The US Supreme Court ruled that US President Donald Trump’s “national security” tariffs were unlawful. President Trump responded at a White House press conference on Friday. He said his administration would impose more tariffs using other legal options, including Section 301 of the Trade Act of 1974. He also pointed to national security conventions as support for this approach.

Legal Routes For New Tariffs

Many current tariffs already use Section 301. However, most tariff revenue was collected under the International Emergency Economic Powers Act (IEEPA). The administration used the IEEPA widely after its “Liberation Day” announcement in early 2025. After the ruling that limits the use of the IEEPA for tariffs, the administration is expected to rely more on Section 301. Trump said another round of tariffs could start almost immediately. When asked by the media, Trump suggested that tariff fees collected under the now-unlawful IEEPA programme would not be refunded by the White House. Businesses and consumers who paid these import fees would need to sue the administration to try to recover the money. The Supreme Court ruling was expected to bring clarity, but it has created major uncertainty for markets instead. Trump’s immediate promise to use Section 301 for new tariffs suggests we should expect high volatility in the weeks ahead. The CBOE Volatility Index (VIX), a key measure of market fear, has already jumped to 22. That level has often signalled that traders are nervous about what comes next. In this environment, a long-volatility approach using options on broad market indices like the S&P 500 may be more sensible. Directional trades are risky when policy can change overnight. But holding options can benefit from large price swings, which now look more likely. This follows the same playbook used during the trade uncertainty that built up through 2019.

Positioning For Market Volatility

We should consider bearish positions in sectors that rely heavily on imports, such as retail, autos, and technology. These sectors could face a double hit: new tariffs and the added cost of suing the government to recover billions in unlawfully collected fees. That combination could pressure cash flow and earnings. Recent data already shows the ISM Manufacturing PMI falling to 49.1, which signals a contraction. New trade policies could make that weaker trend worse. These tariff threats could also push inflation higher. The latest CPI report showed core inflation still elevated at 3.8%. New taxes on imported goods are likely to raise prices for consumers. That could make it harder for the Federal Reserve to manage the economy and could delay any interest rate cuts. This adds another risk that may weigh on the broader market. We should also expect quick retaliation from major trading partners, which could hurt US exporters. During the trade disputes that began in 2018, retaliatory tariffs on products like soybeans and bourbon led to sharp price drops and hurt producers. That history suggests caution when holding long positions in export-focused industries that could become targets. Create your live VT Markets account and start trading now.

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ING expects the Bank of Korea to keep its policy rate at 2.5% next week. Inflation is still close to the 2% target, while concerns about financial stability remain. The report says the rate-cutting cycle ended last year. It adds that the central bank is likely to avoid hinting at future rate hikes.

Korea Policy Rate Outlook

Exports are expected to keep improving, while consumption should recover slowly. The report also highlights rising debt, higher pressure on the services sector, and a slow recovery in construction. It says a neutral policy stance could ease fears of new rate hikes. It also expects consumer and business surveys to improve, supported by strong local equity performance and a positive outlook for the IT sector. The article says it was produced with help from an artificial intelligence tool and reviewed by an editor. We expect the Bank of Korea to keep the policy rate at 2.5% in the coming weeks, confirming that the easing cycle ended in 2025. With January inflation holding at 2.1%, there is little reason for the Bank to move. As a result, derivatives pricing is likely to reflect a long stretch of low volatility in short-term interest rates.

Market Implications For Traders

For the Korean won, a neutral policy stance points to a mostly range-bound move against the US dollar. Strong export data, including a 15% rise in semiconductor shipments in January 2026, should support the currency. However, ongoing concerns about high household debt may limit any 큰 rise in the won. This could make strategies like selling volatility on USD/KRW options appealing. Local equities also look supported. Stable rates and optimism in tech are both positive for the market. The KOSPI 200 index is already up 5% this year, and that trend may continue, which could keep bearish positions in check. Traders may prefer strategies that aim for steady, moderate gains rather than sharp rallies. A similar pattern played out in 2025, when the Bank of Korea stayed on hold. During that time, implied volatility in both currency and equity index options fell as policy uncertainty faded. We expect the same trend to return in the coming weeks, which could favour premium-selling strategies. Create your live VT Markets account and start trading now.

