.
Markets were waiting for the January US Consumer Price Index (CPI) report. The data could shift expectations for when the Federal Reserve may deliver its next rate cut.
Silver was consolidating around the middle of February’s range and remained below a declining 50-period simple moving average (SMA). The 50 SMA was near $81.00. MACD stayed below zero, and the RSI hovered around 40.
Resistance was near $79.00, with further levels at $81.00 and around $86.30. Support was near $74.00, followed by the February 6 low near $64.00.
The technical analysis section was produced with help from an AI tool.
With silver stuck between $74 and $79, the market appears to be waiting for the next US inflation data. This lack of direction suggests traders do not want to take big positions until the Fed’s next move is clearer. Current price action shows a familiar tug-of-war: risk-off demand is helping metals, while a strong dollar is keeping gains in check.
We are watching the January CPI release closely, especially after December 2025 printed a stubborn 3.4%. If CPI comes in hotter than expected, rate cuts may be pushed back. That could lift the dollar and send silver down toward the $64 support area. In that case, buying put options with a strike near $74 could be a sensible way to position for downside.
If inflation surprises on the low side, the dollar could weaken. That may be the trigger needed for silver to break above $79 and test the 50-period moving average near $81. In this scenario, call options could offer strong upside. If you expect prices to stay range-bound, selling strangles outside the $74–$81 band could collect premium from the current indecision.
Industrial demand is another factor, and it is not helping the bullish case right now. Global manufacturing PMI data from January 2026 showed a mild contraction. This points to softer industrial use of silver in the near term and supports the idea that $79 remains a tough ceiling.
This consolidation looks similar to the choppy trading seen through much of 2025, before the Fed clarified its policy stance. These quiet periods ahead of major data often end with sharp moves. That is why defined-risk options strategies may be more attractive than holding outright futures. The key is to be ready for volatility once the inflation numbers are released.
Ahead of CPI, the US dollar strengthens after robust payrolls, outperforming the Australian dollar and Norwegian krone
The US Dollar ended the week higher after a stronger-than-expected nonfarm payrolls report. It gained the most against the Australian Dollar and the Norwegian Krone.
Attention then shifted to the January US Consumer Price Index (CPI) report. After the payrolls release, the Dollar did not build on its early gains.
Fed Policy And Inflation Outlook
The report said January CPI could shape market expectations for the Federal Reserve’s next move. It noted that a softer CPI reading could signal that core inflation is still easing. The article also listed reasons the Fed could still cut rates later this year. These included stronger productivity growth, smaller pass-through from earlier tariff hikes, and slower wage growth and inflation. It added that rolling back some tariff increases could lower inflation pressure. That, in turn, could give the Fed more room to cut rates, which would likely weigh on the US Dollar. In early 2025, the Dollar strengthened on a solid labor market, even as markets expected Fed rate cuts. The main view was that falling inflation would weaken the Dollar over the year. That largely played out, as the Fed began cutting rates in the second half of 2025.Derivative Trading And Volatility
Now, as we move through February 2026, the backdrop has changed. Last month’s jobs report showed the labor market remains firm, with 195,000 jobs added versus expectations of 170,000. More importantly, this week’s January CPI report showed core inflation steady at 2.8%, which makes the Fed’s next steps less clear. This points to more upside for the Dollar as markets reduce expectations for further rate cuts this year. Derivatives traders may want to consider short-term positions that benefit from a stronger Dollar. For now, the easiest path for the US Dollar looks higher, unless inflation or labor data weakens clearly. Uncertainty about the Fed’s next move is also pushing implied volatility higher. The CVOL index for major currency pairs has risen from 6.5 to 7.8 over the past month. That makes option strategies such as long straddles or strangles on pairs like EUR/USD more attractive, as they are designed to benefit from large moves in either direction. It may also be wise to hedge against renewed Dollar strength. It also makes sense to focus on the Dollar against currencies backed by more dovish central banks, such as the Australian Dollar. The Reserve Bank of Australia is signaling more willingness to cut rates than the Fed is right now. That makes call options on USD/AUD, or put options on AUD/USD, relevant strategies for the weeks ahead. The disinflationary lift expected from tariff rollbacks in 2025 did not fully arrive, leaving inflation stickier than forecast. That history supports today’s view that the Fed may keep rates unchanged for longer than markets expected late last year. As a result, positioning for a period of continued Dollar strength is a reasonable approach. Create your live VT Markets account and start trading now.Pesole says NOK surged after CPI but may weaken as inflation eases and rate cuts return by summer
The Norwegian krone strengthened after Norway’s CPI jumped in January. The data was released on Tuesday. After the release, markets removed expectations for any Norges Bank rate cut in 2026.
