USD/CHF traded near 0.7720 on Wednesday and stayed in a daily downtrend. The pair remained below the 50-day EMA at 0.7868 and the 200-day EMA at 0.8120. It bounced from 0.7605 in late January, then fell from a January swing high near 0.8040. US January NFP rose by 130K, beating the 70K consensus and December’s revised 48K. However, BLS benchmark revisions cut total 2025 nonfarm employment by 898K and lowered average monthly job growth from 49K to 15K. Unemployment slipped to 4.3% from 4.4%, and hourly earnings rose 0.4% month-on-month versus a 0.3% forecast.

Fed Cut Timing Shifts

This data pushed expected Fed rate cuts from spring toward July. On lower timeframes, the Stochastic Oscillator (14,5,5) rose from oversold levels, but USD/CHF stayed below 0.7750. A break above 0.7800 would bring the 0.7868 EMA into focus. If price drops below 0.7650, attention shifts back to 0.7605 and then 0.7500. A speech by Fed Governor Schmid had a hawkish 7.0 rating, and Governor Bowman is due to speak later. The US dollar jumped briefly after the January jobs report showed a headline gain of 130,000, far above expectations. Even so, this strength in USD/CHF likely reflects a short-term reaction. We view it as a chance to sell into the existing downtrend. The more important development is the revised job data for 2025, which suggests the US economy was much weaker than previously reported. Average monthly job growth in 2025 was only 15,000, down sharply from the earlier estimate of 49,000. This weakness suggests the dollar’s strength may fade. Although markets have pushed expectations for a Fed rate cut from spring to July, softer fundamentals make it harder for the Fed to stay hawkish. The CME FedWatch Tool now shows a 65% chance of a rate cut by the July meeting. We expect this probability to rise as markets absorb the weak 2025 employment revisions.

Swiss Franc Policy Divergence

Meanwhile, the Swiss economy looks steady. Recent data shows inflation at 1.7%, well within the Swiss National Bank’s target range. This gives the SNB little reason to cut rates, creating a policy gap that supports a stronger Swiss franc. The franc’s safe-haven appeal could also attract inflows if US slowdown fears grow. Over the next few weeks, it may make sense to use any temporary USD/CHF strength to build bearish exposure. One approach is to sell call options with a strike near 0.7800, which reflects a view that rallies will stall below key resistance. This strategy can profit if the pair falls or trades sideways. On the downside, a break below 0.7650 support would raise the odds of a retest of the year’s low near 0.7605. Buying put options with a 0.7650 strike could be a way to position for a renewed downtrend. In the past, large downward revisions to US labor data—like those seen in 2019—have often been followed by dollar underperformance over the next two quarters. Create your live VT Markets account and start trading now.

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Russia’s unemployment rate rose to 2.2% in December, up from 2.1% the month before. That is an increase of 0.1 percentage points from the prior reading.

Early Signs Of Labor Market Cooling

December 2025 data shows Russia’s unemployment rate edged up to 2.2%. This is still very low by historical standards. However, the move up from 2.1% is an early sign that the very tight labor market may be starting to cool. It also suggests we should watch closely for more signs of slower growth. This matters more when we look at the January 2026 inflation data released last week. Inflation eased to 5.8% year over year. That is the second month in a row of mild disinflation, which supports the view that domestic demand may be softening. Traders should keep in mind that the story of nonstop economic tightening may be changing. The Central Bank of Russia kept its key rate at 16% at its late-January meeting, but its message was less aggressive than in past quarters. With the latest labor and inflation numbers, the bank could adjust its guidance in the months ahead. That would make interest rate futures more sensitive to any additional signs of weakness.

Implications For Ruble And Risk Assets

For FX traders, this may point to renewed pressure on the ruble. USD/RUB has been testing the 100 level, and this data gives a fundamental reason for a break higher. One way to position for ruble depreciation is to consider short-dated call options on USD/RUB. This backdrop also argues for more caution on Russian equities. A slower economy can weigh on earnings, which could leave the MOEX Russia Index exposed to a pullback. Out-of-the-money put options on the index can be a relatively low-cost way to hedge, or to express a bearish view, for Q1 2026. Create your live VT Markets account and start trading now.

