OCBC strategists say the yen rose as Japanese bonds and shares rallied after elections, easing fiscal worries
The Japanese yen strengthened after Japan’s election. It rose alongside gains in local bond and equity markets. The move is linked to lower fiscal worries, as the government has taken a more cautious tone while investors wait for clearer policy signals.
Prime Minister Takaichi said a temporary cut to the food sales tax would not be funded by new debt. The cut is estimated to cost about JPY 5tn per year, roughly the size of Japan’s education budget.
Stronger US jobs data keeps the dollar steady and highlights key forex developments to watch
The US Dollar stayed strong late in the week after the January US labour report. Thursday’s US calendar includes weekly Initial Jobless Claims and January Existing Home Sales.
US Nonfarm Payrolls rose by 130,000 in January, after 48,000 in December (revised from 50,000), beating the 70,000 forecast. The jobless rate eased to 4.3% from 4.4%, and participation rose to 62.5% from 62.4%.
Dollar Reaction And Market Snapshot
The USD Index climbed to about 97.30 after the data, then traded around 97 early Thursday. US stock index futures were up 0.2% to 0.3%. UK GDP rose 0.1% in the three months to December 2025, matching Q3’s 0.1%. Year-on-year growth was 1.0% in Q4 2025 versus 1.2% expected and 1.2% in Q3 (revised from 1.3%), while industrial and manufacturing output fell 0.9% and 0.5% month-on-month in December; GBP/USD was near 1.3630. EUR/USD held near 1.1870, while USD/JPY traded below 153.00 at a two-week low. AUD/USD reached about 0.7150 after a 0.7% rise, then stayed above 0.7100; gold held above $5,000. January’s strong jobs report supports our view that the Federal Reserve will keep policy tight. Nonfarm Payrolls came in well above expectations at 130,000, showing the US economy is still holding up. That backdrop supports a firmer US Dollar. As a result, we may want to position for further dollar gains using options or futures.Inflation And Policy Implications
The latest Consumer Price Index (CPI) for January 2026 showed headline inflation at 3.1%, still well above the Fed’s 2% target. In late 2025, the Fed repeatedly stressed that inflation was its main focus. This combination of solid job growth and sticky inflation gives the Fed little reason to cut rates soon. The gap between the US and UK outlook is also clearer. The US labour market looks strong, while UK Q4 2025 GDP rose only 0.1% and December industrial production fell. This weakness suggests GBP/USD may be at risk. We may want to look for chances to take bearish exposure, such as buying pound put options. Even with broad dollar strength, USD/JPY is at a two-week low below 153.00. This likely reflects growing speculation that the Bank of Japan could move away from negative interest rates, which would support the yen. Because these forces point in different directions, the pair looks higher risk. It may be best to stay cautious until the BoJ gives a clearer signal. Gold holding above $5,000 stands out in a hawkish Fed environment. A stronger dollar and higher rates often weigh on gold, as they did for much of 2025. Its resilience suggests investors may be using gold as a hedge against stubborn inflation or geopolitical risk. For now, aggressive short positions in gold look risky. The Australian Dollar is also showing its own strength after hawkish comments from the RBA. With AUD/USD holding above 0.7100, this is a contest between two strong currencies. That can lead to range trading, which may favour strategies that benefit from low volatility, such as selling strangles. Create your live VT Markets account and start trading now.UK preliminary GDP rose 0.1% quarter on quarter in Q4 2025, missing the 0.2% forecast and matching Q3 growth
UK preliminary GDP rose 0.1% quarter-on-quarter (QoQ) in Q4 2025. This matched Q3 but missed the 0.2% forecast. Annual growth was 1.0% year-on-year (YoY), below the 1.2% expected. Q3 growth was also revised down to 1.2% from 1.3%.
Monthly GDP rose 0.1% in December, down from 0.2% in November (revised up to 0.3%). Industrial Production fell 0.9% month-on-month (MoM) and Manufacturing Production fell 0.5% in December. Both were worse than forecasts.