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Lorie Logan, President of the Federal Reserve Bank of Dallas, said on Friday at an event at Columbia University that uncertainty in the US economy remains high. She said the tech sector is one of the biggest sources of that uncertainty. Logan said she supported the Federal Reserve’s January decision to keep policy unchanged as the job market stabilises. She said she is cautiously optimistic that inflation can return to the Fed’s target, but she is not yet convinced it will reach 2%.

Tariff Uncertainty And Next Steps

She said tariff uncertainty has increased following a court decision. She said many factors will shape the outcome of that decision, and it is not clear what happens next. Logan said upside inflation risks remain, and that policy is in a good place to manage risks to the Fed’s mandate. She said she is concerned that demand could grow faster than supply. On the labour market, she said it does not appear that AI is replacing workers. She said the current break-even level for job growth is about 30,000 jobs per month. She said banks should aim for a diverse depositor base. She also said banks should be ready to access liquidity when needed.

Market Volatility And Rates Outlook

Ongoing economic uncertainty and persistent inflation risks suggest we should be ready for higher market volatility. Since a return to 2% inflation is not guaranteed, the Federal Reserve may keep a hawkish tone and push back on expectations for near-term rate cuts. In this setting, buying volatility through options on major indices such as the S&P 500 may be a sensible approach in the coming weeks. Recent data supports this cautious view. The January 2026 jobs report showed payrolls rose by 210,000, well above the 30,000 break-even level Logan mentioned. The latest CPI report also showed core inflation remains stuck at 3.4%, which suggests the final stage of disinflation could be difficult. The VIX, a key measure of expected volatility, has moved up from recent lows and traded above 17 last week. Interest rate futures still price in at least two rate cuts by the end of this year, but that now looks too optimistic. Derivatives traders may want to position for a “higher for longer” rate backdrop. This could include using SOFR futures or options to bet against the market’s more dovish expectations for the second half of 2026. Logan’s focus on uncertainty in the tech sector is also a clear signal for that part of the market. Higher rates and unclear growth tend to weigh on growth stocks, where valuations depend on profits far in the future. Traders may want to hedge long technology exposure, for example by buying put options on a Nasdaq 100 tracking ETF. This setup looks similar to what markets saw through 2025. During that period, traders who tried to anticipate a quick Fed pivot were often disappointed, as policymakers held firm while inflation stayed elevated. Logan’s comments suggest that a repeat is possible, where patience and caution may pay off. One new risk is the court decision on tariffs, which adds uncertainty around supply chains and input costs. This could create additional upward pressure on prices that markets may not have fully priced in yet. That strengthens the case for holding protection against unexpected market moves. Create your live VT Markets account and start trading now.

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India’s fourth-quarter GDP is expected to slow because export growth is weakening. This is linked to the delayed impact of tariffs. Domestic demand is still holding up. The Rupee is under pressure as capital flows out during a PE/VC exit cycle. It is also hurt by weak FII inflows, even after a recent trade deal, and by worries that AI could reduce demand for India’s IT services. USD/INR is expected to rise toward 93.00 over the medium term. In the near term, the Rupee may get some support in March due to seasonal patterns and expected inflows. Recent data confirms the slowdown in India’s economy. Q4 2025 GDP growth eased to 6.5%, mainly because exports weakened. Domestic consumption remains a bright spot, but weaker exports are dragging overall growth. This fits with the lagged effect of tariffs that built up through 2025. This backdrop is weighing on the Rupee. It is struggling as private equity-related outflows continue. FIIs have also been net sellers. January 2026 data shows a net equity outflow of almost $2 billion. At the same time, concerns are rising about the IT services sector, as AI adoption by North American clients starts to reduce billable hours. With these headwinds, USD/INR looks set to move higher toward 93.00 over the next few months, from around 90.50 now. Traders may want to position for this with tools such as USD/INR call options or bull call spreads. The view is driven by ongoing weakness in capital flows. In the next few weeks, though, it makes sense to stay flexible. USD/INR could dip in March. Seasonal factors, such as year-end fiscal inflows, often support the Rupee at that time, as seen in March 2025. Any March strength in the Rupee would likely be temporary, not a reversal. It may offer a better level to start or add to long USD/INR positions.

