Malaysia’s labour market improved in 4Q25. The unemployment rate fell to 2.9% from 3.0% in 3Q25, while the participation rate stayed at 70.9%. The 2.9% unemployment rate was the first time it fell below 3.0% since 4Q14. This points to stronger labour conditions at the end of 2025. For 2026, unemployment is forecast to stay at 2.9%, which is still below 3.0%. The 2025 unemployment rate is also reported at 2.9%. Factors that may support employment in 2026 include domestic growth, job measures in Budget 2026, ongoing national initiatives, tourism, and AI-related demand. The article says it was produced with help from an AI tool and reviewed by an editor. Given the strong labour market in late 2025, the outlook for the ringgit looks stable. Unemployment fell to 2.9%, the lowest level in more than a decade, and this is expected to continue through 2026. This steady backdrop suggests less currency volatility in the near term. Recent data supports this view. January 2026 inflation was slightly higher than expected at 3.1%, driven by firm domestic demand. The latest trade data also showed a 15% year-on-year rise in semiconductor exports, which supports the idea that the AI upcycle is real and ongoing. Together, these signals point to a solid economy that can support the currency. For currency traders, this mix of stability and strength suggests a cautious, positive bias on the ringgit. Low-volatility strategies, such as selling out-of-the-money USD/MYR call options, may be worth considering in the coming weeks. Strong fundamentals reduce the risk of a sharp ringgit drop against the US dollar. This backdrop also matters for interest rates. A rate cut by Bank Negara Malaysia looks unlikely. The central bank kept its policy rate at 3.25% at its late-January meeting. With a tight labour market, the next move is more likely to be a hold, or possibly a hike. Traders may want to avoid positions that rely on near-term rate cuts. In late 2014, the last time unemployment was this low, growth depended heavily on commodity prices, which later fell sharply. Today’s picture looks more balanced. Growth is supported by a wider set of drivers, including national initiatives and a strong tourism rebound. This broader base suggests the current strength may be more resilient than it was a decade ago.

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China’s broad fiscal deficit was 8.1% of GDP in 2025. That was 0.9 percentage points below the approved target, but higher than the 7.2% recorded in 2024. In 2025, spending missed the target by more than revenue did. As a result, some budgeted funds were not used and can be carried into 2026.

Deficit Outlook For 2026

In 2026, the broad deficit is forecast to rise to 8.5% of GDP. Part of this gap is expected to be covered by unused funds from 2025. The official deficit ratio for 2026 is expected to be 3.8% of GDP, down from 4.0% in 2025. This shift is linked to a lower expected growth target. Fiscal support in 2026 is likely to focus on major Five-Year Plan projects and boosting consumption. The gap between revenue and spending is expected to be wider than the official deficit. China looks set to keep a supportive fiscal stance through 2026. The government underspent in 2025, leaving funds available to use this year. That creates room for a positive fiscal impulse to support growth.

Market Implications And Trade Ideas

We forecast a broad budget deficit of 8.5% of GDP for 2026, slightly above the 8.1% posted in 2025. The official target announced in March may be a bit lower. Even so, the main point is that China still has room to increase spending. This supports assets linked to Chinese growth in the weeks ahead. With spending likely to lean toward consumption, call options on large-cap Chinese equity ETFs may look attractive. Retail sales showed signs of stabilizing in late 2025, and continued fiscal support should help consumer-facing firms. Positioning for a broader market move higher ahead of March policy announcements could be a workable strategy. The focus on Five-Year Plan projects should also support industrial commodities. Copper has already firmed above $8,700 per tonne on the LME this month, driven by renewed demand expectations. Traders could consider long copper futures or bull call spreads to position for stronger infrastructure and manufacturing investment. Recent data also supports this constructive view. China’s Caixin Manufacturing PMI for January 2026 came in at 50.9, which signals expansion. This suggests the industrial sector is already growing, even before this year’s fiscal measures fully take effect, and may be able to absorb additional stimulus. If growth responds more strongly than expected, the yuan could also benefit. Stronger activity and sentiment could support an appreciation versus the dollar. Options that profit from a lower USD/CNH exchange rate offer another way to express this view. Create your live VT Markets account and start trading now.

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EUR/USD slipped below 1.1900 on Wednesday as the US dollar rebounded after the US Nonfarm Payrolls report. The pair traded at 1.1885, down 0.07%, after hitting a daily low of 1.1833. US payrolls rose by 130K in January. Private hiring increased by 172K, while government payrolls fell by 42K. The unemployment rate dropped to 4.3%, below the Fed’s 2026 estimate of 4.5%.

