NZD/USD holds near 0.6040 in the European session as traders await the RBNZ rate decision
NZD/USD stayed in a tight range near 0.6040 in the European session on Monday, ahead of the Reserve Bank of New Zealand (RBNZ) policy decision on Wednesday. Markets expect the RBNZ to keep the Official Cash Rate at 2.25% and to keep a hawkish stance.
New Zealand inflation has increased over the past four quarters. The Consumer Price Index rose 3.1% year-on-year in Q4 2025. Markets will also watch the Q4 Wage Price Index on Wednesday, with wage growth expected at 0.8%.
Deutsche Bank says AI fears drove a market repricing, wiping out over $1tn and spreading volatility beyond tech
Deutsche Bank analysts said fears about AI led to a fast reset in stock prices. In just 14 days, more than $1 trillion in global market value was wiped out. They said the volatility moved beyond technology and into areas like wealth management, real estate, and financials.
They said last week marked a shift from tech-driven swings to a broader market sell-off. The week’s low came on Thursday, after a sharp drop in software stocks. They also noted double-digit declines across wealth management, real estate, and financial companies.
Market Volatility Broadens
Market breadth weakened. The equal-weighted S&P 500 fell -1.37% on Thursday, then finished the week up +0.29% after rising +1.04% on Friday. The S&P 500 fell -1.39% for the week, despite a +0.05% gain on Friday. The Nasdaq dropped -2.10% for the week and fell -0.22% on Friday. The Magnificent 7 declined -3.24% for the week and -1.11% on Friday. They said U.S. data also moved markets. They pointed to flat December retail sales, a dovish Q4 Employment Cost Index, and the Atlanta Fed lowering its Q4 growth outlook. They said these reports helped drive a rally in Treasuries and pushed yields lower across the curve. Because volatility jumped so quickly, we are positioning for continued uncertainty in the weeks ahead. The VIX spiked above 28 last week for the first time since the banking stress of 2025. It is still high at 24, which suggests options premiums may stay expensive. This setup favors strategies that hedge downside risk or benefit from high volatility, such as buying protective puts on broad indexes like the SPX. The AI-driven repricing has clearly moved beyond tech and is now hitting sectors that were seen as more stable. Last week, implied volatility on the Financial Select Sector SPDR Fund (XLF) doubled as wealth management firms saw steep sell-offs. As a result, traders may want to watch for weakness outside the usual tech names. One approach could be using put spreads on real estate (IYR) or financial ETFs to position for more disruption in those industries.Positioning For The Next Catalyst
While the Magnificent 7 took most of the initial hit, the sell-off also creates two possible paths. The Nasdaq 100 is still more than 4% below its January highs as of this morning, and we are seeing demand for protective collars to hedge long-term tech holdings against further declines. On the other hand, for those who think the sell-off has gone too far, selling cash-secured puts on fundamentally strong but beaten-down software names could be a way to collect higher premiums. Next, the market’s direction will likely depend on upcoming economic data, especially after the softer readings from a couple of weeks ago. The key release is the January CPI inflation report due this Thursday, February 19, which could either ease concerns or make them worse. We expect stronger demand for short-dated options, especially straddles on the SPY, as traders prepare for a large move in either direction after the report. Create your live VT Markets account and start trading now.Rabobank says the ECB is letting non-euro central banks borrow euros, raising questions about the euro’s global role
Rabobank’s Global Daily report covers the European Central Bank’s decision to let all non-euro area central banks borrow euros against euro-denominated collateral. It says the move is meant to support the euro’s role outside the euro area.
The report raises a key question: is global use of the euro limited by supply or by demand? It also links the policy to the need for a bigger market in euro-denominated assets.
