America’s four-week Treasury bill auction yield stays at 3.63%, signalling unchanged short-term borrowing costs
The United States sold 4-week Treasury bills at an auction yield of 3.63%. The yield was unchanged from the prior auction.
This result points to stable short-term borrowing costs for the US Treasury over the four-week term. The report did not include additional details.
Strong US jobs data dampens rate-cut hopes, pushing silver down near $82.85 after a weekly peak of $86.30
Silver fell on Thursday, trading near $82.85, down 1.95% on the day. The metal pulled back after hitting a weekly high of $86.30, following a rebound from last week’s lows near $64.00.
US labor data slowed silver’s recent rise. Bureau of Labor Statistics figures showed January Nonfarm Payrolls increased by 130K versus 70K expected, while the Unemployment Rate dipped to 4.3%.
Fed Policy Expectations
The data lowered demand for near-term rate cuts. Federal Reserve officials have also said inflation is still above target, supporting the case for keeping rates restrictive in the near term. Markets still price in close to 50 basis points of rate cuts by year-end. This has helped limit further declines in silver. The US Dollar struggled to extend its rebound on Thursday, which supported precious metals. Geopolitical risk and uncertainty about the timing of any Fed shift have kept price swings elevated. Silver prices can be influenced by interest rates, the US Dollar, and investor demand through products such as Exchange Traded Funds. Industrial demand (including electronics and solar), mining supply, recycling, and moves in gold prices can also affect silver.Looking Back And Ahead
This time last year, in early 2025, a strong jobs report briefly pushed silver down from above $86. The drop happened because markets worried the Federal Reserve would delay interest rate cuts. It was a short-term dip within a broader bullish trend. Now, on February 12, 2026, the labor market looks softer. The latest January 2026 report showed Nonfarm Payrolls rising by a more modest 95,000, while the unemployment rate ticked up to 4.5%. Unlike last year’s strong data, this cooler report is bringing back expectations of a Fed pivot sooner rather than later. Even so, inflation remains sticky. The latest January 2026 Consumer Price Index showed inflation at 2.9% year over year. This is keeping the Fed cautious after a single 25-basis point cut in late 2025. With policy still uncertain, volatility in silver is likely to stay high in the coming weeks. One major support for silver is strong industrial demand, especially from green energy. Global solar panel manufacturing accelerated through 2025 and now accounts for a record share of silver demand. This creates a stronger fundamental floor than we saw early last year. For derivatives traders, this setup favors strategies that can benefit if prices rise, while still protecting against Fed-driven risk. Interest has increased in call options with strike prices above $95 for late-spring expirations. At the same time, protective put options can help hedge against unexpectedly hawkish policy comments. The Gold/Silver ratio has also tightened, trading near 75:1, down from highs above 85:1 seen during parts of 2025. This suggests silver has been outperforming gold. If industrial demand stays strong, that trend may continue. For traders, long silver versus short gold pair trades may be appealing because they focus on silver’s industrial drivers. Create your live VT Markets account and start trading now.Sterling rises against the dollar as weak US jobless claims offset subdued UK GDP data
GBP rose against the US Dollar in Thursday’s North American session after fresh US jobs data weakened the USD. This came even after a strong Nonfarm Payrolls report the day before.
UK growth was weaker than expected, but the Pound still held onto its gains. GBP/USD traded at 1.3664, up 0.28%.
Relative Surprises Drive Currency Moves
Looking back at 2025, the Pound rose against the Dollar even though UK GDP was weak. Markets paid more attention to unexpectedly high US jobless claims, which pushed the Dollar lower at the time. This shows that short-term currency moves often come from data surprises, not just overall economic strength. Now the story has changed. The main driver is a clearer split in central bank policy. The Bank of England has stayed cautious, keeping its bank rate at 4.5% at its last meeting. The US Federal Reserve has signaled a pause in its easing cycle. This policy gap is now the key driver for GBP/USD, which is trading much lower—around 1.2850. Recent Office for National Statistics data showed UK Q4 2025 GDP growth at a weak 0.1%, confirming a soft domestic backdrop. By comparison, the latest US GDP report showed 1.9% annualized growth, supporting the Dollar. This broader economic picture is weighing on Sterling more than short-term shifts in labor data. For derivatives traders, this points to continued pressure on the Pound. Implied volatility in GBP/USD options has been rising, with three-month contracts recently at 8.9%. This reflects uncertainty about the Bank of England’s next move. One approach is to buy put options to hedge risk—or to position for a break below the key 1.2800 support level.Labor Markets Remain A Key Watch
Labor markets still matter, since they were the main focus in the 2025 report. Last week, US jobless claims dropped to 205,000, a very low level that suggests the US labor market remains tight. This contrasts with the UK unemployment rate, which has edged up to 4.4%. That gap supports the case for a firmer Dollar in the weeks ahead. Create your live VT Markets account and start trading now.Nordea’s Helge J. Pedersen says Denmark’s inflation fell to 0.8%, boosting purchasing power amid tax cuts
Danish inflation dropped to 0.8% year-on-year in January, down from 1.9% in December. The fall was driven by a large cut to the electricity tax and lower prices for goods.
