China’s year-on-year M2 money supply growth rose to 9% in January, beating forecasts of 8.4%
China’s M2 money supply rose 9% year on year in January, above the 8.4% forecast.
This means broad money grew faster than expected during the month. It was also 0.6 percentage points higher than the estimate.
In January, China’s new loans totalled 4,710B, missing analysts’ 5,000B forecast
China’s new yuan loans reached 4,710 billion in January. This was below forecasts of 5,000 billion.
The data shows lending was weaker than expected for the month. The report did not include additional figures.
Credit Demand Remains Soft
The weaker January loan figure suggests credit demand is not rebounding as strongly as expected at the start of the year. It also signals that both businesses and consumers are still cautious. We see this as a continuation of the slow momentum seen in the second half of 2025. This may add downside pressure on Chinese equities. Traders may consider buying put options on broad market ETFs like FXI, or shorting futures on the FTSE China A50 index. Bearish sentiment is also supported by last year’s weak profit growth. In 2025, the Hang Seng Index lagged global peers by more than 15%. Slower growth in China could also weigh on global commodities. Industrial metals such as copper, recently near $8,300 per tonne, may face headwinds. Short-dated futures or options, including on major mining stocks with heavy China exposure, can be one way to position for this risk. The data may also pressure the Chinese yuan. USD/CNH, which traded near 7.28 in late 2025, could try to move higher. Call options on USD/CNH offer a defined-risk way to trade a possible yuan decline. A weak credit reading increases the chance of near-term action from the People’s Bank of China. Watch for a cut to the Reserve Requirement Ratio (RRR) to add liquidity. Any announcement could drive short-term volatility, which may make straddles attractive for traders expecting a sharp move but unsure of direction.Lunar New Year Data Distortions
Credit data around the Lunar New Year can be uneven. In both 2024 and 2025, similar seasonal distortions made the underlying trend clearer only by March. Because of this, initial positions should be sized to allow for a rebound if later data comes in stronger. Create your live VT Markets account and start trading now.Danske Research expects eurozone Q4 2025 GDP to show 0.1% job growth, with mixed trends across countries
Danske Research Team expects the second estimate of euro area GDP growth for Q4 2025 to confirm a small rise in employment in the same quarter. The estimate should show how much employment changed in the final quarter of 2025.
National data suggest a mixed picture. Employment rose sharply in Spain, but fell slightly in France and Germany.
Based on this, Danske forecasts euro area employment growth of 0.1% quarter-on-quarter in Q4 2025. This points to small job gains alongside a cooling labour market.
The article says it was produced with the help of an artificial intelligence tool and reviewed by an editor.
The final data from late 2025 confirmed our view that the labour market is cooling. Euro area employment rose only 0.1% in the fourth quarter. The slowdown came from weakness in core economies like Germany and France, even as Spain held up better. This economic standstill creates a fragile backdrop as we move through the first quarter of 2026.
January inflation fell again to 2.5%. This reduces pressure on the European Central Bank to keep rates high. We see traders removing the chance of more rate hikes and starting to position for possible cuts in the second half of the year. This could support strategies like receiving fixed on interest rate swaps or buying futures that benefit if rates fall later in 2026.
For equity index derivatives, the flat growth outlook suggests limited upside for the EURO STOXX 50. The VSTOXX volatility index has recently dropped to 14, a low level that suggests complacency despite weak data last year. With volatility cheaper, it may be a good time to buy protection, such as out-of-the-money put options, against a potential downturn.
The gap seen last year—Spain’s labour market outperforming Germany’s—is a trend we expect to continue. Derivatives traders may consider relative value trades, such as going long Spanish indices and short Germany’s DAX. This can be done with futures or option spreads to focus on the performance difference between the two economies.
E-mini S&P March futures broke below 6920–6910 and now target support at 6860–6850, which may be a buying zone
Emini S&P March futures fell below 6920/6910 and dropped to 6860/6850. The day’s low was 8 points below this area, and there is still no clear rebound.
