The Reserve Bank of New Zealand (RBNZ) is widely expected to leave the Official Cash Rate (OCR) unchanged at 2.25% tomorrow. Alongside the decision, we’ll also get the latest Monetary Policy Statement and updated economic projections.Analysts expect the central bank to signal an earlier start to rate hikes, with the first increase seen in December 2026. Inflation forecasts are also likely to be revised higher. These expectations have been driven mainly by stronger-than-expected Q4 inflation, which came in at 3.1%, well above the RBNZ’s 2.7% projection. At the same time, incoming data has generally pointed to a steady economic recovery.Although the latest unemployment rate was slightly above the RBNZ’s forecast, it was accompanied by a rise in the participation rate, making it less of a concern overall.That said, there's risk for disappointment. Markets have already priced in around 37 basis points of tightening by year-end, and many analysts are looking for two rate hikes this year. However, Governor Breman’s comments on January 23 were not particularly hawkish. While she acknowledged the ongoing recovery, she also highlighted lingering signs of weakness. She reiterated that favourable conditions remain in place to bring inflation back to the 2% midpoint target, citing spare capacity in the economy and moderate wage growth.Even if the RBNZ simply meets expectations by bringing forward the first rate hike to December 2026, we could still see a classic “sell-the-fact” reaction in the New Zealand dollar. It's unlikely that the central bank will deliver a more hawkish surprise than the market is already anticipating, but if it does so by signalling two rate hikes by year-end, then we should see a strong rally in the New Zealand dollar across the board.If policymakers instead strike a more cautious tone, downplaying the recent inflation pickup and focusing on softer areas of the economy, the NZD could come under more pronounced pressure. This article was written by Giuseppe Dellamotta at investinglive.com.

Global investors stay "uber-bullish" but asset price upside in Q1 is harderCommodity overweight at highest since May 2022 Equity overweight at highest since December 2024Most optimistic on earnings since August 2021, but investors saying companies are "overinvesting" at new recordAI bubble is top tail riskLong gold is the most crowded tradeRecord shorts on US dollar, most bearish since 2012The Bank of America Global Fund Manager Survey (FMS) is one of the most influential monthly reports in the financial world. It polls roughly 200 to 400 institutional fund managers (people managing hundreds of billions of dollars in hedge funds, pension funds, and mutual funds) to see how they are positioned in the markets. It's useful as a contrarian indicator. In fact, when positioning gets overstretched on one side or the other, the risk of aggressive unwinding increases. We've seen what happened with precious metals recently as silver plummeted by 47% in just a week. Complacency is punished in the markets. There's generally a catalyst triggering the reversals or just multiple factors signalling an inflection point.For example, traders have been very bearish the US dollar due to the de-dollarisation narrative (not supported by the data) and very dovish expectations for the Fed's interest rate path. The greenback could actually bounce back in 2026 with improving labour market or just with the other major central banks getting more dovish due to weakening data. This article was written by Giuseppe Dellamotta at investinglive.com.

Prior +1.8%HICP +2.1% vs +2.1% y/y prelimPrior +2.0%Core CPI 2.5% y/yNo changes to the preliminary estimates here. The reaction to the data was muted as expected given no surprises and no influence on ECB's policy outlook.The agency notes: "The rise in overall consumer prices intensified at the start of the year. In particular, the price of food increased more in January than in the previous months. In the months from September to December 2025, the price increase observed for food was still lower than overall inflation. Furthermore, the increase in service prices continues to drive up inflation in January."The market doesn't expect the ECB to adjust interest rates this year although we've been seeing a slow dovish repricing since the start of the year due to some easing in inflation and policymakers' attention to the exchange rate after the euro broke above the 1.20 handle versus the US dollar. This article was written by Giuseppe Dellamotta at investinglive.com.