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Cheaper imports and a stronger Brazilian Real helped reduce goods inflation in 2025. Because of this, the central bank (BCB) signaled it could start cutting rates from March. But goods disinflation could slow if the BRL stops strengthening and if exporters like China have less room to cut prices further. Services inflation has stayed near 5–6% and represents 37% of the IPCA basket. Even if goods inflation drops to 0% year on year from 1.7% at the start of 2026, core inflation could still stay above 3.5% unless services inflation also falls. Headline inflation is expected to remain above 4%, even if petrol prices decline and food inflation stays subdued. In past cycles, sharp falls in goods inflation helped bring down high inflation, but often did not keep inflation at target. With policy still tight, the BCB has room to begin cutting rates in March. Markets are pricing in more than 250bps of cuts for 2026, but the pace could be slower unless services inflation cools more clearly. There is a growing gap between the market’s expectation of aggressive rate cuts and Brazil’s inflation reality. While the central bank may start easing in March, sticky services inflation is a key obstacle. This persistence suggests rate cuts may be much smaller than what current pricing implies. The latest IPCA-15 data confirms services inflation is still high, around 5.8%, supported by a tight labor market. Unemployment recently fell to 7.5%, the lowest since late 2015. That keeps wage growth firm and pushes up service costs, making it harder for the central bank to justify fast, deep rate cuts. For derivatives traders, this creates potential opportunities in the interest rate swap market. Paying fixed on DI futures swaps could perform well if the central bank delivers fewer cuts than the market’s dovish view of more than 250bp this year. In other words, it is a bet that the forward curve is pricing too many cuts, too quickly. This view also matters for the Brazilian Real. If the easing cycle is less aggressive than expected, Brazil’s interest-rate advantage would likely remain attractive and could support the BRL. Options strategies that benefit from a stable or stronger Real versus the US Dollar may therefore make sense. Brazil has seen a similar pattern before, after the 2015–2016 downturn. Goods inflation fell early and provided temporary relief. But service-sector pressures later returned and forced the central bank to stay tighter than markets hoped. The lesson is that an early win on inflation does not mean the fight is finished.

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USD/CAD ticked higher on Wednesday, trading near 1.3612 after bouncing from intraday lows around 1.3500. The pair rose after reports said the US is privately considering leaving the US-Mexico-Canada Agreement (USMCA), which weighed on the Canadian Dollar. US officials have not confirmed the reports. Trade uncertainty across North America also stayed high.

Usmca Uncertainty Lifts Volatility

US labor data helped the US Dollar recover after recent weakness. Nonfarm Payrolls increased by 130K in January, above expectations near 70K and December’s revised 48K. The Unemployment Rate eased to 4.3% from 4.4%. The Bureau of Labor Statistics said average monthly job growth in 2025 was 15K. Average Hourly Earnings rose 0.4% month-on-month versus a 0.3% forecast, and annual earnings came in at 3.7% year-on-year versus 3.6%. Markets still priced in about two US rate cuts by year-end. Focus now shifts to Friday’s US Consumer Price Index report. Oil prices gave back part of earlier gains after Volodymyr Zelenskyy said Ukraine is ready to meet the US on 17–18 February. Lower crude prices can hurt the Canadian Dollar because Canada is a major oil exporter.

Options Positioning For Event Risk

Strong January jobs data, combined with ongoing USMCA uncertainty, points to higher volatility in USD/CAD. Buying options may help position for a larger-than-expected move in the coming weeks. With several near-term risk events, implied volatility may be priced too low. The biggest risk for the Canadian dollar is the possibility of a US exit from the USMCA. With more than $900 billion a year in two-way trade at stake, any confirmation could push USD/CAD sharply higher. Buying out-of-the-money USD calls could be a lower-cost way to hedge, or potentially profit from, this tail risk. Friday’s US CPI report is the next key catalyst and creates two-way risk for the US dollar. A hotter inflation reading could reduce expectations for Fed cuts and support the dollar. A softer report could do the opposite. This setup makes long straddles or strangles on USD/CAD attractive for capturing a large move in either direction after the release. Even though the January jobs report was strong, it needs to be viewed against the weak hiring trend seen through 2025, when job growth averaged only 15,000 per month. This gap supports the Federal Reserve’s data-dependent approach, which can amplify market reactions to each new release. In early 2024, the VIX often stayed elevated even when data was positive, showing that underlying anxiety can persist and make options protection worthwhile. Oil markets also need close monitoring. Crude is Canada’s largest export, worth more than $120 billion last year. Geopolitical events, including the upcoming Ukraine-related talks, can swing WTI prices and move the loonie regardless of economic data. If talks break down, oil could rise and support the CAD. If a deal looks likely, oil could fall and weigh on the currency. Create your live VT Markets account and start trading now.

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US EIA data showed crude oil stocks rose by 8.53M for the week of 6 February. The expected change was -0.2M. The reported figure was 8.73M above the forecast. This points to a much larger inventory build than the market expected.

