US shares rose for a third straight session. The DJIA added about 300 points (0.65%), the S&P 500 rose 0.6%, and the Nasdaq gained about 0.5%. Markets were waiting for the Fed’s January minutes, due at 2:00 PM ET. The Fed held rates at 3.50% to 3.75%. Markets see roughly a 90% chance of no change in March, and the first cut is not expected before June.

Ai Trade And Fed Focus

Nvidia rose more than 2% after Meta expanded an AI chip deal. Meta plans to deploy millions of Nvidia chips in US data centres. The order includes Grace CPUs and Vera Rubin GPU systems, and is described as being worth tens of billions. AMD fell nearly 4%. Amazon rose nearly 2% after Pershing Square increased its stake by 65% in the fourth quarter. Goldman Sachs gained nearly 3%. Palo Alto Networks fell about 10% even though Q2 adjusted EPS was $1.03 on $2.59 billion in revenue, versus $0.94 and $2.58 billion expected. Its Q3 EPS outlook was $0.78 to $0.80, below the $0.92 consensus. The stock is down about 11% year to date. The higher costs were tied to a $25 billion CyberArk acquisition and a $3 billion Chronosphere deal. Applied Digital fell nearly 8% after Nvidia exited a $177 million stake.

Earnings And Options Volatility

Garmin jumped after adjusted EPS of $2.79 on $2.12 billion in revenue, beating estimates of $2.39 and $2.01 billion. It guided 2026 EPS of $9.35 on $7.9 billion in revenue, versus $8.51 and $7.4 billion expected. Wingstop rose more than 13% after adjusted EPS of $1.00, above the $0.84 estimate. Q4 domestic same-store sales fell 5.8%. Its 2026 guidance called for flat to low-single-digit growth. Gold rose above $5,000 per ounce, near a two-week high. China’s central bank bought gold for a 15th straight month in January, after a late-January crash tied to Kevin Warsh’s nomination. Oil rose more than 2% to nearly $64 per barrel on Russia-Ukraine tensions and reports around Iran nuclear talks. December housing starts were 1.4 million annualised, released late after a government shutdown. After the rebound from last week’s AI-driven selloff, we expect volatility to stay elevated in technology. The Fed minutes matter, because any signal that rate cuts could be pushed beyond June could quickly end the current dip-buying. The latest January 2026 jobs report also showed surprising strength, similar to the strong reports seen across 2024. That gives the Fed less reason to cut rates soon. We expect the AI trade to become more selective. Nvidia continues to strengthen its lead with the new Meta partnership. One approach is a pairs trade that favours Nvidia over AMD using call options, especially after AMD’s nearly 4% drop today. The move supports the winner-take-all pattern seen in AI hardware over the past two years. Earnings are driving big one-day moves, which can create opportunities in single-name options. Palo Alto Networks falling 10% on weaker guidance may make puts attractive. At the same time, high implied volatility after earnings in names like Garmin and Wingstop can make strategies such as selling puts appealing for traders who think the new highs will hold. Similar volatility is likely in other tech and consumer names reporting in the coming weeks. We are also watching commodities for signs that strength could continue. Gold futures are above a record $5,000 per ounce. With steady central bank buying and the market looking for a future Fed pivot, call options on gold ETFs may be attractive, similar to past rallies during easing cycles. Geopolitical risk is also lifting crude toward $64 a barrel, making bullish oil positions a reasonable hedge against further instability. Create your live VT Markets account and start trading now.

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The AI selloff is now spreading beyond a handful of tech leaders. Markets are moving away from expensive AI pioneers and toward companies with nearer-term cash flow and stronger pricing power. The pressure is clearest in software, wealth management and brokers, insurance, logistics and transport, and real estate services. In these sectors, AI tools can cut fees, squeeze margins, and replace manual work.

Us Downstream Exposure

The US market has more exposure to downstream AI, such as apps, software, and services. This is driving tougher questions about monetisation, payback on AI spending, and whether AI shifts value away from companies and toward customers. Asia has more exposure to upstream AI infrastructure, such as memory, foundries, and assembly and packaging. Demand for physical build-outs can support these areas, even when service-based models face disruption. Within Asia, Korea and Taiwan are most tied to AI hardware cycles, supply tightness, component pricing, and factory utilisation. Japan is more tied to AI adoption in industry and enterprise, including automation, robotics, sensors, and process upgrades. Diversification also has limits. Many Asian indices are top-heavy, and Taiwan and Korea can be driven by a small number of large chip-related stocks.