Longs at 6860/6850 are planned with stops below 6830. If the market breaks again and closes the week below 6830, that is a short-term sell signal. Targets would be 6815, 6790/85, and possibly 6752.
Lower down, support is at 6730/6700, with a suggested stop below 6705. If we rebound from 6860/6850, upside targets are 6880/6890. Above 6900, the next target is 6920/6925.
Emini Nasdaq March futures moved above 25390, then reversed from 25465. Price then broke below 24990/24900, and the stops below 24800 were triggered.
Downside targets are 24690/24630, and at the time of writing price was about 25 ticks away. Trend line support is at 24500/25400, with longer-term support at 24200/24000 and a stop level at 23850.
Resistance is at 25100/25200, with shorts using stops above 25250.
After last week’s hotter-than-expected January 2026 CPI report, Emini S&P futures broke below minor support at 6920. The market then reached our downside target and support zone at 6860/6850, and made a low just below it. So far, we have not seen a meaningful recovery.
The 6850 area is a key level for the next few days. Any longs need stops below 6830. The market appears to be pricing in the Fed’s message that rate cuts may be delayed. We have not seen this kind of mood since the Q3 2025 supply chain scare. A weekly close below 6830 would be a sell signal, with a likely retest of last week’s low at 6752.
If the weakness continues, focus on stronger support at 6700/6730 as a possible buying area. This zone is a more important longer-term value area. For now, if you go long near 6850, consider taking profits near the 6920/6925 resistance level before the weekend.
The Nasdaq has fallen more, which is common when rate worries return. The move above 25390 was a false break. The market quickly reversed and broke support at 24900. The sell-off triggered stops below 24800 and is now close to the first target at 24690/24630.
More downside is possible, especially with unemployment steady at a low 3.7%, which gives the Fed less reason to ease policy. That could pull the index down to the 18-month trend line near 24500. Longs there need stops below 25300.
If that trend line breaks, the next major support is 24000 to 24200. This area could support a larger rebound over the coming weeks. But after this breakdown, any short-term rallies are likely to stall at resistance at 25100/25200.
After weaker Swiss CPI, the US dollar rises modestly against the franc, trading above 0.7700 at 0.7714
The US Dollar edged higher against the Swiss Franc on Friday. It moved back above 0.7700 and traded at 0.7714. Even so, USD/CHF stayed within the last two days’ range and was still on track for a 0.5% weekly drop.
The Swiss Franc weakened after Swiss CPI data showed prices fell 0.1% in January, compared with forecasts for no change. Annual inflation held at 0.1%, matching expectations.
Swiss Inflation And SnB Policy
The inflation report increased focus on whether the Swiss National Bank could cut rates below its current 0% benchmark. Investors are now watching what the SNB may do next after this latest inflation reading. The US Dollar also got some support as equity markets reversed course after recent AI-driven moves. Traders stayed cautious ahead of US CPI data due later on Friday. US headline CPI was expected to rise 0.3% in January. Year-over-year inflation was forecast at 2.5%, down from 2.7% in December. The pressure on the Swiss National Bank we saw this time last year appears to be carrying into 2026. In January 2025, deflation fears pushed the SNB toward a more dovish tone. Now, January 2026 data shows Swiss annual inflation still stuck at a low 0.4%, keeping rate-cut pressure firmly in place.Trading Strategies For Usd Chf
The Federal Reserve faces a different backdrop. US CPI data for January 2026 showed inflation holding at 2.9% year over year. That is much stickier than the 2.5% rate many expected in early 2025. It suggests the Fed has less room for aggressive rate cuts. This widening gap—between a more dovish SNB and a more patient Fed—should keep the bias in favor of USD strength versus CHF. With that in mind, traders may look for USD/CHF to keep rising over the next few weeks. One direct way to express this view is to buy USD/CHF call options. CME Group data shows open interest in March-expiry calls with a 0.7800 strike is up 15% over the past week, pointing to rising bullish positioning. If you prefer a more conservative approach, selling out-of-the-money USD/CHF put options may be an option to collect premium. This strategy benefits if the pair moves sideways or rises, aligning with the view that strong CHF gains are less likely. Implied volatility has stayed fairly low, suggesting the market is not pricing in a sharp near-term drop. Create your live VT Markets account and start trading now.Molly Brooks of TD Securities says uncertainty centres on how many rate cuts the Fed will make, and when
TD Securities expects the Federal Reserve to keep interest rates unchanged for longer. That keeps markets focused on when cuts will start, and how many will follow. Current pricing implies 2bp of cuts in March 2026 and 5bp in April 2026. April pricing could still move higher.