Labor Market Revisions And Rate Expectations

Annual revisions showed earlier job gains were overstated. The March 2025 level was revised down by 898K, and estimated 2025 job growth was cut to 181K from 584K. Rate expectations shifted after the report. Market pricing now implies about a 95% chance of no March cut, based on Prime Market Terminal data. CBOT data showed money markets pricing nearly 51 basis points of easing by year-end. Kansas City Fed President Jeffrey Schmid said inflation remains too high and warned that more cuts could keep inflation elevated for longer. In Europe, there were no major releases. ECB officials said inflation is under control, and added that the euro’s strength has already been factored in. Next, the Eurozone calendar includes speeches from Mario Cipollone, Philip Lane, and Joachim Nagel. The US schedule includes jobless claims for the week ending 7 February, housing data, and speeches from Lorie Logan and Stephen Miran.

Trading Focus And Key Levels

Markets are focused on the stronger headline jobs number and the Fed’s firm stance. Together, these have pushed expected rate cuts further out. Bets on a March 2025 cut have almost disappeared, with futures pricing only a 5% chance. This reaction makes sense. January inflation data showed core prices still above 3%, giving policymakers little reason to ease. Still, the large downward revision to past job growth is hard to ignore. Nearly 900,000 previously reported jobs from 2024 were removed. In early 2024, a similar (but smaller) revision of more than 300,000 jobs pointed to cooling that markets initially missed. This suggests the labor market may be weaker than the latest headline number indicates. The gap between strong current data and weaker historical revisions adds uncertainty. For derivatives traders, that can create opportunity. Buying EUR/USD volatility could be attractive in the coming weeks. Options markets may not fully reflect the risk that investors have overestimated the economy’s true strength, which could lead to larger price swings. For direction, we lean toward a weaker dollar once the market focus shifts from one jobs report to the broader trend. A sustained move above resistance at 1.1916 could trigger long positions, with 1.2000 as the next key target. Upcoming Initial Jobless Claims will matter. A reading above the recent average near 220,000 could speed up this repricing. On the downside, a break below trend-line support near 1.1818 would weaken this view for now. It would suggest markets are still committed to the hawkish Fed narrative, despite signs of softening. In that case, we would reassess and look for support closer to 1.1750. Create your live VT Markets account and start trading now.

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Singapore’s 4Q25 GDP growth was revised up to 6.9% year on year and 2.1% quarter on quarter (seasonally adjusted). This is higher than the advance estimates of 5.7% year on year and 1.9% quarter on quarter. The upgrade was driven by stronger manufacturing output, and better results in services and construction. Full-year 2025 growth was also revised higher, to 5.0% from 4.8%. This points to a stronger growth backdrop heading into 2026.

Growth Outlook And Key Drivers

The Ministry of Trade and Industry raised its 2026 GDP growth forecast range to 2.0% to 4.0%, from 1.0% to 3.0% previously. The research note links this better outlook to continued AI-related activity and updates to the government’s medium-term growth assumptions. With the government now forecasting 2026 growth of “2.0 to 4.0 per cent,” we should position for continued bullish momentum in Singapore-linked assets. The stronger-than-expected growth at the end of 2025, led by the AI sector, supports this view. This revision is an important signal for our strategies in the weeks ahead. We see an opportunity to increase long exposure through Straits Times Index (STI) futures, as corporate earnings often follow stronger economic growth. Recent data supports this: the January 2026 manufacturing PMI stayed in expansion at 50.8. We can also buy call options on the STI, targeting a move toward the 3,500 level by the end of the quarter. The strong 2025 GDP results, including 5.0% full-year growth, should also support the Singapore dollar. Core inflation in January 2026 edged up to 3.1%, giving the Monetary Authority of Singapore little reason to ease its gradual currency appreciation policy. We should consider buying SGD against USD using futures or options.

Volatility Positioning And Premium Strategies

This clearer and more positive economic picture may reduce market volatility, as uncertainty fades. In past periods of steady growth, such as 2017 and 2018, implied volatility on STI options often declined for months. As a result, selling out-of-the-money puts on major Singapore blue-chip stocks or index ETFs could be a sensible way to collect premium. Create your live VT Markets account and start trading now.

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The S&P 500 rallied into overhead resistance at 7,000–7,020 yesterday, and traders took profits on swing longs in that zone. In today’s premarket, the focus shifted to quick intraday setups, including a short Nasdaq trade. The trade worked, but it required fast execution and real-time updates through email and premium Telegram channels.