The electricity tax was cut to almost 1 øre per kWh (including VAT), from 90 øre previously. Core inflation also eased, falling to 1.9% in January from 2.3% in December.
Key Drivers Of The Inflation Drop
Denmark’s EU-harmonised inflation rate was 0.6% in January. By comparison, the eurozone inflation rate was 2.3% in December. More disinflation is expected as further tax changes take effect. In July, taxes on products such as coffee, chocolate, and sugar items are set to be removed. These changes are expected to reduce inflation by about 0.8 percentage points in 2026 compared with 2025, when inflation was 1.9%. With inflation near 1% this year, purchasing power is expected to rise by around 2% for most people. The article also highlights tax reform and new compensation for families most affected by high food prices. These measures should help support purchasing power and private consumption over the coming year.Market Implications For Rates Currency And Equities
The drop in Danish inflation to 0.8% is an important development for the weeks ahead. We view it as a clear sign that household purchasing power is improving, which supports the case for a strong domestic economy. Because this disinflation is driven by policy, it is likely to be more predictable than moves caused by markets. This also widens the gap with the eurozone, where inflation was 2.3% in December 2025. With Danmarks Nationalbank’s policy rate at 3.50% and the ECB’s at 3.75%, pressure may grow to keep Danish rates lower to support the DKK peg. The widening rate difference is a key point for currency and rates traders to watch. For equity derivative traders, this outlook supports companies that depend on Danish consumers. The OMX Copenhagen 25 index, up 3.5% so far this year, could rise further if consumption remains strong. We see potential opportunities in call options on retail and consumer discretionary stocks, given the expected lift to spending. A mix of predictable disinflation and steady growth also points to lower market volatility. Consumer confidence data from January, which hit its highest level since Q3 2025, supports this view. Selling volatility on Danish indices could therefore be a workable near-term strategy. Looking ahead, the additional tax cuts planned for July on items like coffee and sugar should strengthen this trend. This suggests the current market backdrop—supported by strong domestic demand—could continue through the second quarter. We should therefore position for a sustained period of Danish outperformance versus European peers. Create your live VT Markets account and start trading now.EUR/USD rebounds as the euro recovers against a weakening dollar, ending losses and trading near 1.1883, up 0.10%
EUR/USD ticked higher on Thursday, ending a two-day slide. It traded near 1.1883, up about 0.10%. The US Dollar Index was around 96.80, close to two-week lows, as markets waited for US CPI data due on Friday.
US data showed Initial Jobless Claims fell to 227K from 232K, but came in above the 222K forecast. Continuing Claims rose to 1.862 million from 1.841 million. January Nonfarm Payrolls rose by 130K versus a 70K forecast, and the Unemployment Rate eased to 4.3% from 4.4%.
Fed Policy And Dollar Outlook
Markets were pricing roughly 50 basis points of Fed rate cuts in the second half of the year. Kansas City Fed President Jeffrey Schmid said inflation is near 3% and that policy should stay restrictive. In the Eurozone, attention turns to Q4 preliminary Employment Change (QoQ) and GDP data due on Friday. A Reuters poll dated February 9-12 found that 66 of 74 economists expect the ECB deposit rate to hold at 2.00% through 2026, with no change expected before 2027. The euro is used by 20 EU countries. In 2022, it made up 31% of global FX turnover, with average daily volume above $2.2 trillion. EUR/USD accounts for about 30% of all FX transactions. The picture on February 12, 2026 looks very different from market sentiment in 2025. The US Dollar is no longer weak. The Dollar Index (DXY) is trading firmly near 104.50, far above the 96.80 level seen last year. Much of this strength comes from a Federal Reserve that has kept interest rates steady.Derivatives Positioning And Risk Factors
The 50 bps of easing that markets expected in 2025 did not happen. Inflation stayed stickier than forecast. January’s CPI report, released yesterday, showed core inflation holding at 2.8%. This keeps pressure on the Fed to remain restrictive. The Fed funds rate is currently 4.75% to 5.00%, which supports the dollar because it offers higher yield. The Eurozone story is different. Growth has been weak. Final Q4 2025 GDP confirmed only 0.1% quarterly growth. The European Central Bank has also been more cautious than the Fed, keeping its deposit rate at 3.25%. This policy gap is a key reason EUR/USD is under pressure. The pair now trades near 1.0550, well below the 1.1883 level discussed at the same time last year. For derivatives traders, this backdrop still supports strategies that position for euro weakness. One approach is to buy EUR/USD put options, especially with strikes below 1.0500, to target more downside from the rate gap. The latest US January Nonfarm Payrolls report, which showed 195,000 jobs added, also strengthens the case for a resilient US economy and a firm dollar. Given the policy split, another strategy is to sell out-of-the-money EUR/USD call options to earn premium, since a large rally may be hard to sustain without a clear shift from the Fed or the ECB. Traders should still watch for softer US labor data or a surprise rise in Eurozone inflation, as either could change the trend. For now, momentum continues to favor a weaker euro. Create your live VT Markets account and start trading now.The US EIA reported a 249B natural gas storage draw, smaller than the expected 256B, on February 6.
