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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Internet Computer Protocol (ICP) is trading well below its earlier highs. Since the November peak, ICP is down more than 76%. From the highs earlier this year, it is down over 52%. The article ties the drop to broader weakness in the crypto market and to Bitcoin’s decline. It notes that when Bitcoin falls, many other coins tend to fall too, and ICP followed the same pattern. It also points to a descending trendline drawn from the November highs to the highs made last month. This line is described as technical resistance that could influence the near-term price direction. A break above that trendline is presented as a possible shift in momentum. The piece says such a move could signal less selling pressure and renewed buying interest, creating room for a sharp rebound after a long decline. ICP is described as highly volatile since its peak. The article says trading assets like this depends on following price trends and managing risk, and that traders should wait for confirmation from actual price movement. We tracked Internet Computer Protocol closely throughout 2025 after its steep drop from the late-2024 highs. That period came with broad market weakness led by Bitcoin, which weighed on most altcoins. The main focus was a major descending trendline that repeatedly stopped every attempted rebound. The technical break we expected finally came in the third quarter of 2025 and gave a clear signal. As Bitcoin found a bottom and its market dominance briefly fell below 49%, money began moving back into higher-risk assets like ICP. This helped confirm that sellers were running out of strength, and buyers stepped in more decisively. In the coming weeks, derivatives traders should watch implied volatility, which is still high. Data from crypto analytics platforms shows ICP’s 30-day historical volatility is near 95%, much higher than Bitcoin’s 60%. That makes buying call options a costly way to get bullish exposure. A potentially better approach is a bull call spread. This means buying a call option and selling another call at a higher strike price. Doing both reduces the premium you pay and sets a clear maximum risk. It can work well in a high-volatility market when you expect a steady rise rather than a sudden surge. If you already hold ICP, consider using put options to help protect gains from the rally since last year. Because ICP has a history of sharp drawdowns, hedging can be a sensible risk tool. Recent on-chain data shows daily active addresses have risen about 15% since December 2025, which suggests growing network use. Even so, it does not remove the risk of a technical pullback.

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Nordea analysts Ole Håkon Eek-Nielsen and Jan von Gerich say the European Central Bank (ECB) did not worry about inflation falling below 2% or about recent foreign exchange moves. They say the ECB stayed on hold after its February meeting. They keep their forecast that the ECB will not change rates this year. They also expect the next move to be a rate hike in the second half of 2027. They note that the economy has held up well, and that there are now positive signs in German manufacturing. Over the next six months, they see a rate cut as more likely than a hike, but they say the chance of a cut is not very large. The article says it was produced with help from an Artificial Intelligence tool and reviewed by an editor. The ECB’s February message was steady and calm, which points to quieter markets. Eurozone inflation for January 2026 came in at 1.8%, so there is no urgent reason for the ECB to act. This suggests lower volatility in short-term rate markets in the coming weeks. The economy also looks stronger than many expected, which supports a wait-and-see stance. Recent PMI data showed German manufacturing moving back into expansion at 50.5. This is a clear improvement after much of 2025 was marked by contraction. This strength makes a near-term rate cut less likely. For traders, a stable central bank often means volatility selling may work over the next month or two. If rates stay in a narrow range, options on short-term interest rate futures (such as 3-month Euribor) may lose value over time. In that case, strategies like short straddles or short strangles could benefit from falling option premiums. Still, the analysts think a cut in the next six months, while unlikely, is more likely than a hike. Because the risks lean slightly toward lower rates, buying cheap out-of-the-money puts on interest rate futures could be a low-cost hedge. If the economy weakens more than expected, those puts could rise sharply in value. Further out, they still expect the next rate move to be a hike, but not until the second half of 2027. This implies a long period of little change, followed by a very slow move higher. Traders may want to align longer-dated positions with this eventual tightening, even if it is still far away.

