Malaysia’s economy grew by 5.2% in 2025, up from 5.1% in 2024. Growth was helped by strong domestic confidence, AI-related investment, and supportive policy. This happened even as trade uncertainty increased due to US-led tariffs. Standard Chartered expects GDP growth to slow to 4.5% in 2026. This is close to the government’s forecast range of 4.0–4.5%. The slowdown is partly due to earlier front-loaded activity fading and tariff effects showing up later. The report highlights upside risks for 2026. These include ongoing AI-driven demand and strong local sentiment. It also points to better-than-expected growth in Q4. The report says the strong Q4 result may raise questions about whether Bank Negara Malaysia might reverse its pre-emptive rate cut from July 2025. However, it adds that mild inflation and external uncertainty could lead BNM to keep rates unchanged in the near term, while it reviews growth over the next 1–2 quarters. Because last year’s growth was strong, we think the Ringgit is well supported. GDP rose a solid 5.2% in 2025, led by a jump in AI-related investment and healthy domestic spending. This strength supports a positive near-term view for the currency. Recent data supports this view. Malaysia drew more than MYR 45 billion in new data center and AI-related foreign direct investment in the second half of 2025. Retail sales also rose 6.5% year-on-year in Q4, showing demand remained firm. Even with the strong end to 2025, we do not expect BNM to raise rates soon. It will likely avoid reversing the July 2025 cut right away. Instead, the central bank will probably wait to review the data over the next couple of quarters. Inflation supports this cautious stance. January 2026 inflation was a moderate 2.1%. This is similar to 2018–2019, when BNM kept rates steady for a long time after a cut to confirm the recovery was stable. Ongoing uncertainty from US-led tariffs also argues for patience. For derivative traders, this setup supports selling USD/MYR volatility. With strong fundamentals but a central bank that is likely on hold, the Ringgit may rise slowly rather than surge. One way to express this view is to sell out-of-the-money USD/MYR call options to earn premium in a steadier market. In rates, a “BNM on hold” view should keep the front end of the yield curve stable. This suggests markets may be overstating the chance of a near-term hike. Positioning in short-term interest rate swaps for a steady policy rate could therefore make sense.

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Baker Hughes said the US oil rig count fell to 409, down from 412. That is a drop of three rigs from the previous report.

Us Oil Rig Count Slips

The number of active oil rigs in the US has slipped to 409. It is a small move, but it matters. Fewer rigs can mean slower growth in US oil output. It also fits the “capital discipline” trend producers followed through most of 2025. This drop comes as new government data showed a bigger-than-expected fall in crude inventories. Stockpiles fell by almost 3 million barrels last week. The market is already tight. With fewer rigs running, less new supply is likely to arrive over the next three to six months. Together, these signals support oil prices. In 2025, producers often chose to return cash to investors instead of ramping up drilling, even when prices were strong. The latest rig count suggests that approach is continuing into 2026. With global demand forecasts still firm—especially in developing economies—slower US supply growth could have a real impact. For traders, this points to a bullish medium-term view. One way to position for higher prices is through call options or bull call spreads on WTI futures, especially for contracts that expire in late spring. These tools can capture upside while helping limit risk. Still, global events could change the picture fast. A surprise production increase from OPEC+ or clear signs of weaker global growth could pressure prices. Keep a close watch on news from Vienna and key economic data from China.

Key Risks To Watch

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India’s CPI inflation, using the rebased 2024 series, rose to 2.8% year-on-year. Food prices were the main driver. At 2.8%, inflation was within the Reserve Bank of India’s 2% to 6% target band. This supported keeping interest rates unchanged at the RBI’s April policy meeting.

Inflation Backdrop And Policy Implications

The article says it was created with help from an artificial intelligence tool and then reviewed by an editor. In early 2025, inflation in India was calm. CPI came in at a mild 2.8% year-on-year. This was comfortably inside the RBI’s target band, so the central bank had room to keep rates steady. With policy more predictable, rate markets also saw less volatility. In February 2026, the picture is very different. Price pressures are rising. The January 2026 CPI report showed inflation picking up to 5.1%, driven by higher global energy prices and still-high domestic food inflation. That puts inflation much closer to the RBI’s 6% upper limit and shifts attention toward possible tightening. This trend is also backed by strong growth. Latest data shows GDP growth for Q3 of FY 2025–26 was 7.8%. Solid growth can lift demand, which can add to inflation pressure. That strengthens the case for the RBI to consider rate hikes to cool the economy. The RBI’s tone has also become more cautious, with more emphasis on bringing inflation back toward the 4% midpoint.