Euro Global Liquidity
It says the change could mean a larger European trade deficit. It also says it could push the euro exchange rate higher. The report notes that a stronger euro could be politically sensitive across euro area member states. The article also states it was produced with the help of an Artificial Intelligence tool and reviewed by an editor. The European Central Bank wants to raise the euro’s profile globally. By letting central banks outside the Eurozone borrow euros, it increases the euro’s global supply and makes it more attractive. This also signals that the ECB is comfortable with a stronger euro. For traders, this could support a long euro view in the coming weeks. With EUR/USD trading near 1.0850, this news could help the pair break above the 1.09 resistance seen last month. One way to position for this is to buy euro futures or call options to benefit from a potential move higher.Managing Political Risk
Options may be the better choice because of the political risks. Buying EUR/USD call options with a strike near 1.10 could let us benefit from a stronger euro while limiting losses if some member states push back. Uncertainty in countries such as Italy could also increase currency volatility. This policy points to a structural shift that could support a stronger currency over time. A stronger euro could move the region’s trade balance into deficit from the €15 billion surplus in the final quarter of 2025, because European exports would become more expensive for the rest of the world. The ECB’s motivation is clearer when we look at global reserve data from last year. In 2025, the euro made up just over 20% of central bank foreign currency holdings, while the US dollar was near 59%. This move appears aimed at narrowing that gap. We should watch for political pushback, since that is the main risk to this trade. In 2025, disagreements over fiscal policy created headwinds for the currency. Any strong opposition from a major member state could quickly reverse euro gains. Create your live VT Markets account and start trading now.Ahead of key events this week, markets remain calm as traders await developments in major currency pairs
Major currency pairs are holding familiar ranges as traders wait for key events and data this week. US stock and bond markets are closed for Presidents Day. In Europe, December industrial production data is due on Monday.
The USD Index ended last week lower after US inflation came in softer than expected. US CPI rose 2.4% year on year in January, down from 2.7% in December and below the 2.5% forecast. The USD Index is now near 97.00.
Markets Watching Data And Event Risk
CBS News reported that Donald Trump told Benjamin Netanyahu he would support Israeli strikes on Iran’s ballistic missile programme. Markets barely reacted, with WTI near $62.80. EUR/USD is trading in a narrow range above 1.1850 after a small weekly gain. An ECB speech from Joachim Nagel is due. Japan’s GDP grew at a 0.2% annual rate in Q4 after a 2.6% contraction in Q3, below the 1.6% forecast. USD/JPY is rebounding after nearly 3% losses last week. It is up 0.4% near 153.30. AUD/USD remains below 0.7100 ahead of RBA minutes, after a 25-basis-point rate rise to 3.85%. Gold ended last week higher but is trading below $5,000. UK jobs data and Canada’s January CPI are due Tuesday. GBP/USD is near 1.3650 and USD/CAD is around 1.3600.Options Volatility And Tactical Positioning
With US markets closed today, trading is thin. That can create chances to position for the week’s data releases. Implied volatility on major pairs has fallen to its lowest level since Q3 2025. EUR/USD implied volatility is below 6.5%. That makes options relatively cheap ahead of key inflation and employment data later this week. Last week’s softer US inflation print, down to 2.4%, matters. After the Federal Reserve raised rates aggressively through most of 2025, continued disinflation increases the chance that policy moves toward neutral. Consider put options on the US Dollar Index to position for further downside, as traders price out future rate hikes. The Iran headline is being ignored for now, but it is a classic tail risk. The 2024 supply chain disruptions showed how fast markets can reprice geopolitical shocks. Out-of-the-money call options on oil futures are a low-cost way to hedge against a sudden escalation. Japan’s weak GDP report would normally support yen strength, yet USD/JPY is higher this morning. That suggests last week’s drop may have been too sharp, but this rebound still looks questionable. Selling call options with strikes above 154.50 could be a sensible way to fade sustained upside. The Reserve Bank of Australia is one of the few central banks still raising rates, yet the AUD is not gaining momentum. The RBA minutes will be important. If they hint that a pause is coming, the market could move sharply. A strangle strategy—buying both a call and a put—can capture a breakout in either direction after the release. Gold has not been able to break above $5,000 even with a softer US dollar. That points to underlying weakness and limited demand for safety. For traders holding gold futures, selling covered calls can help generate income while prices consolidate. Create your live VT Markets account and start trading now.USD/CHF holds near 0.7700 as softer Swiss CPI reinforces expectations of a dovish SNB stance
USD/CHF traded near 0.7690 in early European trading on Monday, after opening above its previous close. The pair moved in a narrow range as the Swiss Franc stayed steady.