Market Reaction And Release Timing
After the release, GBP/USD fell 0.03% to 1.3615. The GDP data was scheduled for 7:00 GMT. Before the release, forecasts pointed to 1.2% YoY growth in Q4 2025 and 0.2% QoQ growth. The Bank of England (BoE) projected 0.9% growth in 2026 and around 1.5% growth for the full year. Markets were pricing in a 25 basis point rate cut at the March 19 meeting. December inflation showed CPI at 3.4% YoY, core CPI at 3.2% YoY, and services inflation at 4.5%. Overall, the Q4 2025 growth figures came in below expectations. This suggests the UK economy is slowing faster than expected. The 0.1% QoQ reading, along with weak industrial and manufacturing numbers, points to a soft start to 2026. This adds weight to the case for a BoE rate cut in March.Trading Implications Into The BoE Meeting
This looks like a stagflation-style setup: weak growth alongside still-elevated inflation. It echoes 2023, when inflation stayed high even as growth was near flat. At that time, inflation peaked above 11% in late 2022, which pushed the BoE to keep rates high. Today, with inflation at 3.4%, the BoE faces the same tension: control inflation while supporting a slowing economy. For derivatives traders, this push-pull between weak growth and sticky inflation can support a volatility-buying approach. GBP pairs may see larger swings into the March 19 policy meeting. Buying straddles or strangles on GBP/USD options could help capture a large move either way, since the market remains split on what the BoE will do. Given the weak data, a bearish bias on Sterling still makes sense. The drop in December manufacturing also recalls late 2023, when the UK Manufacturing PMI fell to 46.2, pointing to a deep contraction. One approach is to consider GBP/USD put options with strikes below the 1.3508 support level, or to look at short positions in Sterling futures. It may also make sense to look for relative value trades versus currencies with stronger outlooks. With the UK weakening, selling the Pound against the US Dollar is a straightforward idea, especially if the Federal Reserve has less need to cut rates quickly. That policy gap could keep pressure on GBP/USD in the weeks ahead. The key release to watch next is the January 2026 inflation report. A softer reading would give the BoE more room to cut, which could push the Pound sharply lower. Another hot inflation print would deepen the BoE’s dilemma and may lead to more choppy, erratic trading. Create your live VT Markets account and start trading now.Standard Chartered says US payrolls rebounded unexpectedly, boosting expectations for a recovery in easing as job growth quickened and unemployment fell
The latest US Nonfarm Payrolls report showed stronger labor-market momentum than expected. It reported faster job growth, a lower unemployment rate, and a higher employment-to-population ratio.
The data came after large downward benchmark revisions to earlier figures. Even with those revisions, the report still pointed to a firmer labor market in late 2025 and into 2026.
Health care and social assistance remained the main drivers of job growth. Other areas of the economy also showed early signs of improvement.
The report suggests the labor market could improve further, but uncertainty remains. One strong month does not remove broader concerns, especially with weak sentiment and the risk of an AI-related shock.
The article was produced using an Artificial Intelligence tool and reviewed by an editor.
The January employment report was much stronger than expected. It beat almost all forecasts and showed a surprising jump in hiring. Job gains were 303,000, far above the 185,000 consensus estimate, and the unemployment rate fell to 3.5%. This suggests the economy is regaining strength as we move deeper into 2026.
This kind of data makes it very unlikely that the Federal Reserve will cut interest rates in the first half of the year. Inflation also moved slightly higher to 3.2% last month, which gives the Fed more reason to keep rates unchanged. Derivatives markets will likely price in a much lower chance of a rate cut before summer.
For traders, this supports a “higher for longer” view on rates. One possible approach is using options on Secured Overnight Financing Rate (SOFR) futures that benefit if near-term rate cuts do not happen. With the job market holding up, aggressive bets on fast Fed easing look risky in the weeks ahead.
The report also adds uncertainty for equity indexes, which strengthens the case for buying downside protection. A strong economy can support earnings, but delayed rate cuts can weigh on stock valuations. Volatility may stay elevated, as shown by the VIX moving back above 15 after the release.
It is also worth noting the broader context. During 2025, recession fears were widespread and sentiment was weak. Large downward revisions were later made to last year’s job figures. One month of very strong data is not enough to settle concerns about the longer-term trend.