Since 2025, market pricing has mostly lined up with FOMC outcomes, with errors of no more than 2bp. Over the past 5 years, when the Fed left rates unchanged, the average gap between market pricing and the decision was 0.6bp.
Market Focus Shifts To Path Of Cuts
Uncertainty has moved from the next Fed decision to the overall path of cuts in this cycle. The terminal rate has stayed near 3.1% since mid-2025. After the first cuts in 2024, Fed “holds” often made markets remove expected cuts from the next meeting, instead of pushing them out to later dates. Pricing for later meetings has been less reliable. Because the Fed uses limited forward guidance, it is harder for it to deliver a clear “dovish hold.” After decisions, meetings with higher implied cut probabilities usually saw bigger repricing. The Federal Reserve is signaling it will hold rates for longer. As a result, market uncertainty is now about when cuts will actually begin. For several months, the terminal rate has remained close to 3.1% (since mid-2025). This stability suggests the Fed is not in a hurry to cut.Trading Implications For April 2026 Pricing
Recent data supports the Fed’s cautious approach and reduces the chance of near-term cuts. The January 2026 Non-Farm Payrolls report showed 225,000 jobs added, while the unemployment rate stayed at 3.6%. The latest CPI report (January) also showed core inflation remains sticky at 2.9%, still above the Fed’s target. Right now, the market is pricing small cuts of 2bp for March and 5bp for April. With a strong labor market and persistent inflation, those expectations may be too aggressive. That creates a chance to fade any further rise in the odds of an April rate cut. We have seen a similar pattern since the first cuts in 2024. Through 2025, when the Fed held rates steady, it often struggled to sound dovish. That pushed markets to reprice future expectations. Markets also tend to move ahead of the data, pricing cuts before the numbers support them. In the coming weeks, one approach is to position for rates staying higher for longer than the market expects. This could mean selling derivatives such as SOFR or Fed Funds futures linked to the April 2026 meeting. The trade benefits if the market reprices to expect fewer, or no, cuts by then. Create your live VT Markets account and start trading now.In Spain, January’s annual consumer price index came in below forecasts at 2.3%, versus 2.4% expected
Spain’s consumer price index rose 2.3% year on year in January. That was below the 2.4% expected.
The data suggests inflation eased slightly versus forecasts. The release did not include further details.
Spain’s lower-than-expected January inflation (2.3%) suggests price pressures in the Eurozone may be cooling faster than markets expected. This supports the view that the European Central Bank (ECB) could shift to a more dovish stance sooner. For us, that means reviewing positions that are sensitive to ECB rate policy.
This report also follows last week’s data showing Germany’s manufacturing PMI still in contraction, at 48.2. The ECB remains focused on bringing headline inflation—2.7% in December 2025—back to its 2% target. Softer inflation in a major member like Spain strengthens the case for rate cuts.
In the coming weeks, we should consider positioning for lower rates later on the curve. Options include interest rate swaps that benefit from falling rates, or call options on government bonds such as German Bunds. Markets currently price about a 40% chance of a rate cut by the third quarter; this data could push that probability higher.