Risks And Drawdowns

Asia can still decline during global risk-off moves, broad tech selloffs, or semiconductor down-cycles. Asia-listed software and IT services also fell with US peers during this selloff. This selloff does not mean the AI boom is over. It looks more like a rotation. We are seeing a shift away from US software and service companies and toward Asian upstream hardware and component makers. In other words, investors are moving from businesses that may be disrupted by AI to businesses that supply the infrastructure AI needs. This split has been clear in the first seven weeks of 2026. The Nasdaq 100 is down about 8%, while Taiwan’s TAIEX is up about 3%. This follows 2025, when US downstream AI stocks were priced for perfection and became vulnerable once scrutiny increased. The market is now favouring tangible cash flows from AI enablers over more speculative promises from AI applications. For traders, this rotation could be expressed through pairs trades. One approach is to buy call options on ETFs focused on Korean and Taiwanese semiconductors while also buying puts on US software-as-a-service indices. The goal is to benefit if the gap keeps widening between upstream “picks and shovels” and downstream service models under margin pressure. Rising “dispersion” in the US market also creates a volatility opportunity. Implied volatility in specific US software and financial services stocks may rise more than volatility in the broader S&P 500. The CBOE Volatility Index (VIX) has already moved above 22, which can support relative-volatility trades between sectors. Within Asia, Korea and Taiwan offer the most direct exposure to the AI infrastructure build-out. Recent industry reports show high-bandwidth memory (HBM) chip prices kept rising in January 2026, which directly supports major Korean manufacturers. This pricing power suggests resilience, even as US software companies face pressure to prove they can monetise AI. Japan offers a different, and often steadier, way to gain AI exposure. The focus is less on core components and more on industrial adoption and automation to address labour shortages. One possible strategy is selling puts on Japanese industrial automation or robotics ETFs to earn premium, based on the view that these businesses face less near-term disruption. Even so, the Asian trade has meaningful risks, especially concentration risk. Taiwan Semiconductor Manufacturing Company now makes up more than 30% of Taiwan’s main stock index, so one company can drive overall returns. To reduce this risk, you could hedge a long Asia position by buying puts on a global semiconductor ETF, which helps protect against a wider chip-sector downturn. Create your live VT Markets account and start trading now.

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UK inflation data on Wednesday showed headline CPI at 3%. The Retail Price Index fell to 3.8% from 4.2%. Tuesday’s labour report showed unemployment at 5.2% and payrolls down by 30K. Markets also expect more Bank of England rate cuts from 3.75%. In the US, the Federal Reserve kept rates at 3.50% to 3.75% at its January meeting, in a 10–2 vote. Two members dissented and wanted a cut. The FOMC minutes are due today, along with US housing and durable goods data. These releases should add more detail on the policy outlook.

Technical Picture For GBPUSD

GBP/USD edged lower on Wednesday and closed near 1.3540. Trading was quiet, with a range of about 50 pips. The pair is testing the rising 50-day EMA at 1.3534 for the first time since mid-January. The 200-day EMA is also rising and sits at 1.3362. After reaching a year-to-date high of 1.3869 in late January, the pair has posted lower highs. The decline picked up pace after it fell below 1.3600 this week. The Stochastic Oscillator has turned bearish and is moving toward oversold levels. A daily close below the 50-day EMA could open the door to 1.3400. A move back above 1.3600 would be needed to stabilise the pullback. At this point in 2025, the outlook signalled a weaker pound. UK inflation and labour data were cooling sharply, and the Bank of England looked ready to cut rates from 3.75%. The Federal Reserve, by contrast, looked more cautious. That policy gap correctly pointed to GBP/USD breaking below its 50-day moving average and trending lower over the next two quarters.

Policy Divergence In 2026

The picture in February 2026 is very different from last year. The Bank of England has held its key rate at 3.25% for three straight meetings. It has pointed to persistent wage growth, now running at 4.1% year over year. This is a clear shift from the aggressive rate-cut cycle that was expected through most of 2025. At the same time, the US economy is showing clearer signs of slowing. The latest Non-Farm Payrolls report for January 2026 showed just 85,000 jobs added, well below consensus estimates. US core PCE, the Fed’s preferred inflation measure, has cooled to 2.9%. This has increased market expectations for a Fed cut by mid-year, reversing the policy-divergence theme from last year. In this environment, derivative traders may want to shift their GBP/USD view from bearish to neutral, or cautiously bullish. The phase where sterling was expected to weaken because of heavy BoE easing looks less likely for now. Strategies that suit range trading, or a gradual move higher in GBP, may now fit better. One approach is to consider buying GBP/USD call options expiring in Q2 2026, positioning for a slow grind higher. Strike prices around 1.3850 could offer an attractive risk-reward setup, targeting a retest of the early-2025 highs. This limits downside while keeping exposure to upside if the pound strengthens as central-bank expectations shift. Volatility also matters when setting up trades. Implied volatility for GBP/USD has fallen to a 12-month low of 6.8%, making long-option strategies cheaper than they were for much of last year. This makes it a more cost-effective time to build positions that can benefit if prices start moving more. Create your live VT Markets account and start trading now.