Implications For Near Term Oil Prices

The February 6 crude oil inventory report showed a build of 8.53 million barrels. This was a major surprise, since the market expected a small draw. The unexpected surplus suggests the market is oversupplied or that demand is weaker than expected. This is a bearish signal and can push oil prices lower in the near term. Recent trends support this view. US production climbed back above 13.3 million barrels per day in late January, close to record highs. At the same time, recent PMI data from Europe has stayed weak, especially in manufacturing, which can reduce fuel demand. Together, stronger supply and softer demand make this inventory build look less like a one-time event and more like part of a broader pattern. Given this setup, consider strategies that can benefit if prices fall or move sideways. Buying put options on March or April WTI contracts is a direct way to gain downside exposure with defined risk. Another approach is to sell out-of-the-money call spreads to collect premium, based on the view that prices may not rally much from here. It may also help to remember Q1 2025. A series of similar inventory builds contributed to a long dip in WTI prices below $75. That period showed that once inventory data turns sentiment bearish, the pressure can last for weeks until a new bullish catalyst appears. This suggests the current downside pressure could also persist.

Futures Curve And Volatility Implications

This inventory surplus may also change the futures curve. It could push the market into deeper contango, where near-term contracts trade below longer-dated ones. In that case, calendar spread trades—such as selling the front-month contract and buying a later month—may become more attractive. The surprise build may also lift implied volatility, which can make option-selling strategies more appealing. Create your live VT Markets account and start trading now.

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Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, said it makes sense to keep monetary policy restrictive while inflation is near 3%. He said inflation at this level suggests demand is still strong and is growing faster than supply. He warned that more interest rate cuts could let higher inflation last longer. He also said he does not see clear signs that current rates are slowing the economy.

Productivity And Inflation Tradeoffs

Schmid said stronger productivity could support faster growth without pushing inflation higher, but he said the economy is not there yet. He added that recent productivity gains may partly come from workers staying in their jobs longer, not just from technology. He also said there are ways to reduce demand for bank reserves, which could allow the Federal Reserve to run a smaller balance sheet. He said price shocks are “transitory” depending on how the central bank responds, and he stressed that the Fed should stay focused on its 2% inflation target. Inflation remains stubborn. For example, January 2026 Core CPI came in at 2.9%. This strengthens the case for keeping policy restrictive. We think this means further rate cuts could be pushed back, which would challenge current market expectations. It also suggests demand is still running ahead of the supply improvements seen as supply chains recovered through 2025. Recent data also supports the view that interest rates are not strongly restraining the economy. The economy added more than 250,000 jobs in January 2026, showing solid momentum. With the labor market still this strong, it is harder for the central bank to justify easing policy.

Implications For Rates Markets

Derivative traders should consider that markets may be pricing in too many rate cuts for 2026. The CME FedWatch tool shows expectations for three or four cuts this year, which now looks too optimistic. We are considering trades that benefit from fewer cuts, such as selling SOFR futures for the second half of the year. This gap between Fed messaging and market pricing may raise bond market volatility. In the past, this kind of divergence has led to choppy trading, as it did in late 2025 during a similar period of uncertainty. We think buying options tied to interest rate volatility, using instruments that track the MOVE index, could be a sensible way to position for this risk. A “higher for longer” rate backdrop also affects the yield curve and stocks. We expect renewed pressure for the yield curve to flatten, which could make trades on the spread between 2-year and 10-year Treasury futures more attractive. For equities, higher rates can weigh on growth sectors, so protective put options on tech-heavy indices may be worth considering. Create your live VT Markets account and start trading now.

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GBP/USD rose during Wednesday’s North American session but fell back from 1.3712 after the US Nonfarm Payrolls (NFP) report. The pair was near 1.3655, up 0.10%. January payrolls increased by 130K versus a 70K forecast. December was revised down to 48K from 50K. The unemployment rate fell to 4.3% from 4.4%. The University of Michigan survey also showed households are more worried about job prospects.

Fed Pricing Shifts After Jobs Data

The BLS said job gains in the 12 months through March 2025 were lower than previously estimated. After the data, money markets reduced the odds of a Fed cut in June 2026 from 100% to 68%. Markets also priced a 95% chance of no change in March, according to Prime Market Terminal. In the UK, unrest within the Labour Party has increased pressure on Prime Minister Keir Starmer, who rejected calls to resign. The Bank of England’s 5–4 vote to hold rates steady also raised expectations of a rate cut in March. Markets are watching UK GDP on Thursday, with forecasts pointing to slower Q4 growth, and US CPI on Friday. From a technical view, GBP/USD traded around 1.3664. Support sits near the 50-day SMA around 1.3500, while resistance is near 1.3700. This stronger-than-expected US jobs report changes our near-term view of Federal Reserve policy. We saw something similar in early 2024, when a surprise NFP gain of +353K forced markets to delay expected rate cuts. As a result, we are reducing exposure to long GBP/USD positions ahead of Friday’s key US inflation report.