Swiss CPI inflation was 0.1% year on year in January, unchanged from December. This is at the lower end of the SNB’s 0%–2% price-stability range.
Swiss Inflation And SNB Signals
On a month-on-month basis, Swiss CPI fell 0.1%, compared with expectations of 0.0%. SNB President Martin Schlegel said the bank is willing to tolerate short periods of negative inflation, while staying focused on its medium-term goals. Schlegel also said that low inflation and a 0% policy rate put the SNB in a tough spot. After the data, expectations for a dovish SNB stance were broadly unchanged. USD/CHF could also come under pressure if the US Dollar weakens after softer US inflation data. US CPI rose 2.4% year on year in January, down from 2.7% in December and below the 2.5% forecast. US CPI rose 0.2% month on month, down from 0.3% and below the 0.3% expectation. CME FedWatch shows close to a 90% chance of no change in March, up from about 83% a week earlier. Markets are pricing a 25-basis-point cut in June at around 50.5%.Options And Forward Positioning
In early 2025, signs pointed to a more dovish Swiss National Bank as inflation hovered near zero. That pattern has mostly continued. The latest January 2026 CPI data from the Swiss Federal Statistical Office shows inflation at a muted 0.5% year over year. This reduces pressure on the SNB to tighten policy and helps keep the franc a low-yielding currency. The SNB’s steady and predictable approach, a trend we followed through 2025, has also kept implied volatility in CHF pairs relatively low. In this kind of market, buying USD/CHF call options can be a capital-efficient way to position for further upside. With option premiums still relatively cheap, the risk-to-reward profile can be attractive if the pair moves higher in the coming weeks. On the US side, the outlook has become more complicated than expected in early 2025. The Federal Reserve delivered two rate cuts in the second half of last year, but January 2026 US CPI came in hotter than expected at 2.8%. This “sticky” inflation has pushed traders to scale back expectations for more cuts, which supports the dollar. This policy gap—between a dovish SNB and a more cautious Fed—supports a continued uptrend in USD/CHF. The pair has climbed from around 0.7700 last year to about 0.8100 today. Traders may consider defined-risk strategies such as a bull call spread. For example, buying a 0.8150 call and selling a 0.8300 call for the April expiry could be a lower-cost way to target a gradual rise. Create your live VT Markets account and start trading now.EUR stays near 1.1865 against the USD as holiday-thinned trading precedes a week full of data releases
EUR/USD traded near 1.1865 on Monday and was mostly unchanged. The move came after weak Eurozone industrial production data and thin trading volumes.
Eurozone industrial production fell 1.4% in December, versus a 1.5% drop expected. November was revised down to 0.3% growth from 0.7%.
On a yearly basis, output rose 1.2%. That was below the 1.3% forecast and down from 2.5% in November. EUR/USD stayed stuck in its recent range.
Trading was quiet because many Asian markets, including Japan, were closed for the Lunar New Year. US markets were also shut for President’s Day.
Later, markets were set to hear from Federal Reserve Vice Chair for Supervision Michelle Bowman and ECB Governor Joachim Nagel. These speeches came before a busier week of data.
On the 4-hour chart, EUR/USD held above a rising trendline near 1.1855, with extra support at 1.1833. MACD sat just below zero, and RSI was just under 50.
A break below 1.1833 would put 1.1775 in focus. Resistance was seen at 1.1890, then 1.1925.
Looking back to this time last year, in February 2025, EUR/USD was steady near 1.1865 even as Eurozone factory output looked weak. Trading was also very quiet, helped by holidays in the US and Asia. That low-volatility setup is very different from today’s market.
The Eurozone’s underlying weakness seen in the December 2024 data has continued. The latest December 2025 figures show industrial production fell 0.7% month-on-month, according to Eurostat. This ongoing softness helps explain why EUR/USD is now struggling to hold above 1.09, far below the levels discussed a year ago.