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GBP/USD held near 1.3620 after the latest US inflation report pushed traders to raise the chances of a Federal Reserve rate cut in June. The pair was little changed on the day and was on track to finish the week up 0.12%. The US inflation data has changed our view. Prices rose just 0.1% month-on-month, below market forecasts. This makes it easier for the Fed to start cutting rates. Market pricing now puts the odds of a June cut above 75%. This shift is weighing on the US dollar. With this backdrop, we see room for more GBP/USD gains in the weeks ahead. One way to express this view is to buy GBP/USD call options that expire in late June or July. These would benefit if the exchange rate rises on expectations of easier Fed policy. We also need to account for policy divergence, which is a big change from most of 2025, when central banks largely moved together. UK inflation remains high—3.5% last month—well above the Bank of England’s target. That suggests the BoE may keep rates unchanged for longer. A softer Fed alongside a steadier BoE should support the pound. Still, upcoming data will matter, especially the next US non-farm payrolls report. A much stronger jobs reading could reduce expectations for a June cut and push implied volatility higher. Because of this, strategies such as bull call spreads may be a sensible way to limit cost and manage risk.

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Russia’s consumer price index (CPI) rose 1.62% month over month in January. Economists expected a 2% increase. The January figure was 0.38 percentage points below the forecast. In other words, monthly inflation was lower than expected.

Implications For Monetary Policy

January inflation came in at 1.62% instead of 2%. This suggests price pressures may be easing faster than expected. As a result, the Central Bank of Russia may feel less pressure to raise rates again from the current key rate of 15%. Markets may now focus more on when the bank could start cutting rates later this year. This could weigh on the Russian ruble, which has been supported by high interest rates. The ruble has recently been steady near 95 per U.S. dollar, but that stability could be tested if the rate advantage shrinks. Traders may increase positions that benefit from a weaker ruble, such as buying USD/RUB call options for the coming months. For bonds, the data is supportive. It suggests rates may be near a peak. In 2025, worries about stubborn inflation pushed government bond yields up sharply, which drove bond prices down. A lower inflation print may encourage traders to look for a rebound in Russian government bond (OFZ) prices, including through futures. The news can also help Russian equities. If investors expect lower borrowing costs, the outlook for company profits improves. The MOEX Russia Index has struggled to stay above 3,500 points, and many firms said in Q4 2025 that high financing costs were hurting results. This inflation reading may increase interest in call options on the index if markets begin to price in a more dovish central bank.

Market Positioning And Risk Sentiment

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Russia’s consumer price index (CPI) rose 1.6% month-on-month in January. This was below the expected 2.0% rise. The difference between the forecast and the actual result was 0.4 percentage points. Prices rose more slowly than expected.

Implications For Monetary Policy

January’s weaker inflation reading matters. A 1.6% month-on-month CPI versus a 2.0% forecast suggests the Central Bank of Russia’s tight policy may be starting to ease price pressure. This makes us rethink when rate cuts could begin. We should expect a more dovish tone in forward rate markets. The CBR has kept its key rate at a restrictive 14% since the last hike in October 2025. This CPI print could bring forward rate-cut expectations from the third quarter to as early as May. Traders may want to position in front-end interest rate swaps for a lower 2026 terminal rate. This shift in rate expectations also affects the ruble. A less hawkish central bank reduces the appeal of the RUB carry trade, which may weaken the ruble versus the dollar. We should consider buying USD/RUB call options. Implied volatility may rise ahead of the next CBR meeting, and spot could retest the 105 level seen last fall. This view is supported by other recent data. Rosstat’s January manufacturing PMI dipped to 49.1, the first reading below 50 in over a year, which signals slower growth. December 2025 industrial production rose only 2.2% year-on-year, below the 3.0% consensus.

Market Positioning And Risk Assets

Looking back to 2025, repeated rate hikes often capped the RTS Index and kept it below 1,300 for months. If policy shifts toward easing, that headwind could fade. Russian equity derivatives may look attractive again. We should consider long positions in RTS index futures to benefit from a potential policy pivot. In the next few weeks, the key driver will be comments from CBR officials ahead of the next meeting. Any statement that recognizes disinflation could act as a catalyst. We should also track weekly inflation numbers to confirm that January’s result was not a one-off. Create your live VT Markets account and start trading now.

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