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Silver rose for the third straight day on Friday as safe-haven demand increased amid rising US-Iran tensions. XAG/USD traded near $82.80 and was on track for a weekly gain of more than 5%. Prices rebounded after slipping to near two-week lows earlier in the week. The rally continued even as the US Dollar strengthened.

Rising Middle East Tensions

Tensions increased after the United States boosted its military presence in the Middle East. On Friday, President Donald Trump said he was considering a limited strike on Iran. On Thursday, Trump said Tehran must reach a “meaningful deal” or face “bad things.” He added that he expected more clarity on a new nuclear agreement within 10 to 15 days. Other supportive factors included steady institutional inflows, solid industrial demand, and expectations for lower US interest rates later this year. The short-term technical outlook also improved on the 4-hour chart. Price hovered near the upper Bollinger Band as the bands began to widen, which signals higher volatility. MACD stayed above the Signal line in positive territory, and the histogram continued to widen.

Technical Levels And Trade Plan

RSI held near 66, still below overbought territory. A break above $82.39 could open the door to $86.00, followed by resistance near $92.00. Immediate support was at the 20-period SMA at $77.34. Below that, key levels to watch were $72.16 and then $64.00. Bullish momentum in silver appears to be building, similar to last year when geopolitical risks jumped. Price is pushing against the upper Bollinger Band, so traders should expect more volatility and potential upside. With MACD and RSI showing steady upward strength, buying on small dips looks like the preferred approach in the weeks ahead. The setup also feels familiar. Tensions in the Red Sea are lifting safe-haven demand, much like the US-Iran flare-ups did in 2025. This ongoing geopolitical risk premium helps support silver prices. The market is also showing strength by rising even with a relatively firm US Dollar. Fundamentals continue to back the bullish case. Industrial demand for silver, led by solar panels and electric vehicles, reached a record 632 million ounces in 2023 and still looks strong. This demand provides meaningful long-term support. Monetary policy expectations are also becoming a major driver. January US inflation remained sticky at 3.1% year over year, yet markets are still pricing in Federal Reserve rate cuts later this year. Lower rates would likely weaken the dollar and make non-yielding assets like silver more attractive. With momentum improving, call options could be a way to benefit from a move to higher prices. Options expiring in the next 45 to 60 days may help capture this expected move. This approach offers upside exposure while keeping risk capped. Even so, risk management remains essential. A clear break below the 20-period moving average would be an early sign to cut long exposure. Stop-loss orders or protective put options can also help protect against a sharp reversal if global tensions ease. Create your live VT Markets account and start trading now.

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Baker Hughes reports the US oil rig count is 409. This figure shows how many oil drilling rigs are currently active in the United States.

Declining Rig Activity Signals Tighter Supply

The US oil rig count is now 409. This extends a worrying trend for future output. It is well below most of 2025 levels, when counts were usually in the high 400s. This steady drop shows producers are not adding new drilling. That could tighten supply later this year. We see this as a clear sign of ongoing capital discipline from exploration and production companies. Even though West Texas Intermediate (WTI) crude has held above $80 per barrel for the past quarter, the usual surge in drilling has not happened. This points to a shift in the industry: companies are focusing more on shareholder returns than on growing production. For traders, the low rig count is a bullish signal for oil prices over the medium term, especially for contracts expiring in the second half of 2026. We should consider long exposure, such as call options on WTI or Brent futures, to benefit if prices rise as supply limits become clearer. The risk of price spikes during the summer driving season also looks higher than the market currently reflects. Recent government data supports this view. US crude production growth has stalled, and the Energy Information Administration expects growth of less than 1% this year. Commercial crude inventories have fallen in five of the last six weeks. The latest report showed a 2.7 million barrel decline. Together, fewer rigs and lower inventories suggest a tighter market ahead.

Implications For Prices And Positioning

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S&P 500 (EPH) and Nasdaq (ENQ) futures stayed inside Thursday’s ranges ahead of the 8:30 US GDP and inflation report. Both contracts looked balanced. The key question was whether price would hold above or below the main “gate” levels after the data. For EPH, Thursday held the central pivot at 6866.50. Upside was limited by the upper gate at 6893–6909. Price briefly pushed above the gate to 6923, then fell back and rotated between 6866.50 and 6893–6909.