Some called the move premature. Inflation in Norway has been volatile. If inflation falls back toward 3.0% in the coming months, markets may again price in a rate cut by summer.
EUR/NOK was seen as fairly valued in the short term after markets repriced Norwegian rate expectations in a more hawkish direction. Under this view, the krone would likely need a more dovish shift to lose momentum.
Attractive domestic rates could support the krone if overall risk sentiment stabilizes. In the near term, NOK was preferred over SEK.
The article says it was produced using an Artificial Intelligence tool and reviewed by an editor.
The Norwegian krone surged after Tuesday’s surprise January inflation report. Core CPI rose to 4.2%. This led markets to fully price out any Norges Bank rate cuts for the rest of 2026. EUR/NOK fell toward 11.35.
We think the market reaction is too strong. In 2025, inflation was often volatile: big monthly jumps were followed by softer readings as energy prices normalized. We expect a similar pattern now. Inflation could return toward 3.0% by summer, which would put rate cuts back on the table.
For now, it is hard to fight the krone’s momentum. Norges Bank’s policy rate is still a strong 4.5%, giving NOK a clear yield advantage. Unless we get a dovish trigger—such as a much weaker inflation print next month—the krone should stay supported. That is even more likely if global equities stabilize after this week’s dip.
Derivative traders could consider selling short-dated EUR/NOK calls to collect premium while the krone is strong. If you expect a reversal in summer, you could buy longer-dated EUR/NOK call options with June or July expiry. This aims to benefit from a possible dovish repricing without betting against the near-term trend.
Rabobank expects USD/CAD to stay range-bound into 2026, with USMCA and tariff risks offsetting dollar weakness
Rabobank expects USD/CAD to trade sideways through 2026. It says US–Canada trade tensions and risks around the USMCA review will offset a weaker US Dollar. In its view, the pair should stay in a 1.36–1.41 range, with a “tariff premium” weighing on the Canadian Dollar.
Rabobank also expects a narrower US–Canada rate differential to limit US Dollar strength. That should keep USD/CAD range-bound. It gives another range of 1.37–1.40, based on the same offsetting forces.
USD/CAD is described as tracking the US–Canada 2-year rate differential again, and moving inversely to oil. Oil is seen as a key CAD driver mainly when prices move sharply and quickly.
Implied volatility is expected to rise, rather than quickly return to the low-volatility conditions of December 2025. The official USMCA review date is July 1, described as four and a half months away. Uncertainty around US–Canada relations is linked to further volatility.
In the coming weeks, USD/CAD is expected to stay in a tug-of-war, keeping it within a 1.36 to 1.41 range. The risk of trade tariffs is capping the Canadian dollar, but a weaker US dollar is balancing that out. This makes a big breakout in either direction a risky bet for now.
This view is supported by the narrowing interest rate spread between the US and Canada. As of early February 2026, it has tightened to about 20 basis points, down from more than 50 basis points in late 2025. That makes holding US dollars less attractive. However, January’s cross-border trade data showed a 1.2% decline—the first monthly drop in six months—showing rising market anxiety about trade relations.
With more bumps expected (instead of the calm of December 2025), buying volatility may make sense. Implied volatility on 3-month options has already risen to 7.9% from lows of 6.5%, and Rabobank expects it to keep climbing. Strategies like long strangles, which benefit from a large move in either direction, could work well in that environment.
The main upcoming event is the USMCA review on July 1, now just over four months away. In the weeks ahead, traders may want to focus on options that expire after this date to capture potential swings. These longer-dated options will likely get more expensive as the review gets closer.
For those looking to trade the range, selling options near the edges of the 1.36–1.41 band could generate income. That could mean writing out-of-the-money call options with strikes above 1.41. It could also mean selling puts below the 1.36 support level to collect premium, betting that the floor holds.
Deutsche Bank analysts say EUR/USD held steady as the dollar index rose slightly ahead of US CPI data
EUR/USD was mostly unchanged. The Dollar Index edged higher ahead of the January US CPI release. Investors are watching the data closely because it was delayed by the partial government shutdown.
Deutsche Bank economists forecast January headline CPI at +0.26% month on month, down from +0.31% in December. They expect motor fuel prices to fall by 2.4%, which could pull the headline number lower.
They also expect core CPI to be stronger at +0.35% month on month. Markets have shifted their expectations for US rate cuts after a run of weaker US data.