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ING economists Peter Virovacz and Frantisek Taborsky expect the National Bank of Hungary (NBH) to start cutting rates at its 24 February meeting. They forecast a 25bp cut, which would take the base rate to 6.25% after 16 months without a change. They also expect the +/- 100bp interest rate corridor to move lower in line with the base rate. Their outlook leaves room for another 25bp cut in March, depending on inflation and foreign exchange conditions.

Election Risk And The Rate Path

They note that the general election on 12 April could influence later decisions. They project that, if prices and markets remain stable, the NBH could deliver one or two more rate cuts before the end of 2026. Money market pricing already reflects several 25bp cuts over the next couple of months. The article says it was created with help from an Artificial Intelligence tool and reviewed by an editor. With the NBH likely to cut its base rate next week on February 24, we should position for lower interest rates. January 2026 inflation of 3.6% looks manageable and gives the central bank room to move. We are considering forward rate agreements and interest rate swaps that should benefit if the expected 25bp cut happens. This easing cycle also puts downward pressure on the Hungarian forint. We should consider shorting the forint against the euro. The EUR/HUF rate, now steady around 394, may move higher. In 2025, the forint weakened during easing periods, and that pattern could return.

Hedging Into The April Vote

The April 12 election adds a key source of uncertainty, so we need to monitor volatility. We should consider buying EUR/HUF options that expire after the election. These can hedge risk or express a view on a larger move. Implied volatility for April contracts is already rising from late-year lows, suggesting the market is starting to price in this risk. The expectation of one or two more cuts by the end of 2026 suggests this is the start of a trend, not a one-time change. That supports holding longer-term positions that benefit from a flatter or falling yield curve, as Hungarian government bond yields may keep dropping from the 6.5% levels seen earlier this month. Any short-term forint strength may be a chance to add to short positions. Create your live VT Markets account and start trading now.

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Russia’s Producer Price Index (PPI) fell 5% year on year in January. This was a bigger drop than the 3.3% fall in the previous period. The latest figure shows producer prices are falling faster than they were a month ago. It means Russian producers received lower prices than they did a year earlier.

Implications For Deflation And Demand

Russia’s PPI at -5% year over year shows deflationary pressure is getting stronger. This can point to weaker domestic demand and, possibly, lower prices for major Russian exports. For derivative traders, it suggests tougher economic conditions. With deflation picking up, it becomes more likely that Russia’s central bank will cut its key interest rate soon to support growth. Online records show the key rate has stayed high at 16% since late 2024 to deal with earlier inflation. That leaves room for meaningful rate cuts. Expectations for lower rates may be the main driver for near-term trading ideas. If rate cuts are coming, the Ruble could face downward pressure. One way to trade this view is to consider long USD/RUB futures or call options on USD/RUB. The idea is that a smaller rate advantage for Russia could reduce support for the currency. The PPI drop may also reflect weaker global energy prices, which matter a lot for Russia’s economy. Recent data shows Brent crude futures for April 2026 delivery have struggled to stay above $75 a barrel, down from levels seen in the second half of 2025. This softer commodity backdrop supports a bearish view and could be expressed through put options on oil futures.

Risks For Industry And Equity Linked Derivatives

Deflation can squeeze profit margins for Russian industrial firms and add to signs of a broader slowdown. Industrial production data from late 2025 showed a 1.2% year-over-year decline, and the new PPI reading suggests that weakness may be continuing. This supports a cautious stance on any accessible Russian equity-linked derivatives. Create your live VT Markets account and start trading now.

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Russia’s producer price index fell 2.5% month on month in January. In the previous month, it fell 1.6%. This means producer prices dropped faster in January than in the month before. The month-on-month change weakened by 0.9 percentage points.