Key Levels And Gates

By mid-London, EPH was near 6889.50. A shelf formed around 6889–6893, just under the upper gate. If price breaks and holds above 6893–6909, 6979.50 comes into view. Closer reference points are 6923, 6936, and 6952. If EPH falls below 6866.50, focus shifts to 6851–6842. Acceptance below 6842 points to 6803, with 6834, 6827, and 6818 watched along the way. ENQ traded near 24975. Value/POC was building around 24900, with a decision pivot at 25051. Key levels include an upper gate at 25134–25186, an upper range at 25405, and a lower range at 24744. Acceptance above 25051, and then above 25186, targets 25228, 25269, 25321, and 25405. Rejection below 25051 keeps attention on 24934, 24897, 24861, and 24816. A break below 24744 targets 24705–24680 and 24579.

Risk Off Shift After Data

Friday’s GDP and inflation report triggered the downside path, as traders read the numbers as a risk-off signal. Core PCE (a key inflation measure) came in hotter than expected at 0.5% month over month, versus 0.3% forecast. This suggests the earlier “wait and see” stance was more about downside risk than a setup for an upside breakout. After the release, S&P 500 futures lost the key 6851–6842 gate, and the Nasdaq broke decisively below 24744 support. These areas had been acting as a floor. Now they should be treated as overhead resistance in the next sessions. If price rallies back into these zones but fails to gain acceptance, traders will likely see that as a shorting opportunity. The data also shifted expectations for Federal Reserve policy. Futures markets reduced the odds of a rate cut in the first half of the year. The CBOE Volatility Index (VIX), which had been steady near 14, jumped above 19. That move shows a sharp rise in the cost of portfolio protection and points to larger swings and higher uncertainty over the next month. This reaction echoes the inflation shocks seen in Q3 2025, when similar surprises led to a fast 7% pullback in major indices. That period showed that when a major catalyst changes the story, the first selloff often is not the last. Until price proves otherwise, the market has shifted from balanced conditions to a defensive posture. For derivatives traders, this argues against positioning for upside expansion. Selling call credit spreads with strikes above the new resistance near 6900 in the S&P 500 can benefit from both the stronger ceiling and the higher volatility premium. Buying protective puts also makes more sense now, as the market shows clearer downside risk toward targets such as 6803. Create your live VT Markets account and start trading now.

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Japan will publish several key economic reports next week, after GDP recovery in the fourth quarter came in weaker than expected. January industrial production and retail sales are expected to rise. Tokyo CPI inflation is likely to cool again as energy, utility, and food costs ease. Core inflation (excluding fresh food) is forecast to drop below 2%.

Near Term Data And Policy Expectations

If core inflation falls below 2%, the Bank of Japan is expected to keep its policy rate unchanged at 0.75% at the March meeting. The report adds that fiscal spending and winter bonuses may be supporting activity in January. In early 2025, many expected a rebound in Japan’s activity alongside easing inflation. That mix would have let the Bank of Japan stay on hold. The thinking was that core inflation would move below 2% and keep the policy rate at 0.75% through the March 2025 meeting. This view implied low volatility and steady, predictable policy. But inflation stayed much more stubborn through 2025 than expected. While Tokyo core CPI briefly dipped, it later picked up again. As of January 2026, it is running at 2.8% year over year, driven by wage pressure and a weaker yen. With inflation staying above the 2% target, the policy picture has changed. As a result, the Bank of Japan dropped its “wait and see” approach later in 2025 and raised the policy rate to 1.00%, surprising markets that expected a longer pause. Current pricing suggests at least two more rate hikes could happen before year-end. The period of a passive central bank seen last year now looks over.

Implications For Yen And Rates Volatility

A major factor is the yen. It has weakened further against the dollar to around 162, a multi-decade low not seen since the late 1990s. This lifts import costs and creates a tough feedback loop for the central bank. Ongoing yen weakness adds to inflation pressure and increases the case for higher interest rates. For derivative traders, this makes “low-volatility” trades in Japanese rates more risky. Instead, trades that benefit from larger swings in Japanese government bond (JGB) futures may make more sense. Markets may be underestimating how forcefully the Bank of Japan could respond. In FX, this backdrop also puts the focus on yen derivatives. With the yen so weak, options that profit from a sharp rebound—such as buying low-cost, out-of-the-money JPY calls—may offer attractive risk-reward. If the Bank of Japan turns more hawkish than expected in the coming weeks, the yen could rally quickly. Create your live VT Markets account and start trading now.