Strategy Ideas Into Key Data

We now see a clear policy gap. The Bank of England is signaling possible rate cuts as soon as March after last week’s close 5–4 hold vote. Political pressure on the Prime Minister adds to pound weakness, as it often increases volatility and weighs on the currency. This widening gap between the Fed and BoE outlooks supports a bearish view on the pound. With major data this week (UK GDP and US CPI), volatility could rise sharply. Buying GBP/USD put options is a direct way to position for a move lower, especially if US inflation is hotter than expected. A daily close below the 50-day moving average near 1.3500 would be our signal to add to these bearish positions. If you are less sure about direction but expect a big move, option straddles or strangles may fit better. These approaches can profit from a large move either way after the data. They focus on benefiting from the volatility spike itself, whether the bigger surprise comes from UK growth or US inflation. Create your live VT Markets account and start trading now.

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USD/JPY traded near 153.30 on Thursday, down 0.70% on the day. The pair rose briefly after the US jobs report, but then fell again as the Japanese Yen strengthened. US Nonfarm Payrolls rose by 130,000 in January versus 70,000 expected, after a downward revision that left December at a 48,000 gain. The unemployment rate eased to 4.3% from 4.4%. The participation rate rose to 62.5%. Average hourly earnings increased 0.4% m/m and held at 3.7% y/y, versus 3.6% expected.

Fed Policy Outlook

The report supports the Fed keeping rates in the 3.50%–3.75% range. CME FedWatch shows markets are almost fully pricing in a pause in March and April. Markets also focused on the revisions. These included an 898,000 reduction to the March 2025 employment level and a cut to total 2025 job growth to 181,000 from 584,000. These changes weakened support for the US Dollar. The Yen strengthened after Prime Minister Sanae Takaichi won Sunday’s election. Markets think this result supports pro-growth policies and allows a gradual shift in BoJ policy. Medium-term tightening expectations are also supporting the Yen. Last week’s headline jobs number now looks misleading. The key takeaway is the large 898,000 downward revision to the 2025 employment level, which suggests a much weaker US economy. This shift may limit how long the Federal Reserve can keep a hawkish tone in the months ahead.

Positioning And Market Implications

This view is reinforced by yesterday morning’s US Consumer Price Index (CPI) report. Core inflation fell to 2.8% year-over-year, below expectations of 3.0%. This supports the idea that the Fed will stay on hold. Fed funds futures now imply a 40% chance of a rate cut by July. With both jobs and inflation showing weaker underlying trends, it is harder to be bullish on the US Dollar. On the other side, the Japanese Yen is gaining momentum after Prime Minister Takaichi’s clear election win. Comments this week from the new Finance Minister, pointing to a desire to “normalize policy,” are adding to speculation that the Bank of Japan could end negative rates as soon as its April meeting. Short JPY positions are being reduced quickly, similar to the sharp yen rally seen in mid-2025. With this policy gap in mind, the bias is for further downside in USD/JPY, with a potential move toward the 150.00 psychological level. Buying March and April put options offers a defined-risk way to express this view. One-month implied volatility has risen to 12.5%, suggesting the market is also preparing for a large move, so putting positions on sooner may be preferable. Create your live VT Markets account and start trading now.