Prior 5.1%Employment change 52k vs 94k expectedPrior 82kAverage weekly earnings +4.2% vs +4.6% 3m/y expectedPrior +4.7% (revised to 4.6%)Average weekly earnings ex bonus +4.2% vs +4.2% 3m/y expectedPrior +4.5% (revised to 4.4%)January payrolls change -11kPrior -43k (revised to -6k)As a general reminder, the UK labour market report is still one plagued by data quality issues. And that looks set to continue further as outlined here: UK statistics office evaluates potential delay to its overhauled jobs survey - reportWe have softer than expected figures across the board here, but as mentioned earlier, the data is unlikely to change much for the BoE as it already projected more weakness and more rate cuts ahead. Today's report should solidify expectations for a rate cut at the next meeting though. Traders were already pricing a 70% probability, so that will likely rise to 80% or even 90% when the market opens.MARKET REACTIONThe British pound dropped across the board as traders firm up expectations for an imminent rate cut. The market was pricing a total of 48 bps of easing by year-end which is likely to increase slightly after the employment data. If we see more weakness in the next months, we should see traders pricing in even more rate cuts than currently expected. This article was written by Giuseppe Dellamotta at investinglive.com.

EUR/USD1.2000 (EUR 940.83 mn)1.1900 (EUR 1.34 bn)1.1700 (EUR 975.72 mn)USD/JPY156.00 (US$ 1.95 bn)151.00 (US$ 1.09 bn)GBP/USD1.3560 (GBP 766.08 mn)USD/CHF0.7730 (US$ 694.69 mn)USD/CAD1.3600 (US$ 1.02 bn)1.3500 (US$ 973.00 mn)AUD/USD0.7025 (AUD 449.18 mn)NZD/USD0.6100 (NZD 140.98 mn)0.5975 (NZD 196.92 mn)EUR/GBP0.8970 (EUR 117.05 mn)WHAT ARE OPTION EXPIRIES?The FX option expiration price levels refer to the strike prices where option contracts are set to expire. These levels include both calls and puts.When you see "EUR/USD at 1.1600 for €4 billion" it means there is a total of €4 billion worth of options (calls + puts combined) that have a strike price of 1.1600 and are expiring at that specific time (the "New York Cut" at 10:00 AM ET).Traders watch these levels because they often act as a "magnet" for the price. For example, if there's nothing happening in the market and the price is close to the expiry level, let's say 30-50 pips away, what you will usually see is the price moving into the expiry level. This happens due to the hedging activity of the market makers (banks, dealers and so on).As the price gets closer to the strike price near expiration, these market makers must aggressively buy or sell the currency to hedge their risk. This hedging activity tends to suppress volatility and keep the price "pinned" close to the strike price until the expiration time passes.RELATED ARTICLES:For more information on how to use this data, you may refer to this post here. This article was written by Giuseppe Dellamotta at investinglive.com.

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EUROPEAN SESSIONIn the European session, the main highlight will be the UK employment report. The consensus is for 94K jobs added in the three months to December 2025 vs 82K in the prior month, with the Unemployment Rate expected to remain unchanged at 5.1%. The Average Earnings incl. Bonus is expected at at 4.6% vs 4.7% prior, while the ex-Bonus figure is seen at 4.2% vs 4.5% prior.As a reminder, the BoE surprised with a dovish hold at the last meeting as 4 members dissented for a rate cut versus 2 expected. Moreover, they changed the guidance in the statement from "the bank rate is likely to continue on a gradual downward path" to "the bank rate is likely to be reduced further".Inflation forecasts were also revised much lower across the board. Lastly, the Agents' Pay Survey showed wage growth to average 3.4% in 2026 vs 3.5% expected. Traders are now pricing a 68% chance of a rate cut at the next meeting already and a total of 48 bps of easing by year-end.The BoE projected the unemployment rate to peak at 5.3%, so they still expect more labour market weakness ahead before some stabilisation. In light of this, the data today will likely need to surprised to the downside by a big margin to trigger a more dovish repricing and lead to serious pound weakness. In case the data surprises to the upside, we could see some slightly hawkish repricing and strength in the pound but the UK CPI tomorrow will likely have more sway on expectations. We will also get the Final January German CPI and the German ZEW survey. These releases should have no market impact though as they won't change anything for the ECB. AMERICAN SESSIONIn the American session, the focus will turn to the January Canadian CPI report. The CPI Y/Y is expected at 2.4% vs 2.4% prior, while the M/M measure is seen at 0.2% vs -0.2% prior. As always the focus will be on the underlying inflation measures. The Trimmed Mean CPI Y/Y is expected at 2.6% vs 2.7% prior, while the Median CPI Y/Y is seen at 2.6% vs 2.7% prior.As a reminder, the BoC remains in a neutral stance with the market not pricing any move through year-end. The economic data has been supportive of such stance with the labour market stabilising and core inflation hovering a bit above the 2.5% mid-point of the BoC 2-3% target range. The data is unlikely to change much for the BoC unless we get some big deviation from the estimates. In fact, Governor Macklem warned that the central bank must be careful not to misdiagnose economic weakness amid the structural economic change. The BoC is likely focused mainly on the USMCA review now as a negative outcome could weigh significantly on the Canadian economy and require more rate cuts.We will also get the weekly US ADP jobs data, the NY Empire Manufacturing Index and the US NAHB Housing Market Index. These reports won't change anything for the Fed though, so the market reaction will likely be muted. At the margin, we could see some reaction in case the ADP data surprises significantly to either side. CENTRAL BANK SPEAKERS17:45 GMT/12:45 ET - Fed's Barr (neutral - voter)19:30 GMT/14:30 ET - Fed's Daly (dovish - non voter) This article was written by Giuseppe Dellamotta at investinglive.com.

