Gold holds above $5,000 despite strong US jobs data, rebounding toward $5,070 after dipping to $5,018
Gold traded near $5,070 on Wednesday. It had earlier slipped to $5,018 after strong US jobs data, but it stayed above the key $5,000 level. January Nonfarm Payrolls rose by 130K versus about 70K expected, and December was revised to 48K.
The Unemployment Rate ticked down to 4.3% from 4.4%. Average Hourly Earnings rose 0.4% month-on-month versus 0.3% expected, and held at 3.7% year-on-year versus 3.6% expected.
Sterling recovered against the dollar but was rejected above 1.3700, retreating from weekly highs to around 1.3680
The Pound pulled back from weekly highs above 1.3700 and slipped to around 1.3680 on Wednesday. A softer US Dollar, after weak US data on Tuesday, helped limit the decline. At the same time, UK political uncertainty continued to weigh on Sterling.
Markets remain cautious ahead of the delayed US Nonfarm Payrolls report, due later on Wednesday. Forecasts suggest 70K jobs were added in January, up from 50K in December. Unemployment is expected at 4.4%, while annual wage growth is seen at 3.6%, down from 3.8%.
Technical Picture For Gbp Usd
GBP/USD recovered part of its losses and traded near 1.3680 during European hours. The daily chart shows the pair still moving inside an ascending channel. The 14-day RSI is 55.94, which is above 50. The nine-day EMA is above the 50-day EMA, with the 50-day EMA at 1.3518. The pair also remains above both averages. The Pound has retraced some recent losses against the US Dollar, but it is still struggling to break clearly above 1.2900. The current pause around 1.2850 appears linked to a slightly better UK economic backdrop, which is being offset by the Federal Reserve’s firm stance on interest rates. This looks similar to the uncertainty seen in early 2025, when rate decisions were also unclear. Derivative traders should stay cautious ahead of the US Nonfarm Payrolls release. Recent surveys from major financial news outlets put expectations at around 95,000 net new jobs, with unemployment holding at 3.9%. A weaker-than-expected result could pressure the Dollar and support the Pound.Options Strategy And Key Support
Given this setup, buying near-term GBP/USD call options may be a sensible strategy for the coming weeks. For example, calls with a 1.2950 strike would offer upside exposure if the US jobs data is weaker than expected. This also helps limit downside risk if the Dollar strengthens unexpectedly. The pair is still above its 50-day moving average, now near 1.2780, which suggests the medium-term trend remains positive. This level is similar to the support that held through the second half of 2025, before a strong rally. As long as price stays above it, a bullish bias makes sense. Create your live VT Markets account and start trading now.Despite inflation briefly nearing 1%, Pesole expects the Riksbank to hold rates until 2026, supporting the krona
ING expects the Riksbank to keep interest rates unchanged through 2026, even if inflation dips to around 1%. It ties this view to stronger growth and earlier policy easing, which reduce the need for further cuts.
CPIF inflation is forecast to fall to a low of 1.0% in 3Q26, mainly due to VAT cuts. ING also expects inflation to move back toward 2.0% in 2027.
Market Pricing And Rate Cut Expectations
Softer recent inflation data and a dovish comment from Per Jansson have revived speculation about another cut. Markets are pricing about 15bp of easing by June. ING expects this to be priced out again, which could support the Swedish krona. Even if policy stays steady, Swedish yields below 2% keep the krona near the bottom of the G10 carry range. From 2015 to 2017, EUR-SEK two-year swap spreads were often similar to, or wider than, today’s levels, while EUR/SEK mostly traded between 9.00 and 10.00. ING expects the Riksbank to hold rates throughout 2026. This steady policy stance should support the krona. Sweden’s GDP grew 0.5% in the last quarter of 2025, beating expectations and giving the central bank little reason to cut rates further. That should make traders rethink bets on more easing. Inflation may briefly drop to 1% later this year, but this is largely driven by tax changes and is already on the Riksbank’s radar. More recent data, such as January’s CPIF reading of 1.9%, suggests underlying price pressure remains. This supports Governor Thedéen’s neutral message and implies the bank will look past any short-term weakness.Implications For Sek Positioning
The main near-term opportunity is that markets are still pricing in roughly 15bp of cuts by June, which ING expects will not happen. Derivatives traders may want to position for this pricing to unwind. If it does, short-term Swedish rates should rise and the SEK may strengthen. One way to express this view is through options that benefit from a lower EUR/SEK or USD/SEK over the coming months. The krona’s sub-2% yield makes it less appealing for simple carry trades, but that may not matter much. In 2015–2017, rate gaps were similar, yet EUR/SEK traded much lower, often between 9.00 and 10.00. This suggests a stable policy outlook can support SEK gains even when yields are low. Create your live VT Markets account and start trading now.After upbeat US employment data, EUR/USD briefly weakened as lower expectations for Fed rate cuts supported the dollar
EUR/USD slipped after a stronger US jobs report boosted the US Dollar. The pair traded near 1.1875 after falling about 68 pips to an intraday low around 1.1833.