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Chefs’ Warehouse (CHEF) reported Q4 adjusted earnings of **$0.68 per share**, beating the **$0.62** consensus estimate and rising from **$0.55** a year ago. That equals an **earnings surprise of +9.68%**. In the prior quarter, earnings of **$0.50** topped the **$0.43** estimate, a **+16.28%** surprise. Quarterly revenue was **$1.14 billion** for the period ended **December 2025**. That beat forecasts by **4.38%** and increased from **$1.03 billion** a year earlier. Over the past four quarters, the company beat consensus **EPS and revenue** estimates **four times each**. CHEF shares are up about **4.9%** year to date, versus a **1.4%** gain for the S&P 500. Going into the release, the company faced an **unfavorable estimate revision trend** and holds a **Zacks Rank #4 (Sell)**. Consensus estimates call for **$0.30 EPS** on **$1.02 billion** in revenue next quarter, and **$2.22 EPS** on **$4.39 billion** in revenue for the current fiscal year. The **Food – Miscellaneous** industry ranks in the bottom **23%** of more than 250 Zacks industries. Historically, the top 50% of industries have outperformed the bottom 50% by more than **2-to-1**. **Flowers Foods (FLO)** reports on **12 February**, with estimates of **$0.16 EPS** (down **27.3%** year over year) on **$1.23 billion** of revenue (up **10.9%**). We are seeing a positive early reaction to Chefs’ Warehouse beating both earnings and revenue expectations for Q4 2025. The stock is indicated to open higher, adding to its recent outperformance versus the S&P 500. This strong report contrasts with the negative analyst sentiment seen before the release. Implied volatility was elevated into the announcement, with 30-day IV reaching **45%**, well above its 52-week average of **35%**. Now that earnings have been released, some of that premium may fade in a typical post-earnings **IV crush**. In this setup, selling options—such as **covered calls** or **cash-secured puts**—may appeal to investors who expect the stock to stabilize. The bearish sentiment reflects broader industry pressure, as the Food – Miscellaneous sector has been underperforming. Recent National Restaurant Association data showed a **0.5%** drop in traffic for **January 2026**, which may signal softer discretionary spending. Because of this, management’s guidance on the earnings call will be important for clues about demand trends in Q1. The next key watch item is how analysts adjust their estimates over the coming week. Those changes could either support or challenge the current **Sell** rating. One potential options approach is to use short-dated spreads to limit risk while positioning for a slow move higher if estimates rise. On the other hand, if management’s outlook is cautious, **puts** may look more attractive as the market reassesses the company’s strong 2025 performance.

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The Australian dollar traded above 0.71, the highest level since February 2023. Markets priced roughly a 70% chance of another 25 bp Reserve Bank of Australia (RBA) rate hike in May. RBA Deputy Governor Andrew Hauser said inflation is still too high and policymakers are готов to act to bring it down. He also said the central bank should not comment on government spending choices, and that public and private demand should be weighed the same when judging inflation risks.

Rba Signals Inflation Focus

Hauser said the RBA lifted rates in February because global growth was stronger than expected, financial conditions were not as tight as assumed, and private demand rose faster than supply. He added that keeping the economy close to balance may have made Australia more sensitive to demand shocks. As price pressures return, this has renewed concerns about inflation risk. Housing finance data showed first-home-buyer loan commitments rose 6.8% quarter-on-quarter to 31,783 in the December quarter. This was the biggest increase since the same quarter in 2023, and commitments were up 9.1% year-on-year. The value of first-home-buyer loans climbed 15.5% quarter-on-quarter. The average first-home-buyer loan size rose 8.5% to a record $607,624, mainly due to New South Wales. A familiar pattern is starting to return, similar to early 2025. Back then, the RBA surprised markets with a more hawkish tone, which pushed the Aussie dollar higher as inflation stayed persistent. That period also saw a jump in housing loan commitments, showing strong domestic demand.

Markets Reprice Rate Path

This dynamic matters again because January 2026 CPI printed at 3.8%. That is still above the RBA’s target and higher than markets expected. As in the prior year, stubborn inflation is keeping policymakers hawkish even after multiple rate hikes in 2025. Ongoing strength in the domestic economy—especially in services—appears to be continuing to fuel inflation. Markets are adjusting. Overnight index swaps now imply a 45% chance of another RBA hike in March, up from about 20% two weeks ago. This shift suggests some traders who expected rate cuts this year are being forced to rethink. For derivatives traders, that may support the case for long Australian dollar exposure. With this backdrop, buying AUD/USD call options expiring in late March or April could be a sensible way to position for a hawkish RBA surprise. Implied volatility has risen to a three-month high of 9.2%, showing higher uncertainty and the potential for sharper moves. That setting tends to suit option strategies that benefit from both direction and rising volatility. The housing market is also adding to inflation pressure, much like it did in late 2024 and early 2025. January 2026 data showed national home prices up 0.6% month-over-month, holding firm despite higher rates. This resilience suggests household balance sheets remain strong, giving the RBA less reason to pause its inflation fight. This differs from the United States, where inflation has moved more steadily toward the Federal Reserve’s 2% goal. This policy gap—an RBA that stays hawkish while the Fed remains on hold—supports AUD/USD at a fundamental level. One sign is the widening yield spread between Australian and U.S. 2-year government bonds, which has shifted 15 basis points in the Aussie’s favor this month. Create your live VT Markets account and start trading now.

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