Trading Considerations For Rates And Volatility

For derivative traders, last year’s “stable rates” approach may no longer work. It may now make more sense to position for a more hawkish RBI, using tools such as Overnight Index Swaps (OIS). Paying fixed on one-year OIS is a direct way to express a view that the RBI will raise rates within the next 12 months. Uncertainty about when hikes happen—and how large they are—can also push volatility higher. That can create opportunities in options on 10-year government bond futures. Buying straddles or strangles can benefit from a big move in bond prices, whether bonds fall on a hike or rally if the RBI unexpectedly holds rates. Create your live VT Markets account and start trading now.

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US Treasury Secretary Scott Bessent said he does not want the US to decouple from China. Instead, he wants to reduce risk in the relationship. He also said there is a good chance US GDP growth in 2025 will be 3%. Bessent said the bond market is “so tame” because the government is “sorting the fiscal house”. He also said inflation could move back close to the Federal Reserve’s 2% target by the middle of this year. If inflation moves toward the Fed’s 2% target by summer, traders should expect a change in monetary policy. The January 2026 CPI report showed inflation easing to 2.4%. This supports the view that rate cuts could be coming and helps explain the strong activity in interest rate derivatives. We think trades that can benefit from future rate cuts, such as buying SOFR futures, look more attractive. The bond market is calm, and that creates an opportunity if the fiscal outlook is truly improving. The 10-year Treasury yield has stayed in a tight range near 3.6%. That is very different from the big swings in 2023 and 2024. This may make call options on long-duration bond ETFs more appealing, especially if the market starts to price in rate cuts in the second half of the year. With 2025 GDP growth coming in strong at 3.1%, the risk of a near-term recession looks much lower. That backdrop can make selling out-of-the-money put options on major indexes like the S&P 500 an attractive way to collect premium. Demand for downside protection also appears to be falling as growth stays firm. Steady growth and cooling inflation could keep volatility low. The VIX is trading near 14. That suggests investors feel relatively calm, at levels not seen since before the early-2020s inflation surge. Traders may want strategies that do well when volatility stays low or falls further, such as selling VIX call spreads. The push to de-risk from China, rather than decouple, is still creating clear winners and losers. That argues for selective sector trades instead of broad market bets. Options can be used to gain exposure to US-focused semiconductor and industrial ETFs, which may benefit from reshoring policies.

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The Dow Jones Industrial Average rose about 220 points on Friday to near 49,665 after opening at 49,366. This followed a 669-point drop on Thursday. The S&P 500 was slightly higher, and the Nasdaq Composite was mixed. All three indexes were still on pace for weekly losses, and the S&P 500 was on track for its worst week since November. US CPI rose 0.2% month over month in January, below the 0.3% forecast. It rose 2.4% year over year versus 2.5%, down from 2.7% in December. Core CPI rose 0.3% month over month and 2.5% year over year. CME FedWatch put the odds of a June rate cut at about 83%, up from below 50% earlier in the week. Money markets priced about 63 basis points of Federal Reserve cuts for 2026. That equals about a 50% chance of a third cut by December. A leadership change is expected in May, with Kevin Warsh seen as likely to replace Jerome Powell. Applied Materials jumped about 12% after posting adjusted EPS of $2.38 on $7.01 billion in revenue, beating estimates of $2.20 and $6.87 billion. It also forecast more than 20% growth in semiconductor equipment this year. Rivian rose more than 20% and guided 2026 deliveries of 62K to 67K, up from 47K to 59K in 2025. Roku gained about 10% and guided 2026 revenue of $5.5 billion versus $5.34 billion. Pinterest fell more than 20% after guiding Q1 revenue of $951 million to $971 million versus $981 million expected. DraftKings dropped about 17% after guiding 2026 revenue of $6.5 billion to $6.9 billion versus $7.31 billion expected. The Dow’s 50-day EMA is 48,852 and its 200-day EMA is 46,472. Stochastics are at 73.67/76.23. Resistance is 50,509 and support is 49,092. With January inflation coming in at a mild 2.4%, we believe the Federal Reserve has a clear path to start cutting rates. The jump in June-cut odds to 83% is a strong signal to prepare for easier policy. We should consider buying call options on broad market indexes, such as the SPDR S&P 500 ETF (SPY). We can target expirations in the third quarter to benefit from a likely easing cycle. This setup looks similar to the pivot in late 2023, which helped drive a strong rally into 2024. When the CME FedWatch tool shifts this sharply, it often makes sense to reduce defensive positions. The expected Fed leadership change in May adds uncertainty. Still, soft inflation data may push the new Chair to follow the market’s expected path toward rate cuts. The market is split, and we should trade that gap. We should add to bullish semiconductor positions using call options on names like Applied Materials, which benefit directly from AI infrastructure spending. Data from last year showed global semiconductor sales rose by more than 13% after a slump in 2024, and this trend appears to be strengthening into 2026. At the same time, we see pressure on consumer-focused digital platforms, as shown by weak guidance from Pinterest and DraftKings. This creates a chance to buy put options on ad-driven and discretionary-spending companies. Even if the Fed cuts rates, ad budgets may not rebound right away, which supports these bearish trades. Recent swings have been large, with the Dow moving nearly 700 points in one day. We expect implied volatility to fall as the Fed outlook becomes clearer. We can try to benefit from that by selling VIX call spreads or buying VIX put options. A lower “fear gauge” would fit with less uncertainty about interest rates. Using the technical levels above, we can set up trades with clear risk limits. Selling cash-secured puts near the Dow’s support area around 49,000 could help us collect premium while staying bullish to neutral. If the index fails to hold that level, we should treat it as a signal to recheck and possibly reduce our bullish exposure.