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GBP/USD rose more than 0.23% after the US Supreme Court ruled against President Donald Trump’s tariffs imposed under a national emergency law. At the time of writing, the pair was trading at 1.3494. The US Dollar weakened after the decision. A softer-than-expected US Gross Domestic Product (GDP) report also added pressure to the Dollar.

Dollar Weakness And Sterling Tailwinds

The Supreme Court ruling, along with weaker economic data, is putting clear downward pressure on the US Dollar. That supports GBP/USD, which is now breaking higher. We see this as a meaningful shift, not just a short-term move. The latest GDP report for Q4 2025 confirmed the slowdown. Growth came in at an annualized 1.4%, well below the 2.0% forecast. This weak result increases the chance the Federal Reserve could cut interest rates earlier than expected this year. That is a change from most of 2025, when stronger data helped support the Dollar. In contrast, the UK economy is holding up better. Last month’s inflation remained high at 3.8%. This keeps the Bank of England on a more hawkish path than the Fed. As expectations for policy diverge, the pound should stay supported versus the Dollar. Given this outlook, we favor buying GBP/USD call options expiring in late March and April 2026. Strike prices around 1.3550 and 1.3600 look attractive for capturing further upside. This approach targets gains if GBP/USD rises, while keeping maximum risk clearly defined.

Options Strategy And Technical Backdrop

The break above 1.3450 is technically important. The pair failed to clear this level several times in late 2025. Volatility has also increased, with 1-month implied volatility rising to 9.8%, the highest reading this year. This suggests the market is preparing for bigger price swings—conditions that can benefit an options-based strategy. Create your live VT Markets account and start trading now.

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NZD/USD traded near 0.5970 on Friday and was little changed on the day. The pair briefly swung after New Zealand’s policy decision, then settled as markets digested a steady outlook and more cautious guidance. The Reserve Bank of New Zealand (RBNZ) kept its Official Cash Rate unchanged at its February meeting, the first under Governor Anna Breman. The bank said progress toward the 2% inflation target has been uneven. It also expects inflation to return to the target range in the first quarter of this year.

Rbnz Guidance Shifts Rate Path

The RBNZ pushed back expectations for the next possible rate hike to late 2026 or early 2027. That shift reduced support for the New Zealand Dollar, especially against currencies supported by central banks that are not yet moving toward easing. NZD/USD also stayed range-bound because the US Dollar outlook is unclear. Federal Reserve rate expectations have been shifting as softer economic signals come in. Trading has also reflected renewed uncertainty about US trade policy. The US Supreme Court struck down former President Donald Trump’s broad “national security” tariff framework. This raised questions about what future tariff plans might look like. The US administration is expected to seek other legal ways to bring tariffs back, which could influence expectations for US growth, inflation, and Fed policy. With the RBNZ signaling it will not raise rates until at least late this year, NZD/USD upside looks limited. The bank’s dovish stance is supported by inflation data from late 2025, when annual inflation fell back into the 1–3% target band for the first time in three years. With less yield advantage, there is less reason to be bullish on the Kiwi.

Positioning And Volatility Considerations

This setup points to a likely range-bound market, caught between a cautious RBNZ and an uncertain US Dollar. In mid-2025, after the RBNZ first paused its hiking cycle, the pair moved into a multi-month sideways channel. If prices stay contained, selling volatility with options strategies such as iron condors or strangles could work well. However, implied volatility is currently low. One-month options are pricing volatility around 8.5%, well below the 12-month average. That suggests the market may be underpricing the risk of a sharp move linked to US trade policy. The Supreme Court decision has left a gap in policy, and any surprise tariff announcement could trigger a breakout. Because of this risk, buying relatively cheap out-of-the-money puts or calls can work as a hedge or as a direct way to position for a volatility jump. The latest US trade data, showing the deficit at its widest in 18 months, may add political pressure for action. That makes an abrupt policy move a real threat to the current calm. It may also help to consider trades that reduce exposure to the US Dollar. A clearer way to express a dovish RBNZ view is to position for NZD weakness against the Australian dollar. A long AUD/NZD position, set up with forward contracts, may be appealing as Australia’s central bank has kept a more hawkish tone. Create your live VT Markets account and start trading now.

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