Japan 5-year JGB auction sees steady demand, bid-to-cover at 3.10RBNZ to hold, signal rate hikes ahead, ING. Upside risks for NZ/US toward 0.62 by year-endIndia central bank finalises easier foreign borrowing rules for corporatesOil steady as Iran drills near Strait of Hormuz ahead of US talksUS dollar positioning hits record underweight in Bank of America surveyGold and silver both lower into thin Asia tradeReminder, China, Singapore & Hong Kong markets are all closed today, Tuesday, February 17BOJ likely to raise rates 25bp April, former board member says. Gradual move toward 1.25%RBA minutes show inflation risks ‘shifted materially’ behind February rate hikeICYMI: China to remove tariffs on imports from 53 African nations from May 1FX option expiries for 17 February 10am New York cutSoft landing looks more plausible, but the Fed isn’t ready to call it done.RBNZ expected to hold rates as higher food price inflation adds limited pressureRBA February minutes to detail case for rate hike, set to reinforce tightening biasAt a glance:USD/JPY fell sharply after a Bloomberg report flagged April as the likeliest timing for the next BOJ rate hike, citing an ex-BOJ board member.Broader USD firmed modestly against most majors despite yen strength.RBA minutes showed a hold was considered but a 25bp hike seen as the stronger case; no discussion of 50bp.Thin liquidity due to US Presidents Day and Lunar New Year holidays across much of Asia.RBNZ decision due Wednesday; widely expected to hold, focus on forward guidance.Gold and silver edged lower.USD/JPY dropped at pace during the session following a Bloomberg report citing former Bank of Japan board member Seiji Adachi, who said April is the most likely timing for the next rate hike. Policymakers are seen waiting for wage negotiation results and updated forecasts before moving, with further tightening toward 1.25% still considered possible. The move reinforced expectations that policy normalization in Japan is not finished, lending support to the yen.Elsewhere across FX, the US dollar was a little firmer overall, gaining modest ground against several majors even as it softened versus JPY.The Indian rupee slipped alongside, with continued weakness in domestic equities also weighing on the currency. Dollar selling by state-owned banks helped limit the decline.Minutes from the Reserve Bank of Australia showed the board did consider leaving rates unchanged at its February meeting, but ultimately judged there was a stronger case for a 25bp increase. There was no indication that a 50bp move was seriously contemplated. The minutes reiterated the strategy of returning inflation to target within a reasonable timeframe while preserving employment gains, a balance that suggests a likely pause in March. Next week’s January monthly CPI data will be key in shaping that decision.Price action was partly distorted by holiday-thinned liquidity. US markets were closed for Presidents Day on Monday, while Lunar New Year holidays kept mainland China, Hong Kong, Singapore, South Korea and Taiwan offline here today, limiting participation.Looking ahead, the Reserve Bank of New Zealand meets on Wednesday, February 18. The policy statement is due at 2pm New Zealand time (0100 GMT / 2000 US Eastern on Tuesday). The bank is widely expected to remain on hold, with markets focused on whether policymakers begin signalling renewed tightening later this year.In commodities, gold and silver both lost ground during the session.---Adding in some late data just out from Japan, the December Tertiary Industry Index -0.5% m/mexpected -0.2%, prior -0.4%The Japan Tertiary Industry Index measures monthly changes in output across Japan’s service sector, which accounts for roughly 70% of the economy. The weak ressult points to potentially slowing demand and reduced inflation momentum.--- This article was written by Eamonn Sheridan at investinglive.com.