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ING expects inflation in the Czech Republic to slow in 2026 as food price growth cools. Headline inflation is forecast to fall to around 1% in the summer. Core inflation is expected to ease in the second half of the year. Core inflation is estimated at 3% year on year at the start of the year. Imputed rents rose 5.1% year on year in January, helped by higher prices for new homes.

Inflation Split In January Data

January’s numbers show a clear split. Goods prices fell 0.4% year on year. Services prices rose 4.7% year on year. Sticky services inflation is one reason the Czech National Bank (CNB) may avoid easier policy, even if headline inflation stays below target. Markets see about a 55% chance of one rate cut between May and August, and a 45% chance of no change. If the CNB does not cut, the base rate could stay at 3.5%. A cut in May is possible if forecasts for weaker core and services inflation come true. If policymakers want more confirmation, the June or July inflation reports may shape the decision. July data should be available in early August. The January 2026 data underline this split. Headline inflation is low at 1.8%, but core inflation remains high at 2.9%. With services prices rising 4.7% year on year, the CNB is staying cautious.

Market Pricing And Policy Timing

This is similar to late 2025, when the CNB paused its easing cycle because of concerns about wage growth and services inflation. At the early February meeting, the board kept the same message: there is no rush to act, even with weak GDP growth of 0.3% in Q4 2025. The bank is focusing on inflation rather than boosting the economy. For derivatives traders, timing matters. A 55% chance of a cut is close to a coin flip. This means koruna options, especially around the May and June meetings, may need to price in higher uncertainty. The main point is that the CNB does not feel forced to cut, even as the ECB looks more dovish. That can support the koruna because it still offers a yield advantage. We think forward rate agreements may be pricing in too much easing, which could create trades that expect rates to stay at 3.5% through the summer. Create your live VT Markets account and start trading now.

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The Japanese Yen rose against the US Dollar on Friday. The Dollar gave back earlier gains after softer US inflation data. USD/JPY traded near 152.85, down from an intraday high of 153.78, and was on track for a weekly loss of almost 2.7%. US January headline CPI rose 0.2% month-on-month, below the 0.3% forecast, and down from 0.3% in December. Annual CPI slowed to 2.4% year-on-year, below the 2.5% forecast and down from 2.7%.

Us Inflation Surprise Drives Dollar Pullback

Core CPI rose 0.3% month-on-month, matching forecasts and up from 0.2% previously. Annual core CPI held at 2.5%, in line with expectations and down from 2.6% in December. Markets raised expectations for Federal Reserve easing later in the year. Pricing suggested about 61 basis points of rate cuts in 2026, up from roughly 58 basis points before the CPI report. The Yen also found support after Japan’s Prime Minister Sanae Takaichi won the election by a wide margin. Finance Minister Satsuki Katayama said debt-to-GDP is expected to fall further, and that markets steadied after an initial shock tied to plans to cut the consumption tax on food. BoJ board member Naoki Tamura said the Bank of Japan expects to keep raising rates as growth and prices improve, while avoiding tightening too early. He said consumer inflation is stabilising, but warned about risks from renewed Yen weakness.