Pricing for the December meeting implied 53bps of cuts, up 5.3bps on the day. The article adds that markets still price in more easing under a new Fed Chair.
With EUR/USD quiet, focus is on the next CPI report and what it means for the Federal Reserve. Markets are pricing roughly 50 basis points of rate cuts by year-end, but confidence is low. A CPI surprise could quickly change that view and trigger a sharp move in the pair.
A similar setup happened in early 2025, when a delayed January CPI report sparked heavy debate. Headline inflation was weak because energy prices fell, but core inflation was much stronger. That mixed message made the Fed outlook unclear. The parallel is a reminder to look past the headline figure and study the details.
This uncertainty suggests implied volatility in near-term EUR/USD options may be too low. Buying volatility with structures like straddles could make sense, since they can profit from a big move in either direction. Tight ranges often break, and CPI is the most likely trigger.
Recent data from late 2025 and early 2026 supports this view. GDP growth slowed to 1.5% in Q4 2025, but January payrolls still rose by 180,000. With signals pointing both ways, the Fed remains data-dependent, and markets remain unsure.
For traders with a directional view, option spreads offer defined risk. If core CPI is stronger than expected, a bear put spread could benefit from a stronger dollar as rate-cut expectations move out. If inflation is softer than expected, the dollar would likely weaken, making a bull call spread more attractive.
Markets await US inflation data as sterling slips for a fourth session, hovering near 1.3600 after peaking at 1.3700
The Pound fell for a fourth straight day against the US Dollar. It traded near 1.3600 on Friday after pulling back from weekly highs above 1.3700. A risk-off mood supported the Dollar. Trading was quiet ahead of the US Consumer Price Index (CPI) release.
US headline inflation is expected to rise 0.3% in January. The annual rate is forecast to ease to 2.5% from 2.7% in December. Core CPI is expected to slow to 2.5% year on year from 2.6%.
Inflation Outlook And Fed Expectations
If US inflation falls more than expected, markets may price in sooner Federal Reserve rate cuts. That could weaken the US Dollar. In the UK, GDP data released on Thursday added pressure to the Pound. Q4 GDP rose 0.1% quarter on quarter and 1% year on year. Both were below forecasts of 0.2% and 1.2%. Other figures pointed to a steep drop in manufacturing in December and flat services output. Together, they raised expectations of more Bank of England action to support growth. Looking back to early 2025, the mood then helped set the stage for the Pound’s later decline. Worries about weak UK GDP proved justified. They were followed by a series of Bank of England rate cuts later that year to boost the economy. This policy gap has been a key driver of the currency’s direction since then.Market Focus And Derivatives Positioning
Today, with GBP/USD near 1.2450, markets remain focused on central bank policy. The UK’s latest Q4 2025 GDP showed growth of just 0.2%. January inflation also stayed high at 2.4%. This limits the Bank of England’s room to change course. In contrast, the US Federal Reserve has been more cautious, leaving the Dollar with a clear interest-rate advantage. For derivatives traders, this points to higher volatility ahead of next week’s US CPI data. One-month implied volatility for GBP/USD has risen to 8.5% from 6.0% three months ago. That suggests traders expect a sizable move. If US inflation prints above forecasts, it could push Fed rate-cut expectations further out and add more pressure on the Pound. With uncertainty high, options may look more appealing than holding spot positions. Traders who expect more Sterling weakness could buy GBP/USD puts. This can profit from a drop while limiting risk to the premium paid. It gives downside exposure without open-ended losses. On the other hand, traders who think the Pound is oversold can use the higher volatility by selling cash-secured puts at a lower strike. This allows them to collect a larger premium. If the Pound falls, they buy the currency at a level they already consider attractive. A similar pattern played out after the 2016 Brexit vote, when policy differences drove a long-term trend. Create your live VT Markets account and start trading now.Commerzbank says OPEC, EIA and IEA disagree on 2026 oil balances and warns oversupply risks persist
We face a sharply divided outlook for the oil market in 2026. Major agencies still cannot agree on whether the market will be balanced or in a large surplus. This uncertainty is keeping Brent crude steady near $67.6 per barrel. For derivatives traders, this split in forecasts can create clear opportunities in the weeks ahead.
Geopolitics is still a key support for prices and helps justify a risk premium. Reports from early February say US-Iran talks have stalled. The US Treasury has also widened sanctions on groups believed to be moving Iranian oil. With roughly 1.5 million barrels per day of Iranian supply still at risk, prices have held up even as some forecasts turn bearish.