Market Rejects Key Resistance

The main catalyst was a strong jobs report. This highlights why daily views may need rapid updates as market conditions get tougher than in earlier periods, including the prior downside moves in gold and silver. 2026-02-12T02:02:31.590Z The market is clearly rejecting the S&P 500’s 7,000 resistance level, directly in response to the stronger-than-expected jobs data. The economy added 315,000 jobs last month, well above the 190,000 forecast. That makes near-term rate cuts look less likely. As the market reprices this shift, volatility is likely to rise. For derivatives traders, this calls for moving away from a simple long-only mindset and toward flexible, two-way positioning. One way to trade the reversal is to buy short-dated puts on the Nasdaq 100 (QQQ), since tech stocks tend to be most sensitive to changing rate expectations. Another idea is to sell call spreads just above 7,020 on the S&P 500 to take advantage of the resistance ceiling.

Focus On Range Based Trading

This setup resembles the choppy market we saw in summer 2025, when strong economic data repeatedly tested the uptrend. Traders who stayed flexible—and didn’t fight the Fed’s “higher for longer” message—were the ones who did best. This is a period that favors active management over passive index holding. The stronger US dollar, now back above 105 on the DXY index, is pressuring commodities as expected. Gold’s drop below $2,850 an ounce is a key signal of that stress. A related derivatives approach is buying puts on major gold miner ETFs, which often fall faster than the underlying metal. As a result, the focus for the coming weeks is on defining a trading range rather than betting on an immediate breakout. Volatility, measured by the VIX, has moved off the lows and jumped back above 16 for the first time this year. This environment tends to suit strategies that benefit from swings inside a range, rather than a steady move higher. Create your live VT Markets account and start trading now.

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The Wall Street Journal reported that the Pentagon is preparing a second US aircraft carrier in case it needs to deploy to the Middle East. The USS Abraham Lincoln is already in the region, and officials said an order for a second carrier could come within hours. On Tuesday, US President Donald Trump said he was considering sending a second carrier to increase pressure on Tehran during nuclear talks. Officials quoted in the report said no formal order had been issued, and plans could still change.

Carrier Deployment And Nuclear Talks

Trump wrote on Truth Social that he met with Israel’s Prime Minister Benjamin Netanyahu, but said there was no final outcome. He said he pushed to keep talks with Iran going to see if a deal can still be reached. Trump also mentioned a past strike called “Midnight Hammer” and warned Iran to act more “reasonable and responsible.” The report connected the carrier discussion to rising tensions in the Middle East. The article also defined the market terms “risk-on” and “risk-off.” It said “risk-on” often boosts stocks, most commodities (except gold), commodity-linked currencies, and cryptocurrencies. “Risk-off” usually supports bonds, gold, and safe-haven currencies such as the US Dollar, Japanese Yen, and Swiss Franc. We remember that in early 2025, reports of possible US military escalation against Iran drove major market anxiety. Talk of deploying a second aircraft carrier, along with tough language on nuclear negotiations, pointed to a serious geopolitical risk. News like this often triggers a “risk-off” mood among investors.

How Traders Position For Risk Off

This means traders should be ready for a flight to safety if similar headlines return in the coming weeks. In a risk-off environment, investors focus more on avoiding losses than chasing gains. They often sell riskier assets like stocks and shift into safer ones. In 2025, the data showed how quickly markets can move. West Texas Intermediate crude oil jumped more than 10% in two weeks and briefly rose above $90 per barrel on fears of supply disruptions. At the same time, the CBOE Volatility Index (VIX)—often called the market’s “fear gauge”—rose by nearly 40%, showing broad uncertainty. These are the kinds of sharp moves traders should expect. For derivatives traders, this may point to call options on safe-haven currencies. The Japanese Yen and Swiss Franc often attract capital during periods of global stress. Trades can be structured to benefit if the JPY/USD or CHF/USD pairs strengthen. Gold is another key asset to watch because it is a classic safe haven. Long exposure through gold futures or options may make sense, since gold often rises when geopolitical tensions increase. Historically, Middle East events have often been strong drivers for the metal. On the other side, traders should be careful with currencies tied closely to global growth, such as the Australian Dollar. A conflict could disrupt trade and reduce commodity demand, which may create an opportunity to use put options on the AUD. This approach aims to profit if investors move away from assets linked to economic growth. Create your live VT Markets account and start trading now.