Policy Divergence Supports Yen Strength

January’s softer US inflation reading is an important signal. With headline CPI easing to 2.4%, the case for the Federal Reserve to start cutting rates looks stronger. This supports the view that the Dollar may have already peaked for the year. In 2025, core inflation stayed stubbornly above 2.7%, so this drop matters. Alongside January US retail sales, which unexpectedly fell 0.5%, the data points to a cooling US economy. Markets are now pricing in more than 60 basis points of Fed cuts this year. Japan, meanwhile, has a clear driver for Yen strength. Prime Minister Takaichi’s landslide win, and the biggest majority in more than a decade, has reduced political uncertainty and improved investor confidence. It also gives the government a stronger mandate to pursue pro-growth fiscal policy. This stability supports the Bank of Japan’s gradual move toward policy normalisation. Tokyo core CPI, a key leading indicator, has stayed above 2% for nearly two years. BoJ board members are now openly discussing further rate hikes from the current 0.25%. We expect this gap—Fed cuts versus BoJ hikes—to remain the main theme. For derivatives traders, this could mean higher USD/JPY volatility after a period of consolidation in late 2025. Positioning for more Yen strength through options may be sensible. One approach is to buy JPY call options or set up bear put spreads on USD/JPY to benefit from a move lower. The profitable Yen carry trade also looks less attractive as the US-Japan rate gap narrows. If traders unwind long USD/JPY positions, that could add more downward pressure on the pair. We are watching futures and forwards for a possible move toward the 148–150 area in the months ahead. Create your live VT Markets account and start trading now.

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USD/CAD stayed in a narrow range on Friday. The US Dollar held firm even though US inflation data came in softer. The pair traded near 1.3625, up slightly and rising for a third day in a row. New US data increased expectations that the Federal Reserve could cut rates later this year. CPI rose 0.2% month-on-month in January. That was down from 0.3% in December and below the 0.3% forecast. Headline CPI slowed to 2.4% year-on-year from 2.7%, missing the 2.5% forecast. Core CPI rose 0.3% month-on-month, matching expectations and up from 0.2%. Core CPI eased to 2.5% year-on-year from 2.6%. The Canadian Dollar weakened a bit after reports that President Donald Trump is privately considering pulling the US out of the USMCA. There has been no official confirmation. The US Supreme Court set 20 February as its first opinion day in a case tied to the legality of Trump-era tariffs. Lower oil prices also pressured the Canadian Dollar. Crude prices often affect Canada’s export income and demand for the loonie. WTI traded near $62.56 after hitting about $65.64 earlier in the week. Next week, attention turns to Canada’s CPI for clues about the Bank of Canada’s next move. Markets are weighing whether rates could rise later this year or remain on hold. As of today, February 13, 2026, the setup looks different from this time last year. In early 2025, markets expected Fed rate cuts because inflation was cooling. At the same time, the Canadian dollar was unusually weak due to USMCA trade risks. That mix kept USD/CAD stuck in a tight, uncertain range near 1.3625. Now the story has changed. The latest US Consumer Price Index for January 2026 was hotter than expected at 3.1% year-over-year. This has pushed the Federal Reserve to keep its policy rate at 4.25% and reject market hopes for a spring rate cut. That is a sharp contrast with January 2025, when inflation printed at 2.4% and supported easing expectations. Canada is seeing a similar, but milder, inflation backdrop. January CPI is 2.9%, and the Bank of Canada is holding its key rate at 4.00%. That leaves a 25-basis-point rate advantage for the US dollar. This gives USD/CAD a basic tailwind that was not there last year. Also, with WTI now stronger near $78 a barrel, weak oil is no longer a major drag on the loonie. As a result, the rate gap is the main driver. In this environment, traders may look for more USD/CAD upside in the weeks ahead. One defined-risk approach is to buy March USD/CAD call options with a strike near 1.3700. This targets gains if the pair moves higher because the US-Canada rate gap stays wide. It is a direct bet that the Fed remains more hawkish than the Bank of Canada through the first quarter. If you expect bigger swings around upcoming central bank messages, a long straddle may fit better. This means buying both a call and a put with a March expiry. It can benefit from a large move in either direction. This could be useful if next week’s Canadian retail sales data is a major surprise and forces the market to rethink its current view.