In early 2025, attention was on softer US CPI data, which gave the Fed room to consider rate cuts. By February 2026, the picture has reversed. US inflation remains sticky, running at 2.9% year-on-year last month, which has kept the Fed on hold. At the same time, the ECB is sounding more open to cuts. This policy gap continues to pressure the euro.
For derivatives traders, this calls for a different playbook than last year’s range trading. With major inflation and jobs data due from both economies in the coming weeks, EUR/USD straddles may offer a way to benefit from a volatility jump, regardless of direction. Implied volatility is near 8.2%, well above the sub-6% levels seen in the quiet February 2025 period, suggesting traders expect larger moves.
The technical backdrop has also weakened a lot over the past year. The 1.1833 support level watched in February 2025 is now far above the market and would likely act as major resistance. Today’s key level is around 1.0850, and a clean break below it could lead to more selling.
USD/JPY rebounds to around 153.25, stays below the 200-day EMA, and recovers from 38.2% Fibonacci support
USD/JPY rose on Monday after weak Japan Q4 GDP data pushed the yen lower. A small lift in the US dollar and a better risk mood also helped the pair bounce from an over two-week low set last Thursday.
The pair stayed above the rising 200-day exponential moving average (152.54). It also rebounded near the 38.2% Fibonacci retracement of the April 2025 to January 2026 move, at 152.11.
Technical Levels Keep Bias Cautious
Different policy outlooks between the Bank of Japan and the US Federal Reserve capped further gains. A mixed technical setup also argues for caution. The MACD line remained below the signal line. Both stayed below zero, and the bearish histogram grew. The RSI was 38, under the midline, pointing to weak upside momentum. Resistance sits near the 23.6% retracement at 154.96. A daily close below 152.11 could open the door to a deeper pullback. A break above 154.96 could support more gains. Japan’s economy unexpectedly shrank by 0.4% in the final quarter of 2025. That helps explain why USD/JPY rebounded from below 152.50. Weak growth tends to hurt the yen because it reduces the chance that the Bank of Japan will tighten policy soon. We see this as the main reason the pair held firm at the start of the week. This differs from the United States. January 2026 inflation came in at 3.2%, a bit higher than expected. Sticky inflation keeps pressure on the Federal Reserve to hold rates where they are, which supports the US dollar. This policy gap is limiting upside in the pair and keeping a lid on the recent rebound.Options Strategies For A Range
For derivatives traders, this back-and-forth can favor range-bound strategies. With support near 152.11 and resistance near 154.96, selling an iron condor with strikes outside this area could be one way to collect premium. This works best if the pair stays between these levels in the weeks ahead. We are also watching the 200-day moving average near 152.54, which has acted as support during the pullback from the January 2026 highs. Selling put options around the 152.00 strike could offer bullish exposure while generating income. This is profitable if the pair holds above this key long-term support zone. However, bearish signals like the MACD suggest sellers are still active. A clean break below 152.11 could speed up the drop, which may make long puts appealing for downside exposure. A sustained move above 154.96 would instead suggest the uptrend seen through most of 2025 is returning, which would favor bullish approaches like buying calls. Create your live VT Markets account and start trading now.Geoff Yu says tighter global conditions and weaker risk appetite are pressuring EM carry and driving outflows
BNY says tighter global financial conditions and weaker risk appetite are pressuring emerging market (EM) FX carry trades. Positioning in carry trades seems to have peaked, and high-yielding currencies are seeing outflows.
Latin American currencies look especially vulnerable because holdings are high, which raises the risk of a sharp unwind. The report adds that further interest rate rises may be needed to reduce the chance of disorderly moves.