Japan’s 5-year JGB auction drew steady demand with a 3.10 bid-to-cover ratio and a modestly tighter tail, though participation was slightly softer compared with stronger sales last year.Japan sold ¥1.89 trillion of 5-year JGBs with a bid-to-cover ratio of 3.10 (vs 3.08 prior).Stop rate (highest accepted yield) came in at 1.646%, average yield 1.640%.Auction tail narrowed to 0.03 from 0.05, signalling relatively solid price discovery.Bid-to-cover was the lowest since August 2025, suggesting marginally softer demand.Overall result viewed as stable, with no signs of disorderly selling pressure.Japan’s Ministry of Finance conducted a ¥1.89 trillion reopening auction of five-year Japanese government bonds (JGBs), drawing steady, though slightly softer, investor demand as yields remain elevated relative to recent years.The auction achieved a bid-to-cover ratio of 3.10, meaning total bids were just over three times the amount sold. While marginally above the previous sale’s 3.08 reading, it was the lowest level since August 2025, hinting at some cooling in demand compared with stronger earlier auctions.The lowest accepted price was 99.7900, with an average accepted price of 99.8200. Because bonds are priced relative to a face value of 100, a price below par implies a yield above the coupon rate. The stop rate, effectively the highest yield accepted at the auction, was 1.646%, while the average yield came in slightly lower at 1.640%. The bond carries a 1.600% coupon and matures in December 2030.One closely watched metric, the “tail”, narrowed to 0.03 from 0.05 at the previous sale. The tail measures the gap between the average price and the lowest accepted price. A smaller tail typically signals tighter bidding and healthier demand, as investors cluster more closely around the clearing level.The data also showed that 17.1% of bids were accepted at the lowest price, indicating a moderate concentration of demand at the cut-off level. In addition to competitive bids, the ministry allocated bonds through non-price competitive auctions, which allow certain participants to buy at the average accepted price.Overall, the auction points to stable demand for intermediate Japanese debt, even as the Bank of Japan continues its gradual policy normalization. With five-year yields hovering around multi-year highs, investors appear willing to absorb supply, though not with the same intensity seen during periods of ultra-loose policy---Jargon explainedBid-to-cover ratio: Total bids divided by the amount sold. Higher = stronger demand.Stop rate: The highest yield (lowest price) accepted in the auction.Tail: The difference between the average accepted price and the lowest accepted price. Smaller = smoother auction.Reopening: Additional issuance of an existing bond rather than a brand-new maturity This article was written by Eamonn Sheridan at investinglive.com.

ING expects the RBNZ to hold in February 18 but signal a more hawkish stance as inflation surprises to the upside, forecasting two hikes from 3Q and medium-term NZD strength.Summary of their views below. Earlier:RBNZ expected to hold rates as higher food price inflation adds limited pressureLikely RBNZ on hold decision February 18RBNZ statement due 18 February at 2pm New Zealand time (0100 GMT / 2000 US Eastern time on Tuesday 17 February)Summary:RBNZ expected to keep rates unchanged on 18 February, but projections may turn more hawkish.Recent inflation prints have exceeded the bank’s forecasts, raising questions over last year’s easing.New Governor Anna Breman’s reaction function in focus at her first full meeting.ING expects two rate hikes from 3Q, taking the policy rate to 2.75% by year-end.NZD seen supported medium term, with year-end NZD/USD forecast at 0.62.The Reserve Bank of New Zealand is widely expected to leave its policy rate unchanged at its February meeting, but attention is likely to centre on whether policymakers begin laying the groundwork for renewed tightening later this year, according to ING.The bank argues that inflation developments have challenged the RBNZ’s earlier disinflation narrative. Fourth-quarter headline CPI rose 3.1% year-on-year, above the central bank’s 2.7% projection, while non-tradable inflation also exceeded expectations. That gap has fuelled debate over whether last year’s easing cycle may have been too aggressive.With the first-quarter CPI report not due until late April, this week’s meeting and the one in early April will be key opportunities for the RBNZ to signal how it interprets the inflation backdrop. ING expects no immediate policy move but sees scope for upward revisions to both inflation forecasts and the projected rate path.February’s meeting will also provide investors with their first clear read on Governor Anna Breman’s approach after stronger-than-expected price data. While she previously carried a dovish reputation, recent communications have emphasised flexibility and a willingness to adjust policy if inflation proves sticky. Markets currently price no rate hikes until late 2026, a stance ING sees as vulnerable to revision.On growth and employment, the picture remains relatively firm. Employment growth has outpaced central bank projections, participation has risen and business surveys suggest gradual momentum in services and manufacturing. That backdrop reduces pressure for further easing and supports the case for eventual tightening.ING’s core call is for two rate hikes beginning in the third quarter, lifting the policy rate to 2.75% by year-end, followed by a further move in 2027 toward a 3.0% neutral level. With markets already pricing around 40 basis points of tightening by December, confirmation of a hawkish shift in projections could validate expectations and prompt renewed NZD strength. ING sees upside risks for NZD/USD toward 0.62 by year-end, although it cautions that near-term gains could be tempered by fragile global risk sentiment and recent rapid currency appreciation. This article was written by Eamonn Sheridan at investinglive.com.