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NatWest released its full-year results after announcing the £2.7bn purchase of wealth manager Evelyn Partners earlier this week. The shares fell to their lowest level since October 2025 and tested the 200-day SMA, after starting February above 700p. Net interest income rose 13.8% year on year to £12.8bn, while total income increased 13.2% to £16.64bn. Total profits climbed 21.3% to £5.83bn, even though annual impairments jumped 86.9% to £671m. Net interest margin rose 21bps to 2.34%, despite a lower rate environment. For 2026, NatWest expects total income of £17.2bn to £17.6bn and ROTE above 17%. A final dividend of 23p per share took the total dividend for the year to 32.5p, up 51% on 2024. The share price drop has been linked to concerns about the Evelyn Partners deal and smaller share buybacks. There is a clear gap between NatWest’s strong results and its current share price, which has fallen to the 200-day moving average. When solid fundamentals clash with negative sentiment, it can create opportunities in the derivatives market. Here, the slide looks driven by short-term worries that the Evelyn Partners deal will reduce buybacks. The bank’s 2026 guidance is very strong, with a Return on Tangible Equity (ROTE) target above 17%. For context, in 2023 and 2024, major UK banks often struggled to stay consistently above 12–14% ROTE. That makes NatWest’s target stand out. Markets also tend to punish big acquisitions in the short term, as happened with several large financial mergers in the early 2020s. If a trader thinks this sell-off is an overreaction, one approach is to sell out-of-the-money puts with strike prices near or below the October 2025 lows. This collects premium while relying on the view that the earnings report and guidance will support the share price. The aim is for the options to expire worthless if the stock stabilises and rebounds. This situation has likely lifted implied volatility in NatWest options. Higher volatility usually means higher option premiums, which can make strategies like cash-secured puts or bull put spreads more appealing in the coming weeks. In simple terms, traders may be paid to wait for sentiment to catch up with the company’s performance. More aggressive traders could consider buying call options, aiming for a sharp reversal once the market focuses less on buybacks and more on the long-term value of the wealth management acquisition. A bounce from a key level like the 200-day SMA—especially after strong results—can happen quickly. This approach would benefit from a move back towards the 700p level seen earlier this month.

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Equifax, Inc. (EFX) closed at $188.18 after a sharp drop. This move comes after the stock broke a multi-year uptrend on the daily chart. Starting in late 2023, the share price climbed along a rising trendline for almost two years. It reached highs a little above $309 by mid-2024, and the trendline held up the price on several pullbacks. After the breakdown, that same trendline is now above the stock and may act as resistance. The fall from just over $309 to $188.18 is about 39%. The price now sits between that overhead trendline and a support level at $159.93. The move from $188.18 down to $159.93 is about $28, or close to 15%. For a recovery, EFX would likely need to move back above the rising trendline. If it cannot break above that level, a decline toward $159.93 is still possible. Trading choices may come down to whether the stock retakes the trendline or breaks below $159.93. Volume and momentum are important to watch during any pause or further selloff. With Equifax breaking its multi-year uptrend, the stock looks fragile at $188.18. For derivative traders, the near-term focus is clear: strong resistance overhead from the old trendline, and key support near $159.93. Over the next few weeks, the market may force a decision between betting on more downside or trying to buy a rebound after a steep selloff. The bearish view is supported by recent economic data showing rising consumer stress. U.S. credit card balances reportedly climbed above $1.1 trillion by the end of last year. Serious auto-loan delinquencies have also risen to levels not seen since the mid-2000s. If consumers pull back, Equifax could see weaker demand for credit inquiries and data products, which makes a test of $159.93 look more likely. For traders expecting more downside, buying put options with March or April expirations and strikes like $175 or $170 is one direct way to trade the move. Another approach is selling call credit spreads with short strikes above the broken trendline, possibly around $200. This strategy can profit if EFX stays below resistance, helped by time decay and any further decline. On the other side, traders who think the 39% drop is too large may see a chance for a rebound. Selling cash-secured puts with a $160 strike is a more conservative bullish idea. It collects premium now and only requires buying the stock if it falls to that major support level, which can act as a lower entry point. A more aggressive bullish idea is buying call options, but implied volatility is likely higher after a sharp selloff, which can make calls expensive. In similar drops during 2024 and 2025, buying calls right after a plunge often required very good timing because premiums were elevated. A call debit spread may be a better fit, since it reduces upfront cost and caps risk if the stock does not bounce quickly.

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