US EIA data showed a natural gas storage change of -249 Bcf for the week ending 6 February. The market expected -256 Bcf.
The draw was 7 Bcf smaller than forecast. This means less gas was pulled from storage than expected.
Storage Report Implications
The 249 Bcf storage draw was smaller than the market expected. This points to weaker demand in the first week of February and a looser supply-demand balance. That is usually bearish for prices. We expect immediate downward pressure on the March and April futures contracts. Inventory levels also support a bearish view. Total working gas in storage is now 2,341 Bcf, which is 235 Bcf above the five-year average for this time of year. This large buffer helps protect against supply disruptions and reduces the chance of a strong rally in the near term. U.S. dry gas production also remains strong, near a record 106 Bcf per day. At the same time, NOAA forecasts warmer-than-normal temperatures across the eastern half of the U.S. over the next 6–10 days. Warmer weather usually lowers heating demand, which can add to price pressure. Given this setup, strategies that benefit from flat or falling prices may be more suitable. With these conditions, traders may look to sell call options or use bear put spreads to take advantage of expected weakness. Still, it is important to watch LNG export demand. Feedgas flows to terminals are holding near 14 Bcf/d, which can support prices. A sudden geopolitical event that disrupts global LNG flows could also change the market quickly.Risk And Positioning Considerations
Volatility can return fast. In winter 2025, a short but severe cold blast caused a sharp price spike and hurt many short positions. Because of this, holding some upside protection can make sense. Cheap, out-of-the-money call options can help hedge against a sudden late-February shift in weather, which remains a key risk. Create your live VT Markets account and start trading now.Japan stays alert to currency moves despite a stronger yen, as USD/JPY nears 153 after US payrolls
USD/JPY rose toward 153 after strong U.S. payrolls data reduced expectations for near-term Federal Reserve rate cuts. The Japanese yen also strengthened. Japanese officials remain focused on FX moves, even with the yen’s recent gains.
Vice Finance Minister for International Affairs Atsushi Mimura said authorities are “not lowering our guard at all”. He said the government remains on high alert over foreign exchange movements.
Japan Maintains Intervention Watch
Mimura did not comment on speculation about possible exchange rate checks. He said Japan will keep monitoring markets with a strong sense of urgency and will stay in close contact with U.S. authorities and market participants. Jiji press reported that Japan asked the U.S. to conduct exchange rate checks in January. The article was produced using an artificial intelligence tool and reviewed by an editor. With USD/JPY now nearing 160, the watchfulness we saw from Japanese authorities throughout 2025 is even more important. Strong U.S. labor data from January 2026 is creating a setup similar to last year: a firmer dollar and a weaker yen. In the coming weeks, the risk of direct intervention should be seen as very high. Japan intervened strongly in 2022 when the pair was near 152, far below today’s levels. The warnings and the reported exchange-rate checks with the U.S. in 2025 also showed clear discomfort. This history suggests Japan’s tolerance has limits—and current levels may already be beyond them.Positioning And Hedging Considerations
New domestic data adds pressure. Japan’s core inflation for January 2026 was 2.2%, still above the Bank of Japan’s target. This gap—higher inflation at home alongside a weak currency—likely increases official frustration. That makes sudden and forceful action to support the yen more likely. For derivatives, buying out-of-the-money USD/JPY puts is a straightforward way to hedge, or to speculate on a sharp drop. Implied volatility has risen, so these options cost more. But that higher cost reflects a real risk: USD/JPY could drop 5–10 yen overnight. In this environment, paying for protection can be justified. High volatility can also be a trading opportunity. Strategies that benefit from big moves, such as long straddles, may work well. Continued official warnings (“jawboning”) may keep volatility elevated, which can hurt anyone who is short volatility and not prepared for a sudden policy surprise. The popular carry trade of being long USD/JPY looks especially risky at these levels. A sudden intervention could wipe out months—or even a year—of interest-rate gains in one session. The risk-reward of holding unhedged carry positions should be reassessed, because the downside from official action now looks much larger than the yield advantage. Create your live VT Markets account and start trading now.OCBC strategists say strong US payrolls are keeping the labour market steady, allowing the Fed to be patient on cuts despite lingering structural risks
US January non-farm payrolls rose by 130k versus a 65k consensus. The unemployment rate fell to 4.3% from 4.4%, and the underemployment rate also improved.