US Nonfarm Payrolls rose by 130K in January. That was above forecasts near 70K and higher than December’s revised 48K. The Unemployment Rate edged down to 4.3% from 4.4%.
Jobs Revisions Reshape The Outlook
The BLS revised March 2025 total nonfarm employment down by 898K. It also cut total 2025 job growth to 181K from 584K. That puts average monthly job growth in 2025 at 15K. Average Hourly Earnings rose 0.4% month-on-month in January. That was up from 0.1% and above the 0.3% forecast. Annual wage growth held at 3.7% year-on-year, above the 3.6% estimate. Interest-rate futures now nearly fully price the Fed policy rate to stay in the 3.50%–3.75% range at the March and April meetings, according to CME FedWatch. The US Dollar Index traded near 96.95 after an intraday low around 96.49. The strong January jobs number is hard to square with the large downward revisions for 2025. The revisions suggest the economy was much weaker than previously thought, which muddies the outlook for the dollar. Over the next few weeks, EUR/USD may be tugged between strong recent data and a weaker underlying trend.Rate Expectations Support The Dollar
Wage growth is still running at 3.7%, and last month’s CPI report showed core inflation remains sticky at 3.9%. That means the Federal Reserve has little reason to cut rates soon. Markets now expect a hold in March and April, which should help support the US dollar in the near term. As a result, aggressive bets against the dollar may be risky right now. The European Central Bank faces a different backdrop. The Eurozone’s January flash inflation estimate cooled to 2.8%. That could allow the ECB to cut rates before the Fed. This policy gap may pressure the euro and limit meaningful upside in EUR/USD. Mixed signals are also lifting options costs. One-month implied volatility for EUR/USD has pushed above 7.0%, showing traders are preparing for a larger-than-usual move. In this setting, buying volatility with strategies like straddles can make sense, since it can profit from a breakout in either direction. For traders who expect the pair to stay stuck in a range, selling volatility may be the better fit. With strong technical levels in place, a range strategy such as an iron condor on EUR/USD options could be a sensible approach. This would benefit if EUR/USD stays choppy while the market digests the major revisions to last year’s data. Create your live VT Markets account and start trading now.London formed a balanced TPO value near the POC; New York’s retest will decide whether price migrates upward or rotates into a lower structure.
S&P 500 futures (ES) stayed in a balanced, rotational range during London trade. Value was centred near a developing point of control (POC) around ~6,975. Price held between the pivot “gates” at 6,979.50 (upper) and 6,958 (lower), while cumulative delta stayed positive.
On the wider map, the top of the range sat near ~7,010.25 and the bottom near ~6,936.50. The New York open was the key test: will price hold outside the gates, or rotate back through value?
Acceptance And Rejection Framework
Acceptance meant: price spends time beyond a gate, follows through, and then holds on a retest. Rejection meant: a quick push beyond a level that snaps back into value. If price holds above 6,979.50 and stays supported above the POC area, the next path points toward ~7,010. If price cannot hold above 6,979.50, rotates back through value, and then holds below 6,958, then ~6,936.50 comes into view. Positive delta was supportive only if price also moved higher. In a balanced market, a fast move through a gate at the open can often whipsaw. Overall, the market is in a tight, balanced range and waiting for a clear signal. The key levels remain 6,979.50 on the upside and 6,958 on the downside. Until price breaks and holds outside this zone, expect more back-and-forth rotation.Macro Backdrop And Volatility Implications
This pause fits the macro picture in early February 2026. January payrolls were strong, with 245,000 jobs added, and CPI showed inflation still firm at 3.1%. That mix keeps the market unsure about the Fed’s next step. Attention is now on the March FOMC meeting, the next major catalyst that could end this stalemate. For derivatives traders, indecision often keeps implied volatility relatively low. That can mean options prices do not yet reflect the risk of a larger move after the March Fed decision. A similar “coiling” pattern played out last fall, when the market chopped sideways for three weeks ahead of the November 2025 rate decision, then broke higher. With this setup, pushing aggressive directional trades here is risky. It may be better to position for a volatility pop, or to wait for a confirmed breakout. A sustained acceptance above 6,979.50 could signal a move higher into the Fed meeting, with ~7,010 as the next target. On the other hand, a clean break below 6,958 that holds would suggest weakening sentiment. That would open a path toward ~6,936.50 as the next logical target. The key is confirmation: price should not just tag the level, but accept it and hold on a retest. In the next few days, focus on how New York trade responds at these pivot gates. Be careful with fast opening moves, which often reverse in balanced markets. The best setup is likely not the first break, but proof that the market can stay outside the 6,979.50–6,958 band. Create your live VT Markets account and start trading now.TD Securities expects the Bank of Canada’s deliberations summary to offer more nuanced guidance than January’s cautionary tone.
