London formed a balanced TPO value near the POC; New York’s retest will decide whether price migrates upward or rotates into a lower structure.
S&P 500 futures (ES) stayed in a balanced, rotational range during London trade. Value was centred near a developing point of control (POC) around ~6,975. Price held between the pivot “gates” at 6,979.50 (upper) and 6,958 (lower), while cumulative delta stayed positive.
On the wider map, the top of the range sat near ~7,010.25 and the bottom near ~6,936.50. The New York open was the key test: will price hold outside the gates, or rotate back through value?
TD Securities expects the Bank of Canada’s deliberations summary to offer more nuanced guidance than January’s cautionary tone.
TD Securities expects the Bank of Canada’s Summary of Deliberations to add more detail than the cautious statement from January. It expects the Bank to balance two points: ongoing uncertainty, and the fact that the Bank has limited tools to deal with long-term structural headwinds.
The firm also expects the minutes to expand on the uneven data that came in before the January decision. It thinks the Bank will note that monthly activity has cooled heading into 2026.
Inflation And Growth Signals
TD Securities does not expect the minutes to show much concern about the recent rise in headline CPI. Instead, it expects the Bank to point to softer core inflation measures and to highlight the impact of one-off factors. The firm expects the minutes to repeat that the Bank discussed several options for its next move. It also expects to see differing views on both timing and direction, plus more detail on what type of shock could change the outlook laid out in the January Monetary Policy Report. The article says it was produced with an AI tool and then reviewed by an editor. It is credited to the FXStreet Insights Team, described as journalists who select market observations and add analysis from internal and external sources. We expect the upcoming Bank of Canada Summary of Deliberations to sound less cautious than the January meeting. The Bank will likely acknowledge that economic activity has cooled as 2026 begins. This more nuanced message may suggest the Bank is becoming more comfortable with the current economic path.Derivatives And Rates Positioning
Traders should focus on how the Bank discusses inflation, since it will likely look past the recent rise in headline CPI. January 2026 data showed headline inflation at 2.9%, while core measures—preferred by the BoC—fell to an average of 2.5%. We expect the Bank to highlight this underlying disinflation trend. Other recent data also points to a slowdown. The December 2025 monthly GDP report showed a small 0.1% decline. The January 2026 jobs report showed unemployment rising to 6.2%. The deliberations will likely discuss how this weaker backdrop could shape future policy decisions. For derivatives traders, this added nuance may support positioning for an earlier-than-expected policy shift. Uncertainty about the timing of the first rate cut could keep volatility elevated in options on CORRA futures. We see potential value in buying straddles or strangles around the April and June meeting dates. With the data cooling, directional trades that benefit from lower interest rates may also look more attractive. We stayed cautious through the second half of 2025, but the picture is now changing. Going long BAX futures or buying call options on Government of Canada bonds could offer upside. Create your live VT Markets account and start trading now.WTI trades near $65.15, up 1.53%, on Middle East supply worries despite rising US stockpiles
WTI US Oil traded near $65.15 on Wednesday, up 1.53%. It extended a rebound that began earlier in the week. Prices climbed on worries about global supply, linked to Middle East tensions.
US–Iran relations stayed tense. This raised concerns about tougher sanctions or disruptions to Iranian exports. Reuters reported that the US may consider intercepting ships carrying Iranian crude if nuclear talks fail.