Deflationary Pressure And Growth Signal

The sharper fall in producer prices (-2.5% in January) points to strong deflationary pressure in Russia’s industrial sector. It suggests domestic demand is weakening and producers are cutting prices to keep sales moving. For us, this supports the view that economic growth is slowing in the first quarter of 2026. This release also adds weight to the case for a more dovish Central Bank of Russia, especially with the key rate still at 10.5%. After this data, the chance of a rate cut at the March meeting is likely higher than the 40% level we saw last week. We saw a similar, but smaller, drop in producer prices in mid-2025, which was followed by a period of easier monetary policy. If rate-cut expectations build, the ruble may stay under pressure. USD/RUB has already tested the 105 level this month, and this PPI reading gives a fundamental reason for the pair to move higher. Derivatives traders may look at call options on USD/RUB or put options on ruble-denominated assets to position for further ruble weakness. There are also implications for commodity-linked instruments, as Brent crude has fallen below $75 a barrel. Lower oil revenue together with domestic deflation creates a tougher outlook for Russia’s economy. Given these cross-currents, positioning for higher volatility in Russia-linked assets—using strategies like straddles or strangles—may make sense in the coming weeks.

Strategy For Volatility And Risk

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A recent video repeated this message: “Buy the tickets, don’t just watch the flight take off from the runway.” Since Monday, 16 February 2026, the Nifty has risen about 350–400 points from the 25,370 low. The video follows the Nifty’s move toward 26,000 and also explains an alternate scenario. It also covers the Bank Nifty moving above 60,900 and reaching 61,500.

Nifty Bank Nifty Key Levels

Bank Nifty is about 200 points below the prior high of 61,765. The video also shares an update on Waree Energies after a sharp rally. It also reviews Tata Steel, Bandhan Bank, and IFCI. The market has confirmed the bullish momentum we expected, with a strong rally from the week’s lows. Foreign Institutional Investors were net buyers of more than ₹15,000 crore in the first half of February, which supports the uptrend. Because of this, traders can focus on bullish setups, such as buying call options or futures on small dips. For Nifty, the main scenario is a move toward 26,000. Monthly expiry option-chain data shows the highest open interest at the 26000 Call strike, making 26,000 a key psychological level. Heavy Put writing at 25,500 has also created a strong support zone for the index.

Volatility Options Strategy

BankNifty is even stronger and is close to its all-time high of 61,765. A breakout above this level may trigger short-covering and speed up the rally. Traders should expect higher volatility as the index tests this resistance area. India VIX has dropped to around 13, so options are relatively cheaper. This is a good setup for traders who want to build long positions using call options. At the same time, low volatility can also support selling out-of-the-money puts to collect premium. Strong macro data also backs this move. Q3 GDP growth for FY2025 came in at a solid 7.8%. This rally is a clear recovery after the consolidation seen in the last quarter of 2025. Current momentum suggests domestic factors are now leading the trend. Create your live VT Markets account and start trading now.

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Rabobank’s Senior US Strategist, Philip Marey, expects the FOMC to deliver three 25 bps rate cuts in 2026. He now expects the easing cycle to start in June, not March. Stronger US labour market data have reduced the need for early cuts. Softer CPI inflation supports cuts later in 2026.

Rabobank Rate Cut Path

Rabobank expects cuts in June and September, and adds a third cut in October. It notes that the September and December meetings include an updated Summary of Economic Projections. The federal funds rate is currently 3.50–3.75%. Rabobank projects a total reduction of 75 bps in 2026, with the rate ending slightly below neutral. The article says a new Fed Chair may push for more than one cut. It also says the data are unlikely to push Jerome Powell to deliver more cuts during his remaining months as Chair. Given the strength of the labor market, we should now assume the Federal Reserve will not begin cutting interest rates in March. The January jobs report showed the economy added a strong 295,000 jobs. The unemployment rate stayed low at 3.6%. That removes any urgency for the Fed to act right away. As a result, short-term derivatives positions that were betting on an immediate cut may need to be unwound.

Trading Implications For 2026

Even so, easing inflation strengthens the case for cuts later this year. The latest CPI report shows headline inflation cooled to 2.3% year-over-year. That clears the way for future easing once the Fed is confident the labor market is stable. The derivatives market is already pricing this in. CME FedWatch probabilities for a March cut have fallen below 15%, while the odds of a cut by June have risen above 70%. For the coming weeks, this points to selling near-term volatility and buying volatility further out. Options on interest rate futures expiring in March and April look less attractive. Positioning for bigger moves around the June and September FOMC meetings looks more sensible. One way to express this view is with calendar spreads on SOFR options to benefit from the shift in timing. We also need to watch the Fed leadership transition, as Chairman Powell’s term is expected to end in May. A new Chair may want to set a new policy direction. That supports the idea of multiple cuts in the second half of 2026. In other words, the easing cycle looks delayed, not derailed. In late 2025, markets rallied sharply when rate cuts first came into view. Strong economic data has cooled that early excitement, but expectations for lower rates are still in place. The key question now is not *if* the Fed will cut, but exactly *when* the cycle begins this summer. Create your live VT Markets account and start trading now.