Health care and social assistance are still doing most of the heavy lifting for job growth, but the rebound is starting to spread to other sectors. That may justify watching options on cyclical industry ETFs for signs of more strength. Even so, the potential impact of AI on the labor market remains unclear and could become a source of future weakness.
After weak UK GDP data, GBP/JPY stays subdued near 208.60 and pares earlier European losses
GBP/JPY traded near 208.60 in early European hours on Thursday. It was still lower on the day, though it had recovered from earlier losses. The pair slipped as the Pound weakened after the latest UK GDP report.
UK GDP rose 0.1% quarter-on-quarter in the three months to December 2025. This matched Q3 but missed the 0.2% forecast. On a yearly basis, GDP grew 1.0% in Q4 2025 versus 1.2% expected, down from 1.2% in Q3.
Uk Data And Growth Signals
Monthly GDP increased 0.1% in December, following 0.2% growth in November and in line with forecasts. However, industrial data was weaker: Industrial Production fell 0.9% and Manufacturing Production dropped 0.5% in December. Both results came in below expectations. Meanwhile, the Yen strengthened as Japanese officials increased warnings about currency moves and volatility. Vice Finance Minister Atsushi Mimura said authorities were watching markets “with a high sense of urgency”. Finance Minister Satsuki Katayama said Japan would respond in line with the US-Japan joint statement. The Yen also benefited from expectations tied to Prime Minister Sanae Takaichi’s expansionary fiscal plans. Reports also pointed to better fiscal discipline and a more market-friendly approach, which has supported Japanese equities. With weaker UK data for the final quarter of 2025, the case for further Sterling softness is building. Slower GDP growth and falling manufacturing output increase the chance the Bank of England could cut interest rates sooner than markets previously expected. This echoes late 2023, when similar weak growth data pushed investors to price in a faster easing cycle.Outlook For Gbp Jpy
On the other side of the pair, the Japanese Yen is showing signs of strength. Verbal intervention from officials is a familiar tool used often in 2022–2024, and it frequently helped pause JPY declines, at least temporarily. Along with optimism around the new prime minister’s fiscal agenda, this is helping to attract investor interest and support the currency. Over the coming weeks, we think GBP/JPY is more likely to move lower. Derivatives traders may consider positioning for a decline, for example by buying put options with strike prices below 208.00 to benefit if the pair falls. Since Japanese authorities are focusing more on currency volatility, option premiums may rise. That makes timing important, as hedging costs could increase if volatility climbs further. Create your live VT Markets account and start trading now.UOB analysts say AUD/USD has risen, may test 0.7150, and could soon challenge resistance at 0.7175
AUD/USD rose more than expected. It hit 0.7143 and ended near 0.7127. There is room to test 0.7150, but after that the risk of a pullback increases. The next resistance is 0.7175.
Despite the move higher, upward momentum is seen as largely unchanged. Support sits at 0.7105 and 0.7085.
Near Term Levels And Momentum
Over the next 1–3 weeks, the outlook stays positive as long as 0.7055 holds. An earlier “strong support” level was 0.7015. This piece was created with an AI tool and reviewed by an editor. It is credited to the FXStreet Insights Team, which compiles market views from analysts and other sources. In last year’s analysis, the tone was bullish for AUD/USD, with attention on a break above 0.7175. That momentum faded. Later in 2025, the key support at 0.7055 broke. Today, the market is very different, with prices trading closer to 0.6750. The main factor is the rate gap. The Reserve Bank of Australia’s cash rate is 4.35%, while the US Fed Funds rate is higher at 5.50%. This difference supports the US dollar and limits rallies in the Aussie. Recent inflation data in both countries has been firmer than expected, which has pushed back expectations for rate cuts this year.China And Macro Risks
China’s recovery also remains weak, which weighs on the Australian dollar. Australia’s latest trade balance showed a smaller-than-expected surplus, partly due to softer demand from key trading partners. This outside pressure makes it harder for AUD to sustain a move higher. In the weeks ahead, AUD/USD will likely stay range-bound. Given mixed economic signals, selling option volatility may be a sensible approach. A likely trading range is 0.6650 to 0.6850. Derivative traders may look at strategies such as selling strangles to collect premium, based on the view that the pair will stay within this band. Still, it is important to watch for surprises in central bank messaging. The next US inflation release and Australian jobs data are key events that could drive a move. Create your live VT Markets account and start trading now.Sterling weakens as softer UK Q4 GDP boosts expectations of BoE rate cuts, sending GBP/USD lower again
GBP/USD fell for a third straight day on Thursday, pulling back from a one-week high near 1.3715. In early European trading, it held above 1.3600 and barely moved after weak US data.