Global Portfolio Positioning And Allocation Trends
EM allocations in global portfolios remain low. The report notes that low weightings, cheaper valuations, and supportive exchange rates—especially in APAC—could help drive a gradual increase in allocations. The key factor to watch is US-driven changes in financial conditions. The report says support from expectations of US Federal Reserve easing may be close to its limit if US data strengthens. The outlook for FX carry trades is worsening as global financial conditions tighten. After January’s US jobs and inflation reports came in hotter than expected, markets have reduced expectations for near-term Federal Reserve rate cuts. That argues for caution when holding high-yielding EM currencies. We are most concerned about Latin American currencies, where our positions grew large after strong performance through much of 2025. The Mexican peso has already weakened beyond 18.00 per US dollar this month, a level not seen in about six months. That may be an early sign of an unwind. We should consider buying put options on the peso or the Brazilian real to hedge against a steeper drop.Positioning And Hedging Considerations
The main challenge for EM will be US-led adjustments. With the Fed likely to stay on hold, the US dollar may have more room to rise. The risk of a “disruptive unwinding” means we should expect higher volatility in these currency pairs in the coming weeks. Even so, we see better opportunities in Asia, where positioning is less crowded and valuations look more attractive. For example, India’s manufacturing sector remains strong, with January PMI rising to a four-month high of 56.9. This could support a strategy of being long selected Asian currencies while holding short positions in Latin America. Create your live VT Markets account and start trading now.FedEx shares closed higher at $374.72, beating broader indices as Nasdaq slipped despite S&P gains
FedEx (FDX) closed at $374.72, up 1.42% on the day. The S&P 500 rose 0.05%, the Dow gained 0.1%, and the Nasdaq fell 0.22%.
Over the past month, FedEx shares rose 17.98%. The Transportation sector gained 8.02% over the same period, while the S&P 500 fell 1.99%.
The next earnings update is expected to show EPS of $4.06, down 9.98% from a year ago. Revenue is forecast at $23.46 billion, up 5.89% versus the same quarter last year.
For the full year, analysts forecast earnings of $18.38 per share and revenue of $92.6 billion. That would be an increase of 1.04% in earnings and 5.32% in revenue compared with last year.
Over the past month, the consensus EPS estimate rose by 0.11%. FedEx has a Zacks Rank of #3 (Hold), on a scale from #1 to #5.
FedEx trades at a forward P/E of 20.1, in line with the industry average of 20.1. Its PEG ratio is 1.8, compared with the industry average of 1.87.
The Transportation – Air Freight and Cargo industry has a Zacks Industry Rank of 86, which puts it in the top 36% of 250+ industries. Zacks data shows that industries in the top 50% tend to outperform the bottom half by 2 to 1.
After an 18% jump over the last month, the stock could be more volatile going into earnings. Traders are weighing two forces: strong momentum versus a forecast near-10% drop in EPS. That mix increases the chance of a big move if results beat or miss expectations.
The broader economy also matters. January 2026 U.S. consumer spending came in stronger than expected, which supports the projected 5.9% revenue growth. Also, FedEx’s cost-cutting efforts during 2025 could help offset weaker profits. The market may focus more on improving efficiency than on the near-term dip in earnings.
Implied volatility in FedEx options is already rising. That means traders are pricing in a multi-percentage-point move after earnings. Historically, FDX has moved about 6% after earnings, though it dropped 11% after the earnings miss in Q3 2025. Because large swings are possible in either direction, strategies like long straddles or strangles may fit traders who want exposure to volatility.
If you expect the uptrend to continue, a bull call spread can be a lower-cost way to position for more upside while limiting risk. It’s often cheaper than buying calls outright, which matters when options are expensive. This approach fits a view that revenue growth and recent operational improvements will matter more than the expected drop in EPS.
On the other hand, the projected EPS decline could support bearish trades. Buying puts or using bear put spreads is a direct way to bet that the market will punish weaker profitability, especially after a sharp rally. This case would strengthen if competitors issue negative updates or if shipping volume forecasts are cut in the days ahead.
Sterling-dollar holds near the 20-day EMA at around 1.3640 as it awaits UK jobs figures for the December quarter
GBP/USD traded near 1.3640 in early European trading on Monday. Moves were muted as traders waited for UK labour market data due on Tuesday. The key period is the three months to December. The ILO Unemployment Rate is expected to stay at 5.1%, while Average Earnings Including Bonuses are forecast to rise 4.6% year on year.
Earlier this month, the Bank of England kept its policy rate unchanged at 3.75%. The vote split 5–4. The Bank also repeated that policy is likely to follow a “gradual downward path”.