Supply Risks Back In Focus
In Asia, India cut imports of Russian oil while it holds trade talks with the US. It also increased purchases from the Middle East and West Africa. This supported demand for some crude grades. Gains were limited by higher US supply. The American Petroleum Institute reported a 13.4 million-barrel rise in US crude inventories for the week ending 6 February. This was the largest build since early 2023. Traders waited for official Energy Information Administration data to confirm or challenge the API numbers. Markets also watched upcoming reports from OPEC and the IEA. The IEA warned that global supply could exceed demand this year, which could create a surplus. WTI remained sensitive to both geopolitics and data on output, demand, and stockpiles.Positioning And Hedging Ideas
We are seeing a familiar pattern in the oil market, similar to what we faced in February 2025. At that time, the market was pulled between Middle East supply fears and large increases in US crude inventories. Today, with WTI trading around $78 a barrel, tensions in the Red Sea are again pushing prices higher. This creates a challenging backdrop for traders. The risk of supply-chain disruptions, along with OPEC+ signaling it will keep production cuts through the second quarter, adds clear upside risk. Recent data showing China’s manufacturing PMI rising to 50.8 also points to firmer demand from Asia. We think traders may want to consider buying out-of-the-money call options on April and May contracts to benefit from any sudden price spikes. Still, strong US output is limiting the upside. Production has been near the record levels seen in late 2025. While the latest EIA report showed a smaller-than-expected inventory build of just 1.2 million barrels, overall US crude stocks remain high. This steady supply can cap how far prices climb in the short term. This push-and-pull between bullish sentiment and bearish fundamentals has lifted implied volatility in options. For some traders, that makes premium-selling strategies more attractive, such as selling cash-secured puts below the $75 support level. This can generate income while setting a defined entry point if prices pull back. We also remember the IEA’s warning last year about a possible supply surplus. That risk remains if global growth slows. Traders holding long positions may want to buy puts as protection against a sudden demand drop. This adds a layer of insurance in a market being pulled in two directions. Create your live VT Markets account and start trading now.Rabobank’s Jane Foley says political uncertainty under Starmer is restraining sterling; EUR/GBP stays near 0.8700; GBP is the weakest G10 currency over five days
UK political uncertainty around Prime Minister Starmer is holding back sterling. EUR/GBP is staying close to 0.8700, and on a 5-day view GBP is the weakest G10 currency.
Rabobank expects EUR/GBP to trade between 0.86 and 0.87 over the next month. It still sees EUR/GBP moving higher into mid-year and beyond.
Political Risks And Sterling Outlook
The bank says the main downside risk for GBP is a return of market focus on UK politics, with tensions potentially rising into spring. It also notes that the Bank of England is one of the few remaining G10 central banks that markets still expect to cut rates again. The note says GBP can react strongly to changes in UK long-term interest rates because the UK runs a current account deficit. It adds that gilts may be more vulnerable to negative headlines than debt in countries that have large domestic savings. Rabobank forecasts EUR/GBP at 0.89 over 12 months. A year ago, political uncertainty around Prime Minister Starmer was a key reason the pound struggled. In early 2025, this risk helped make Sterling the worst-performing G10 currency over a five-day period. That same political fragility is still limiting the currency’s upside.Markets Focus On Rates And External Funding
Expectations for Bank of England rate cuts have also played out, adding pressure to Sterling. The BoE cut rates twice in late 2025, taking the policy rate down to 4.25%. By contrast, the European Central Bank has kept its key rate at 4.50%, which makes the euro more attractive on yield. This gap in rates matters even more because of the UK’s current account deficit, which was 3.5% of GDP in the latest reported quarter of 2025. Because the UK relies on foreign capital, the pound and UK government bonds (gilts) can be quick to weaken on bad news. You can see this in how fast gilt yields move after negative headlines compared with German bund yields. Last year’s call for EUR/GBP to reach 0.89 has been very close, with the pair now trading near 0.8880. Over the next few weeks, traders may look at ways to benefit if the pound stays weak versus the euro. One defined-risk approach is buying EUR/GBP call options with a strike around 0.8950 to gain if the uptrend continues. With ongoing political and economic uncertainty, implied volatility in the pound remains high. This can make selling out-of-the-money GBP puts against the US dollar a potential way to collect premium, especially for traders who think support is forming near $1.20. Another option is a long straddle, which positions for a big move either way if a new political trigger appears. Create your live VT Markets account and start trading now.US average hourly earnings grew 3.7% year on year in January, beating expectations of 3.6%
US average hourly earnings rose 3.7% year over year in January. This was above the 3.6% forecast.
The gap between the actual and expected rate was 0.1 percentage points. This report shows wage growth is running hotter than expected.