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The NASDAQ100 has moved sideways for the last three to four months and is trading near its early October 2025 level. That makes Elliott Wave (EW) analysis less reliable, so we also use other indicators in a “weight of the evidence” approach. In mid-term election years, the average seasonal pattern shows a bottom on 5 February, a peak around 15 February, a mild dip near 21 February, then a rise to an 18 March high. After that, the average path trends lower until October. The NASDAQ100 bottomed on 6 February and then started a rally.

Seasonal Pattern And Near Term Context

The updated EW count still points to 26608. This comes from a 161.8% extension of the 2020–2021 Wave-1, measured from the 2020 low (Wave-2). The prior peak on 29 October was about 500 points below that extension. Wave-1 rose from 6772 to 16765 (9993 points). Wave-2 bottomed on 13 October 2022 at 10440. The Wave-3 target is 10440 + 9992 × 1.618 = 26608. Bear warning levels are 24854, 25112, 25418, 25840, and 26182. Because the NASDAQ100 has been range-bound for months, it has made little progress. It is still near levels first seen in early October 2025. With no clear trend, forecasting is harder, so we rely on multiple tools to build a clearer view. This kind of “stuck” market often leads to a larger, more decisive move. So far, price action has tracked the typical mid-term election year seasonal pattern well. That template called for a bottom around February 5. We saw the year’s low on February 6. The same model suggests the current rally may peak around February 15. The rally has also been helped by recent economic data. Core inflation (PCE) eased to 2.7%, slightly below expectations. That gave the market support in the short term and fits the seasonal setup. In similar cases, like the market response to inflation data in late 2024, good news often helped drive a final push higher before a broader turn.

Positioning And Levels To Watch

For derivatives traders, this points to a very short-term bullish bias over the next few days. Traders could consider short-dated call options or bull call spreads to target a final move higher into the February 15–21 window. The key point is that this move likely marks the end of a rally phase, not the start of a lasting uptrend. The bigger opportunity may come next. The seasonal pattern points to a more meaningful decline after a final high around March 18. That also fits the broader Elliott Wave view, which expects a multi-month correction once this rally completes. This decline could run into October. Traders may want to get ready to shift to a bearish strategy in the coming weeks. That could include buying puts with April or May expirations to target the start of the expected downturn. Bear put spreads can also help position for a sustained move lower while limiting risk. On the upside, the key levels are the bear warning zones: 24854 up to 26182. As price moves into these areas, it may make sense to cut bullish exposure and begin building bearish positions. How the market behaves at these levels can offer important clues about when a reversal may begin. Create your live VT Markets account and start trading now.

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The US January Nonfarm Payrolls report showed a gain of 130K jobs. The Unemployment Rate fell to 4.3%. Average Hourly Earnings were unchanged at 3.7% over the past 12 months. The US Dollar Index (DXY) traded near 96.80 and was slightly lower on the day. USD/JPY was near 152.80 and slipped toward a two-week low after Prime Minister Sanae Takaichi won an election.

Key Moves Across Major Markets

AUD/USD traded near 0.7130 after hitting a three-year high, following China’s CPI release. EUR/USD was around 1.1880, down from a one-week high. GBP/USD was near 1.3640 ahead of the UK flash GDP report for Q4. Gold traded near $5,092 and edged higher. Next up: UK flash GDP (Q4) on Thursday 12. On Friday 13, markets will watch RBNZ Inflation Expectations (Q1), Swiss January CPI, Eurozone flash GDP (Q4), and US January CPI. Central banks were the biggest gold buyers in 2022, adding 1,136 tonnes worth about $70 billion, according to the World Gold Council. Gold often moves in the opposite direction to the US Dollar and US Treasury yields. Its price can also react to interest rates and geopolitical risk. A year ago (February 2025), the market would not buy the US Dollar even after a solid jobs report. Traders expected the Federal Reserve to turn dovish later in the year. Today the setup looks very different: the January 2026 jobs report showed a huge gain of 353,000 jobs and sticky wage growth of 4.5%. That forced traders to price out near-term rate cuts and pushed the Dollar Index up to around 104.00. Gold’s behavior has also changed. A year ago it was rising toward an unusual $5,092 level, ignoring economic data and trading mainly as a safe haven. Now, with the US Dollar and Treasury yields firm, gold is under pressure and trading in a more typical range near $2,030. Because of this, options strategies that bet against a big upside breakout—such as selling out-of-the-money calls—may work as long as the Fed stays credibly hawkish.