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Palo Alto Networks shares fell about 9% to $149 on Wednesday after the company reported its fiscal 2026 second-quarter results. The stock was last at this level on April 7, 2025, after tariff news tied to President Donald Trump. The company posted adjusted EPS of $1.03, beating estimates by $0.09. Revenue came in at $2.59 billion, about $10 million above forecasts. At the open, US stock indices rose, and US Treasury yields and gold also moved higher.

Guidance And Cyberark Deal Impact

Full-year adjusted EPS guidance was $3.65 to $3.70, below the Street average of $3.87. Full-year revenue guidance was $11.3 billion, compared with $10.5 billion expected. The $25 billion CyberArk deal includes about 56.6 million new shares, plus $45 per share in cash. Annual recurring revenue (ARR) for Next-Generation Security rose 33% year over year to $6.3 billion. The company also raised combined ARR guidance to $8.67 billion, above the Street estimate of $7.07 billion. The 200-day simple moving average is just below $193. Key chart levels sit near $144 and $142, with additional support near $130. The Relative Strength Index (RSI) is considered oversold below 30, and the stock typically reaches that level only briefly about every six months. The market may be overreacting to the earnings guidance, which could create an opportunity. The 9% drop appears tied to EPS guidance that may look weaker because the CyberArk acquisition adds share dilution. This move also looks company-specific, since the broader US indices opened higher, suggesting the overall market remains stable.

Options And Technical Trade Setup

For investors who agree with management’s view, the support zone between $142 and $144 is important. This area held during the August 2024 and April 2025 sell-offs, making it a proven floor. One possible approach is selling cash-secured puts with a strike near $140 for March or April expirations to collect premium. After today’s drop, implied volatility on PANW options jumped above 55%, well above its 30-day average of 35%. Higher implied volatility makes options more expensive and signals the market expects bigger price swings. In this setup, strategies that benefit from collecting premium—such as covered calls or put spreads—can look more attractive. Still, there is risk that lower EPS guidance reflects real margin pressure. If the stock breaks below the key $142 support, it could slide toward the next major support near $130, a level not seen since 2023. Buying puts could act as a low-cost hedge if that support fails in the coming days. The longer-term outlook remains positive, as the cybersecurity market is projected to grow by more than 12% in 2026. Palo Alto’s 33% ARR growth in its next-gen security platform shows it is benefiting from that trend. The main question now is whether this is a short-term guidance issue or a longer-term challenge tied to integrating a major acquisition. Create your live VT Markets account and start trading now.

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USD/CHF traded near 0.7717 on Wednesday, up 0.20% on the day. It held above 0.7700 and stayed inside the same tight weekly range. Trading volumes were light ahead of the release of minutes from the latest Federal Reserve meeting. The Fed kept its benchmark rate unchanged at 3.50%–3.75%, and markets are watching the minutes for hints about the next policy move.

Fed Minutes In Focus

Market pricing still suggests several rate cuts this year if inflation keeps cooling. Fed officials, including Chicago Fed President Austan Goolsbee, have said any cuts will depend on incoming data such as GDP and the PCE Price Index. In Switzerland, this week’s calendar is quiet. The Swiss Franc has stayed weak after softer CPI data. Inflation has been near the lower end of the Swiss National Bank’s target range. That has raised expectations that policy will stay loose, and that negative rates could return. With USD/CHF trading calmly around 0.8850, volatility remains low as markets wait for the Fed minutes. The narrow range shows many traders are avoiding big positions until they have more clarity. In short, the market is waiting for a clear trigger. The Fed is widely expected to keep rates steady, especially after the latest US inflation report came in slightly hotter at 2.9% and the labor market added a strong 225,000 jobs last month. Traders will look for any wording in the minutes that points to when rate cuts could begin later this year. Until then, the pair may stay stuck in place. This setup is similar to what we saw in early 2025, when the Fed held rates at 3.50%–3.75%. At that time, markets also studied every official comment to guess when easing would start. The same pattern is back: macro data is driving expectations.

Swiss Franc Policy Divergence

The Swiss Franc is also under pressure because Swiss inflation is still falling, recently reaching 1.2%. That keeps the Swiss National Bank on track to be one of the first major central banks to cut rates, possibly as soon as next month. This gap between a cautious Fed and a more dovish SNB gives USD/CHF underlying support. For derivatives traders, low implied volatility may offer an opportunity. Buying options—such as a long straddle—can position for a sharp move after the Fed minutes. This approach can benefit from a breakout in either direction, without needing to predict what the minutes will say. Create your live VT Markets account and start trading now.

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