TD Securities expects the Bank of Canada’s Summary of Deliberations to add more detail than the cautious statement from January. It expects the Bank to balance two points: ongoing uncertainty, and the fact that the Bank has limited tools to deal with long-term structural headwinds.
The firm also expects the minutes to expand on the uneven data that came in before the January decision. It thinks the Bank will note that monthly activity has cooled heading into 2026.
Inflation And Growth Signals
TD Securities does not expect the minutes to show much concern about the recent rise in headline CPI. Instead, it expects the Bank to point to softer core inflation measures and to highlight the impact of one-off factors. The firm expects the minutes to repeat that the Bank discussed several options for its next move. It also expects to see differing views on both timing and direction, plus more detail on what type of shock could change the outlook laid out in the January Monetary Policy Report. The article says it was produced with an AI tool and then reviewed by an editor. It is credited to the FXStreet Insights Team, described as journalists who select market observations and add analysis from internal and external sources. We expect the upcoming Bank of Canada Summary of Deliberations to sound less cautious than the January meeting. The Bank will likely acknowledge that economic activity has cooled as 2026 begins. This more nuanced message may suggest the Bank is becoming more comfortable with the current economic path.Derivatives And Rates Positioning
Traders should focus on how the Bank discusses inflation, since it will likely look past the recent rise in headline CPI. January 2026 data showed headline inflation at 2.9%, while core measures—preferred by the BoC—fell to an average of 2.5%. We expect the Bank to highlight this underlying disinflation trend. Other recent data also points to a slowdown. The December 2025 monthly GDP report showed a small 0.1% decline. The January 2026 jobs report showed unemployment rising to 6.2%. The deliberations will likely discuss how this weaker backdrop could shape future policy decisions. For derivatives traders, this added nuance may support positioning for an earlier-than-expected policy shift. Uncertainty about the timing of the first rate cut could keep volatility elevated in options on CORRA futures. We see potential value in buying straddles or strangles around the April and June meeting dates. With the data cooling, directional trades that benefit from lower interest rates may also look more attractive. We stayed cautious through the second half of 2025, but the picture is now changing. Going long BAX futures or buying call options on Government of Canada bonds could offer upside. Create your live VT Markets account and start trading now.WTI trades near $65.15, up 1.53%, on Middle East supply worries despite rising US stockpiles
WTI US Oil traded near $65.15 on Wednesday, up 1.53%. It extended a rebound that began earlier in the week. Prices climbed on worries about global supply, linked to Middle East tensions.
US–Iran relations stayed tense. This raised concerns about tougher sanctions or disruptions to Iranian exports. Reuters reported that the US may consider intercepting ships carrying Iranian crude if nuclear talks fail.
Supply Risks Back In Focus
In Asia, India cut imports of Russian oil while it holds trade talks with the US. It also increased purchases from the Middle East and West Africa. This supported demand for some crude grades. Gains were limited by higher US supply. The American Petroleum Institute reported a 13.4 million-barrel rise in US crude inventories for the week ending 6 February. This was the largest build since early 2023. Traders waited for official Energy Information Administration data to confirm or challenge the API numbers. Markets also watched upcoming reports from OPEC and the IEA. The IEA warned that global supply could exceed demand this year, which could create a surplus. WTI remained sensitive to both geopolitics and data on output, demand, and stockpiles.Positioning And Hedging Ideas
We are seeing a familiar pattern in the oil market, similar to what we faced in February 2025. At that time, the market was pulled between Middle East supply fears and large increases in US crude inventories. Today, with WTI trading around $78 a barrel, tensions in the Red Sea are again pushing prices higher. This creates a challenging backdrop for traders. The risk of supply-chain disruptions, along with OPEC+ signaling it will keep production cuts through the second quarter, adds clear upside risk. Recent data showing China’s manufacturing PMI rising to 50.8 also points to firmer demand from Asia. We think traders may want to consider buying out-of-the-money call options on April and May contracts to benefit from any sudden price spikes. Still, strong US output is limiting the upside. Production has been near the record levels seen in late 2025. While the latest EIA report showed a smaller-than-expected inventory build of just 1.2 million barrels, overall US crude stocks remain high. This steady supply can cap how far prices climb in the short term. This push-and-pull between bullish sentiment and bearish fundamentals has lifted implied volatility in options. For some traders, that makes premium-selling strategies more attractive, such as selling cash-secured puts below the $75 support level. This can generate income while setting a defined entry point if prices pull back. We also remember the IEA’s warning last year about a possible supply surplus. That risk remains if global growth slows. Traders holding long positions may want to buy puts as protection against a sudden demand drop. This adds a layer of insurance in a market being pulled in two directions. Create your live VT Markets account and start trading now.Rabobank’s Jane Foley says political uncertainty under Starmer is restraining sterling; EUR/GBP stays near 0.8700; GBP is the weakest G10 currency over five days
UK political uncertainty around Prime Minister Starmer is holding back sterling. EUR/GBP is staying close to 0.8700, and on a 5-day view GBP is the weakest G10 currency.