Trading Implications And Event Risk

In early 2025, the Australian Dollar was near multi-year highs around 0.7130, supported by strong data from China. Today, AUD/USD is struggling near 0.6530, weighed down by a strong US Dollar and weaker conditions in China. This suggests that any near-term strength in the Aussie could be a chance to look for bearish entries. Last year’s gap between strong data and weak Dollar demand is a reminder that expectations matter. With US CPI due this Friday, volatility could rise sharply. Given how sensitive the market is to inflation, buying options such as straddles on major pairs like EUR/USD can be a practical way to trade the event, since it can profit from a large move in either direction. Create your live VT Markets account and start trading now.

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US Treasury yields rose across the curve on Wednesday. The 10-year note climbed nearly 1.5 basis points to 4.155%, after a stronger US jobs report lowered expectations for Fed rate cuts. The 10-year yield bounced back from around 4.125% after the BLS reported that January nonfarm payrolls increased by 130K, above the 70K forecast. The unemployment rate fell to 4.3% from 4.4%, below the Fed’s 4.5% full-year estimate.

Jobs Data Reshapes Rate Cut Outlook

Markets no longer expected a March rate cut. They priced in 27 basis points of easing through July 2026. For 2026, markets priced two cuts, with the first expected in July. Kansas City Fed President Jeffrey Schmid said rate cuts could allow inflation to stay higher for longer. He said policy should stay restrictive if inflation is near 3%. The US Dollar Index fell 0.14% to 96.75. Five-year breakeven inflation eased to 2.47% from 2.5%, and the 10-year measure slipped to 2.32% from 2.35%. Initial Jobless Claims and Fed speeches are due on Thursday. On Friday, January CPI is expected to cool. Headline and core inflation are forecast to fall year on year, from 2.7% and 2.6% to 2.5%.

Trading Setup Around CPI And Volatility

After the strong January jobs report, the Fed has a clear reason to delay rate cuts. The market now prices the first cut for July 2026. That is a big change from a few weeks ago, when a spring cut still looked possible. This “higher for longer” backdrop suggests ongoing stress in short-term rate markets. Attention now turns to the Consumer Price Index (CPI) report, which could drive sharp moves. Volatility trades may fit this setup. For example, options strategies like straddles on rate-sensitive ETFs such as TLT can benefit from a large move in either direction. With a strong labor market but falling inflation expectations, the market looks uncertain. This CPI print could force a clearer trend. Recent history also argues for caution. Inflation stayed sticky through much of 2025, even after earlier aggressive rate hikes. The Fed kept rates steady for most of last year, disappointing traders who expected an early pivot. That experience shows the risk of betting too early on rate cuts, since strong data can quickly change market pricing. Newer data supports a more hawkish Fed view. The CME FedWatch Tool now shows the probability of a July rate cut falling from above 70% last month to about 52% after the jobs report. In addition, last week’s ISM Services PMI came in strong at 53.8, showing continued expansion in the largest part of the economy. This backdrop may favor a flatter yield curve. Short-term rates may stay firm, while longer-term yields could drift lower on disinflation hopes. Traders could use SOFR futures to position for a narrower 2-year/10-year spread in the weeks ahead. With the VIX near 13.5, VIX calls are relatively cheap and can hedge against an equity decline if inflation prints hotter than expected. Create your live VT Markets account and start trading now.

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The U.S. 10-year Treasury note auction yield rose to 4.177%, up from 4.173% at the previous auction. That is an increase of 0.004 percentage points versus the prior auction.

Inflation Fears Persist

We see this small rise in the 10-year auction yield as a sign that inflation concerns remain. The January 2026 CPI reading of 3.1% has clearly made markets more cautious about the Federal Reserve’s next steps. This auction result suggests bond investors want a higher premium to compensate for that uncertainty. This backdrop argues for preparing for higher volatility in the coming weeks. Implied volatility for interest rate swaptions has already moved higher, and we expect the VIX to rise from its current level of 18.5. We are considering VIX call spreads, or straddles on major bond ETFs, to take advantage of the expected increase in market swings. For traders who use interest rate derivatives directly, it may be time to consider paying fixed on swaps. This positions for a scenario where short-term rates stay higher for longer, or move higher. Shorting Treasury futures—especially in the 2- to 5-year part of the curve—also looks appealing as a hedge if the Fed turns more hawkish. In equity options, higher yields can pressure growth stocks. We are increasing protective put positions on technology and consumer discretionary benchmarks such as the Nasdaq 100. At the same time, we are looking at call options on financials, since banks may benefit if the yield curve steepens. In context, this marks a shift away from the disinflation trend that helped push yields lower through much of 2025. That calmer period now appears to be ending as markets price in a more complex economic outlook. We believe the straightforward trades from last year are largely gone, and a more defensive, tactical approach is now needed.

Defensive Positioning Ahead

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