Overall, the data point to a steadier US labour market. That stability may give the FOMC more flexibility to delay rate cuts, which could limit near-term downside for the US Dollar.
Steadier Labor Market Supports Fed Patience
Further US Dollar gains will likely require more positive economic surprises. At the same time, uncertainty around Fed leadership succession and broader US policy risks remains a drag. Improving global growth prospects and stronger performance in non-US equities continue to weigh on the US Dollar. This view is most relevant for commodity-linked currencies such as AUD and NZD, as well as higher-yielding emerging market currencies. The strong January 2026 jobs report, which added 155,000 jobs, supports the view that the US labour market is holding steady. This should allow the Federal Reserve to be patient on rate cuts, limiting the risk of a sharp fall in the US Dollar. With the economy stable, the dollar may keep trading in a familiar range for now. For derivative traders, this suggests implied volatility in major USD pairs may be priced too high, creating opportunities to sell options. Strategies such as selling strangles or iron condors on currency ETFs can help collect premium if price action stays range-bound. A similar setup appeared in Q3 2025, before markets received a clearer policy signal.Positioning Around CPI And Global Growth
Even so, growing strength outside the US could still pressure the dollar. China’s manufacturing PMI recently surprised to the upside, rising to 51.2. With iron ore prices holding above $130 per tonne, this backdrop supports currencies such as the Australian dollar. Buying AUD/USD call options offers a defined-risk way to position for a potential breakout. The key event in the coming weeks is the US Consumer Price Index (CPI) report. A higher-than-expected inflation print would reinforce the Fed’s patient stance and could spark a short-term USD rally, making near-dated USD call spreads more attractive. A softer CPI result would likely weaken the dollar and support positions in commodity-linked currencies. Longer-term uncertainty—especially around Fed succession—continues to cap sustained dollar strength. This shows up in the options market, where six-month protection is notably more expensive than one-month protection. That pattern supports selling near-term volatility, while staying cautious about large, longer-term directional bets on the dollar. Create your live VT Markets account and start trading now.Scotiabank analysts say EUR/USD stabilises after NFP dip as spreads and correlations recover, targeting 1.20
EUR/USD steadied after a small dip tied to US jobs data. It entered Thursday’s North American session slightly higher. Analysts said the price action looked more stable.
Yield spreads kept recovering and moved back toward the multi-year highs seen in late December and early January. Correlations with spreads also improved, suggesting a return to more fundamental drivers.
The broader technical trend has stayed bullish since February 2025. Recent gains paused above 1.19, around 1.1920.
Resistance sits just above 1.19, with little additional resistance until 1.20. Near-term trading was expected to remain in a 1.1850 to 1.1950 range.
The article noted it was produced with the help of an artificial intelligence tool and reviewed by an editor.
The euro looks to be stabilising, and the overall technical picture remains bullish. The uptrend that began in February 2025 is still in place, which points to further strength against the US dollar. The next key target is the psychologically important 1.20 level.
On the fundamental side, the move is supported by recovering yield spreads between German and US bonds. These spreads are moving back toward multi-year highs. For example, the German-US 10-year spread has narrowed to about -125 basis points, its tightest level since early 2025. This may signal that capital flows will increasingly favour the euro, as Eurozone inflation came in at 2.5% last month, adding pressure on the ECB.
For derivatives traders, this view supports buying call options with a 1.20 strike that expire in the coming weeks, such as March or April 2026. This approach offers upside exposure if EUR/USD pushes above the current resistance area near 1.1920. The recent small pullback after last week’s strong US jobs report (220k) is being treated as a buying opportunity.
Traders who are only moderately bullish could instead consider selling put options. Selling a March 2026 put with a strike near the 1.1850 support area could generate premium. This strategy benefits if EUR/USD stays above that level, which fits with the view that the broader trend remains strong.
Over the past year, bullish sentiment has been building as the euro has climbed steadily since early 2025. The recent pause just above 1.19 may be temporary, as the market consolidates before another move higher. There is little meaningful technical resistance before 1.20, a level EUR/USD has not held consistently since late 2024.
U.S. existing home sales fell 8.4% month on month in January, reversing a previous 5.1% rise
U.S. existing home sales fell 8.4% month over month in January, after rising 5.1% the month before.
This sharp move to an 8.4% drop in January points to clear weakness in housing demand. The main driver is still high borrowing costs. Freddie Mac recently reported the average 30-year fixed mortgage rate near 6.8%. In our view, affordability is now stretched to the limit after a short-lived lift in sentiment in late 2025.