Implications For Inflation And Fed Policy
This stronger wage growth suggests inflation could stay higher for longer than expected. Markets had been pricing in possible rate cuts by mid-year, but this report may push that timeline back. It also raises the chance the Federal Reserve keeps policy tight for longer to bring inflation under control. The first reaction showed up in interest rate futures. Traders quickly cut the probability of a rate cut by June 2026. Last week, CME FedWatch showed nearly a 70% chance of a cut at that meeting. That figure has now dropped below 40%. This fast repricing means derivatives trades that depend on near-term easing now carry more risk. For equity index traders, this points to a more defensive stance in the weeks ahead. “Higher for longer” rates often pressure stock valuations, especially in technology. The VIX, a key volatility gauge, has already risen from about 14 to above 17. Traders may want to consider protective puts on the S&P 500 or Nasdaq 100. This setup also looks similar to what happened in 2025. That year, several strong labor reports pushed out expectations for a Fed pivot and triggered short, sharp equity sell-offs. We could see similar volatility again if hopes for cheaper borrowing costs keep getting delayed.US Dollar And Fx Strategy
In FX markets, a more hawkish Fed outlook usually supports the US dollar. The Dollar Index (DXY) is already firming, moving toward 105 as capital seeks higher relative US yields. Derivatives traders may want to consider strategies that benefit from USD strength against currencies where central banks are closer to cutting rates. Create your live VT Markets account and start trading now.In January, America’s jobless rate was 4.3%, slightly below the expected 4.4%
U.S. unemployment was 4.3% in January, below the 4.4% forecast.
A lower-than-expected unemployment rate suggests the economy is running hotter than expected. That gives the Federal Reserve even less reason to cut interest rates soon. A strong labor market can keep wage growth firm and make inflation harder to bring down.
Tight Labor Market And Sticky Inflation
This jobs report follows the January Consumer Price Index (CPI) release, which showed headline inflation stuck at 3.1%. Together, a tight labor market and stubborn inflation support the “higher for longer” interest-rate story. Markets are now quickly cutting the odds of a rate cut before summer. In Fed funds futures, the chance of a rate cut by June 2026 has fallen below 25%, down from over 50% just a few weeks ago. Bonds reacted right away: the 10-year Treasury yield moved back above 4.25%. That is a meaningful jump and points to a clear shift in market sentiment. We saw this pattern several times in 2023. Strong data kept pushing back expectations for a Fed pivot. Each strong jobs report led to bond selling and a reset in rate-cut timing. That same pattern now seems to be returning in early 2026. In the weeks ahead, we should consider strategies that can benefit if rates stay high and uncertainty rises. That could include put options on rate-sensitive areas, such as long-duration Treasury ETFs like TLT. We should also be ready for higher volatility, which can make call options on the VIX a useful hedge.Positioning For Higher For Longer
Create your live VT Markets account and start trading now.In January, US nonfarm payrolls rose by 130K, beating forecasts of 70K and boosting job growth
US nonfarm payrolls rose by 130,000 in January.
Forecasts had pointed to 70,000, so the number beat expectations.
Fed Policy Outlook
Because the January jobs report was much stronger than expected, we think the Federal Reserve will likely keep interest rates unchanged through the first quarter. Expectations for a March rate cut are fading fast. Fed funds futures now show very low odds of a near-term cut. A strong labor market gives the Fed room to wait for more inflation data before making a move. We are preparing for a possible pullback in equity indices such as the S&P 500, which has rallied on hopes of easier policy. Traders may want to buy near-term put options on the SPY or QQQ ETFs to hedge or to benefit if prices fall. This stronger data challenges the story that has driven recent gains. The payroll surprise may bring uncertainty back to markets, which could make long-volatility trades more attractive. We are watching VIX call options, since the VIX is near a historically low level around 13. In 2024, uncertainty about the Fed’s path led to sharp, though brief, spikes in the VIX. In rates, the strong payroll number has already pushed the 10-year Treasury yield back above 4.0% after a recent decline. We see an opportunity to short Treasury futures, such as the /ZN contract, based on the view that yields may keep rising. The market is starting to accept that disinflation may not be a smooth, steady process. The U.S. dollar is also strengthening on this news, with the Dollar Index (DXY) moving above 104. If rates stay “higher for longer,” the dollar becomes more attractive than currencies whose central banks may cut sooner. For that reason, we prefer long positions in U.S. dollar futures or U.S. dollar call options.Dollar Strength Implications
Create your live VT Markets account and start trading now.Canadian building permits rose 6.8% month on month in December, beating the 5% forecast.