This shift could also weaken the euro, since lower rate expectations reduce a currency’s appeal. We could look at EUR/USD put options, with strikes below the current spot, to hedge or to position for a decline. A similar setup in the second half of 2025—after softer inflation data from France—was followed by a 2% drop in the euro over the next month.
We should also remember the false signals from mid-2025, when falling energy inflation was offset by sticky services inflation. The key near-term focus is the flash HICP inflation estimate for the full Eurozone, due in about two weeks. That release will help confirm whether Spain’s cooling is local or part of a broader trend.
Spain’s monthly harmonised consumer prices fell 0.8% in January, below forecasts of a 0.7% decline
Spain’s Harmonised Index of Consumer Prices (HICP) fell by 0.8% month on month in January.
This was below the expected fall of 0.7% for the month.
This morning’s data shows Spanish consumer prices fell more than expected in January. That supports our view that disinflation across the Eurozone is building. It also pushes back against the European Central Bank’s (ECB) cautiously hawkish tone in late 2025. The Eurozone’s January 2026 inflation flash estimate was already just below the 2% target. A weaker Spanish reading suggests the final Eurozone figure could come in even lower.
As a result, we expect the ECB to shift in a more dovish direction in the coming weeks. Traders may want to position for lower rates by buying Euribor-linked futures. There is a clear precedent: in 2014, persistently low inflation led the ECB into a more aggressive easing cycle than markets expected.
At the same time, policy is moving in the opposite direction in the United States. January job data still points to economic strength, which supports the Federal Reserve staying on hold. This widening gap should weigh on the euro. We view buying EUR/USD put options as a sensible way to benefit from this trend. The last time we saw a similar policy split in mid-2025, the euro fell by more than 3% over the following month.
For equities, lower borrowing costs are supportive. That makes European stocks more appealing and could draw more capital into the region. Buying call options on broad European indices, such as the Euro Stoxx 50, is one way to gain exposure to potential upside as policy becomes more accommodative.
Spain’s annual harmonised consumer inflation was 2.4% in January, below forecasts of 2.5%
Spain’s Harmonised Index of Consumer Prices (HICP) rose 2.4% year on year in January. This was slightly below the 2.5% forecast.
The update suggests inflation came in a bit cooler than expected. No other details were included.
Eurozone Disinflation Trend
Spain’s softer January inflation print (2.4%) supports the broader disinflation trend across the Eurozone. It also lines up with the latest Eurozone flash estimate, which showed headline inflation easing to 2.6%. Together, these readings add weight to the view that price pressures are starting to fade. As a result, markets are becoming more confident that the European Central Bank will start cutting rates. Interest rate swaps now price in more than a 60% chance of a 25 basis point cut by the June meeting. Expectations are shifting toward easier policy as the main market theme. For us, this argues for positioning for lower yields using interest rate futures. We are considering building long exposure through products such as Euro Schatz futures. This is a straightforward way to express the view that the ECB will respond to weakening inflation in the months ahead. We also expect the euro to weaken, as the rate gap with the U.S. may widen. The price action seen in 2024—when rate-cut expectations began to build—offers a clear example of how this can pressure the currency. We see buying euro put options against the dollar as a cost-effective way to position for a move lower.Equity Options Strategy
This backdrop can also support European equities. However, with volatility still low, outright long positions can be risky. The VSTOXX index is trading near 14.5, which makes long-dated call options on indices like the Euro Stoxx 50 more appealing. This approach keeps upside exposure to a potential rally while limiting downside risk. Create your live VT Markets account and start trading now.During European trade, GBP/USD is steady near 1.3600 support, maintaining a bullish bias within an ascending channel
GBP/USD traded near 1.3600 during European hours on Friday. The pair has moved quietly for four straight days. On the daily chart, it is still inside an ascending channel. Support sits near the lower boundary around 1.3580.
The 14-day RSI is 51, which is close to neutral after falling from overbought levels. The pair is below the nine-day EMA at 1.3632, but it remains above the rising 50-day EMA at 1.3524.