UK data kept pressure on sterling. Output rose 0.1% in the three months to December 2025, missing the 0.2% forecast. Q4 2025 GDP grew 1.0% year on year, below the 1.2% expected.
Uk Data Weighs On Sterling
Industrial and manufacturing production, along with the trade balance, also came in below estimates. Markets continued to price in a Bank of England rate cut in March. The US dollar got support after traders scaled back expectations of a March Federal Reserve cut, following strong nonfarm payrolls data on Wednesday. Comments from two Federal Open Market Committee members also helped the dollar recover from a near two-week low. Even so, markets still priced in at least two 25-basis-point Fed cuts in 2026. Focus now shifts to US weekly initial jobless claims, followed by US consumer inflation data due on Friday. A correction clarified that Q4 2025 UK GDP growth was 1.0% year on year, not 1.3%.Trade Idea And Key Risks
We expect the British pound to weaken as poor late-2025 UK data strengthens the case for a Bank of England rate cut next month. The 1.0% year-on-year GDP growth rate in Q4 2025 is worryingly low. It echoes the stagnation seen in 2023, which later led to a mild recession. This weak base suggests the pound could fall further against the dollar. At the same time, the US dollar is firming as markets reassess the Fed’s rate path after last week’s strong jobs report. The recent nonfarm payrolls figure showed job growth well above 250,000, similar to the upside surprises in early 2024. This has sharply reduced the odds of a March cut. Federal funds futures now imply about a 20% chance of a March cut, down from more than 60% a few weeks ago. Our near-term focus is tomorrow’s US consumer inflation data. This release will likely set the dollar’s direction for the next few weeks and strongly influence GBP/USD. If inflation comes in above the 2.9% consensus forecast, it would likely support a more patient Fed and could push GBP/USD below the 1.3600 support area. Given this setup, we should consider buying GBP/USD put options to position for a potential decline. A put with a strike near 1.3550 and an expiry in late March could benefit from the expected policy split between the two central banks. It also keeps maximum risk defined ahead of what could be a volatile inflation release. For investors with a higher risk tolerance, selling GBP/USD futures is a more direct approach, but it requires extra caution. The core theme remains the same: a weakening UK economy may force the BoE to cut, while a resilient US economy allows the Fed to wait. That mix supports a lower GBP/USD exchange rate. Any short-term rallies may offer chances to add bearish positions. Create your live VT Markets account and start trading now.Antero Resources reported $1.41bn in quarterly revenue, up 20.8% year on year, while EPS fell to $0.42
Antero Resources reported revenue of **$1.41 billion** for the quarter ended December 2025, up **20.8%** year over year. EPS was **$0.42**, compared with **$0.58** a year earlier.
Revenue was above the Zacks Consensus Estimate of **$1.31 billion**, a **+7.87%** surprise. EPS was below the **$0.52** consensus estimate, a **-19.89%** surprise.
Average net production per day was **8,217.00 BBL/D** for oil versus **8,929.26 BBL/D** estimated, and **2,265 MMcf/d** for natural gas versus **2,265.45 MMcf/d** estimated. Combined natural gas equivalent averaged **3,511.00 MMcfe/D** versus **3,501.71 MMcfe/D** estimated.
Oil production totalled **756.00 MBBL** versus **776.24 MBBL** estimated, while natural gas production was **208.00 Bcf** versus **208.35 Bcf** estimated. Combined production was **323.00 Bcfe** versus **321.09 Bcfe** estimated.
Average realised prices after derivative settlements were **$3.72** per thousand cubic feet for natural gas versus **$3.75** estimated, and **$45.99** for oil versus **$45.07** estimated. Natural gas sales revenue was **$773.6 million** versus **$795.74 million** estimated, up **42.3%** year on year.