Rabobank expects EUR/GBP to trade between 0.86 and 0.87 over the next month. It still sees EUR/GBP moving higher into mid-year and beyond.
Political Risks And Sterling Outlook
The bank says the main downside risk for GBP is a return of market focus on UK politics, with tensions potentially rising into spring. It also notes that the Bank of England is one of the few remaining G10 central banks that markets still expect to cut rates again. The note says GBP can react strongly to changes in UK long-term interest rates because the UK runs a current account deficit. It adds that gilts may be more vulnerable to negative headlines than debt in countries that have large domestic savings. Rabobank forecasts EUR/GBP at 0.89 over 12 months. A year ago, political uncertainty around Prime Minister Starmer was a key reason the pound struggled. In early 2025, this risk helped make Sterling the worst-performing G10 currency over a five-day period. That same political fragility is still limiting the currency’s upside.Markets Focus On Rates And External Funding
Expectations for Bank of England rate cuts have also played out, adding pressure to Sterling. The BoE cut rates twice in late 2025, taking the policy rate down to 4.25%. By contrast, the European Central Bank has kept its key rate at 4.50%, which makes the euro more attractive on yield. This gap in rates matters even more because of the UK’s current account deficit, which was 3.5% of GDP in the latest reported quarter of 2025. Because the UK relies on foreign capital, the pound and UK government bonds (gilts) can be quick to weaken on bad news. You can see this in how fast gilt yields move after negative headlines compared with German bund yields. Last year’s call for EUR/GBP to reach 0.89 has been very close, with the pair now trading near 0.8880. Over the next few weeks, traders may look at ways to benefit if the pound stays weak versus the euro. One defined-risk approach is buying EUR/GBP call options with a strike around 0.8950 to gain if the uptrend continues. With ongoing political and economic uncertainty, implied volatility in the pound remains high. This can make selling out-of-the-money GBP puts against the US dollar a potential way to collect premium, especially for traders who think support is forming near $1.20. Another option is a long straddle, which positions for a big move either way if a new political trigger appears. Create your live VT Markets account and start trading now.US average hourly earnings grew 3.7% year on year in January, beating expectations of 3.6%
US average hourly earnings rose 3.7% year over year in January. This was above the 3.6% forecast.
The gap between the actual and expected rate was 0.1 percentage points. This report shows wage growth is running hotter than expected.
Implications For Inflation And Fed Policy
This stronger wage growth suggests inflation could stay higher for longer than expected. Markets had been pricing in possible rate cuts by mid-year, but this report may push that timeline back. It also raises the chance the Federal Reserve keeps policy tight for longer to bring inflation under control. The first reaction showed up in interest rate futures. Traders quickly cut the probability of a rate cut by June 2026. Last week, CME FedWatch showed nearly a 70% chance of a cut at that meeting. That figure has now dropped below 40%. This fast repricing means derivatives trades that depend on near-term easing now carry more risk. For equity index traders, this points to a more defensive stance in the weeks ahead. “Higher for longer” rates often pressure stock valuations, especially in technology. The VIX, a key volatility gauge, has already risen from about 14 to above 17. Traders may want to consider protective puts on the S&P 500 or Nasdaq 100. This setup also looks similar to what happened in 2025. That year, several strong labor reports pushed out expectations for a Fed pivot and triggered short, sharp equity sell-offs. We could see similar volatility again if hopes for cheaper borrowing costs keep getting delayed.US Dollar And Fx Strategy
In FX markets, a more hawkish Fed outlook usually supports the US dollar. The Dollar Index (DXY) is already firming, moving toward 105 as capital seeks higher relative US yields. Derivatives traders may want to consider strategies that benefit from USD strength against currencies where central banks are closer to cutting rates. Create your live VT Markets account and start trading now.In January, America’s jobless rate was 4.3%, slightly below the expected 4.4%
U.S. unemployment was 4.3% in January, below the 4.4% forecast.
A lower-than-expected unemployment rate suggests the economy is running hotter than expected. That gives the Federal Reserve even less reason to cut interest rates soon. A strong labor market can keep wage growth firm and make inflation harder to bring down.