Canada’s building permits rose 6.8% month-on-month in December. That was above the expected 5% increase.
The report shows a stronger monthly gain than forecast. No additional details were included in the update.
This strong December 2025 building permits reading suggests the Canadian economy had more momentum going into the new year than we first thought. Strength in the housing pipeline is something the Bank of Canada watches closely. It makes an early rate cut in March or April much less likely.
We should look at options on CORRA futures and price in a lower chance of a rate cut before summer. January 2026 CPI also supports this view, with core inflation still high at 3.1%. That points to a patient Bank. This feels similar to 2023, when resilient data repeatedly pushed markets to delay their rate-cut expectations.
A more hawkish Bank of Canada is bullish for the loonie, especially with oil holding above $85 WTI. We should consider buying USDCAD put options or using put spreads to benefit from potential CAD strength. The latest Commitment of Traders data already shows speculative net CAD shorts have fallen for three straight weeks.
For equities, this sets up a two-way derivatives trade. The data—along with the stronger-than-expected January 2026 jobs report (+45,000)—supports buying calls on construction materials ETFs. On the other hand, a “higher for longer” rate outlook pressures rate-sensitive sectors, so puts on Canadian REIT ETFs look like an attractive hedge.
MUFG’s Lee Hardman says the Australian dollar rose 6.5% against the US dollar, supported by the RBA’s hawkish tightening stance
The Australian dollar has gained almost 6.5% against the US dollar so far this year. Analysts link the move to earlier rate hikes by the Reserve Bank of Australia (RBA) and recent comments from Deputy Governor Andrew Hauser.
Hauser said inflation is still “too high” and called it a key challenge for the RBA board. His comments suggested the latest rate rise may not be the last.
Rba Signals And Market Pricing
Markets now see a chance of another RBA rate hike as soon as May. The report also pointed to a growing policy gap between the RBA and the Bank of England (BoE). Traders expect the BoE to cut rates again, possibly as soon as next month. The report mentioned a suggested long AUD/GBP trade based on these different rate paths. It also said the article was created with an AI tool and checked by an editor. FXStreet said its Insights Team gathers market views from outside experts and adds analysis from internal and external analysts. It also said the content can include material from commercial sources. This time last year, in early 2025, the Australian dollar was strong because the RBA took a tough stance on inflation. That hawkish approach helped push the currency higher against the US dollar. At the time, commentary pointed to more rate hikes, and those hikes did happen.Shifting Rate Cycle And Volatility Trades
The policy gap that developed during 2025 created strong opportunities, especially for traders who were long AUD versus more dovish currencies like the British pound. The RBA kept raising rates to fight stubborn inflation, while the BoE started to loosen policy. The wider interest-rate gap gave AUD/GBP steady support. Now the picture looks very different. The RBA cash rate has stayed at 5.10% for the past two quarters. Australia’s latest quarterly inflation reading has eased to 3.1%, which is close to the top of the RBA’s target range. Instead of pricing in more hikes, the market is now focused on when rate cuts could begin later this year. This shift—from expecting hikes to expecting cuts—adds uncertainty. Derivatives traders may be able to use that uncertainty. The main question is no longer *whether* the RBA will cut, but *when* it will cut, and how much compared with other central banks. Because of this, AUD volatility may rise in the coming weeks as new data arrives. We think traders should consider strategies that can benefit from higher volatility. One option is a long straddle on AUD/USD using three-month options. This approach can profit from a large move in either direction—whether the RBA signals an earlier-than-expected cut or suggests rates may stay high for longer than the market expects. Create your live VT Markets account and start trading now.Russia’s foreign trade rose from $6.795B to $10.021B in December, reflecting improved overall performance
Russia’s foreign trade balance rose to $10.021bn in December, up from $6.795bn in the prior period.
That is a $3.226bn increase from one period to the next.