Marketing revenue was **$31.7 million** versus **$31.06 million** estimated, down **6.7%** year on year. Oil sales revenue was **$34.77 million** versus **$32.85 million** estimated, down **29.2%**, and natural gas liquids sales were **$474.26 million** versus **$435.23 million** estimated, down **14.7%**.
Based on the Q4 2025 earnings report, the picture is mixed and suggests higher volatility for Antero Resources. Revenue beat expectations by a wide margin, but earnings per share missed by a lot. When revenue and EPS move in opposite directions, investors often feel uncertain. That can make options strategies that benefit from big price moves, such as straddles, more appealing.
The EPS miss is the biggest concern. It may mean costs rose faster than analysts expected. We view that as a near-term bearish sign because shrinking margins often worry investors. This is also in line with current market conditions. The EIA reported on February 5, 2026, that natural gas in storage is **15% above** the five-year average. That can weigh on gas prices and hurt producers like Antero.
Still, the strong revenue result matters. Better-than-expected natural gas liquids and oil sales helped drive the beat. If traders think the cost issues are short-lived, they may treat any pullback as a chance to take bullish positions. In a similar report in mid-2024, the stock dropped at first but later recovered, which suggests patience can pay off.
Production last quarter was steady and mostly in line with expectations, so output does not look like the problem. Over the next few weeks, the market will likely focus on one question: do the strong sales outweigh the weaker profitability? Because of that push-and-pull, we expect more choppy trading. Traders may respond with collars—buying puts for downside protection and selling calls to help pay for them.
RBC Economics says Canada’s GDP eased in late 2025, with flat Q4; per-capita growth to rise in 2026 as manufacturing weakens but impacts stay contained
RBC Economics says Canadian GDP growth slowed in late 2025. It cut its Q4 forecast from 0.5% annualised growth to flat. Real GDP per person is still expected to rise slowly into 2026.
Manufacturing that depends on trade is still weak. However, RBC says the spillover to the rest of the economy has been limited. The labour market is stabilising, and the unemployment rate is trending lower.
Core inflation is still above target, but it is easing. RBC links these trends to expectations that the Bank of Canada will keep policy steady.
The Bank of Canada held the overnight rate at 2.25% in January for a second meeting. It said the policy rate “remains appropriate” and is at the bottom of the neutral range. RBC expects the rate to stay at 2.25% through 2026, pointing to a steadier labour market, more fiscal support, and easing inflation pressure.
RBC also cites the IEEPA ruling. It says the impact on Canada depends on whether tariffs exempt trade that complies with CUSMA. In the past, exemptions have protected most Canadian exports to the U.S. from IEEPA measures.
The article says it was produced using an AI tool and reviewed by an editor.
With the Bank of Canada holding at 2.25%, we see little reason to expect near-term rate surprises. Growth looks modest, and the labour market is steady. The Bank appears comfortable waiting. That should keep volatility low in short-term rate products like BAX futures in the weeks ahead.
Recent data supports this view. January inflation was 2.5%. That is still above target, but it continues to cool from last year’s highs. The January labour report showed unemployment at 5.4%. That stability does not force the Bank to act.
This calm follows a large easing cycle that ended in 2025, after rates were cut from the highs reached in 2023. Flat GDP in Q4 2025 was a key reason the Bank stopped cutting. Markets now expect an extended pause, and pricing in derivatives implies the 2.25% rate will hold through the year.
For options traders, this backdrop may favour low-volatility strategies, such as selling straddles or strangles on rate or FX products. Implied volatility in CAD options has already dropped since last year. That fits the market’s view that the BoC will not be a major source of price moves. The main risk to these trades would be a surprise rebound in economic data.
With domestic rates stable, the Canadian dollar will likely be driven more by outside forces. Key inputs include oil prices (especially Western Canadian Select) and shifts in global risk sentiment. U.S. growth also matters. Even with CUSMA exemptions limiting major trade shocks, Canada’s trade-exposed manufacturing remains sensitive to U.S. demand.
Fourth-quarter UK annual GDP rose 1%, missing the 1.2% forecast and disappointing analysts’ expectations
The UK’s year-on-year gross domestic product (GDP) growth was 1% in the fourth quarter.
This was below the forecast of 1.2%.