India’s ECB rule changes widen offshore funding options for corporates, with a mild positive read-through for risk. Info via Reuters reporting. Summary:RBI finalised easier rules for external commercial borrowings (ECBs), expanding flexibility for corporates raising overseas debt.Eligible firms can borrow up to $1bn or 300% of net worth, in foreign currency or rupees.Pricing constraints eased, with borrowing costs to be aligned with market conditions.Minimum average maturity set at three years; refinancing of existing borrowings permitted.End-use restrictions remain in place for some purposes, including parts of real estate, unless structured within rules.India’s central bank has finalised a set of reforms that make it easier for companies to raise debt offshore, a move likely to broaden funding options for corporates and lower financing frictions as investment and refinancing needs remain elevated.Under the updated framework, eligible borrowers will be able to raise external commercial borrowings of up to $1 billion or 300% of their net worth, with funding permitted in either foreign currency or Indian rupees. The rules also loosen earlier constraints around borrowing costs, allowing firms to raise foreign debt at market pricing rather than being bound by more restrictive cost ceilings.The central bank has retained basic safeguards, including a minimum average maturity requirement of three years. It has also explicitly allowed ECB proceeds to be used to refinance existing borrowings, a change that may be particularly relevant for firms facing near-term maturity walls or seeking to optimise funding mixes between domestic and offshore markets. In addition, ECBs may be converted into non-debt instruments, subject to compliance with foreign exchange regulations.The reforms are likely to be welcomed by larger corporates with established access to international markets, as well as by issuers that can arbitrage between onshore and offshore rates depending on currency basis, swap costs and market windows. At the same time, the central bank has kept some end-use restrictions, including limitations linked to real estate activity unless transactions are structured in line with the rulebook. That suggests policymakers are still aiming to prevent speculative leverage while improving legitimate corporate funding channels. ---Stock market implications are broadly constructive at the margin. Sectors with sizable capex plans or refinancing needs could benefit from a wider set of funding options and potentially lower blended borrowing costs. Companies with strong credit profiles may be best positioned to take advantage of market-priced offshore funding. Financials could see a mixed effect: easier offshore access might reduce incremental domestic loan demand for some top-tier borrowers, but it can also support credit quality by easing refinancing risk and reducing stress for leveraged balance sheets. In macro terms, greater offshore borrowing could influence FX flows and INR hedging demand, particularly if issuance rises in foreign currency, making currency management and hedging costs an important swing factor for corporates. This article was written by Eamonn Sheridan at investinglive.com.

Oil prices remain steady as Iran’s Strait of Hormuz drills heighten supply risk ahead of US nuclear talks, while OPEC+ output decisions and prospects for diplomatic progress temper upside.Summary:Oil prices steady as Iran conducts naval drills near the Strait of Hormuz ahead of US nuclear talks.President Donald Trump signals indirect involvement in Geneva discussions, reiterates tough stance.Brent holds near $68–69; WTI trades around mid-$63s amid holiday-thinned liquidity in Asia.OPEC+ seen preparing for possible output increases from April if supply disruptions persist.Base-case outlook from some banks sees eventual Iran and Russia-Ukraine deals weighing on prices toward $60 Brent.Oil prices were broadly steady in thin trade as investors weighed the risk of supply disruptions after Iran launched naval drills near the Strait of Hormuz just ahead of fresh nuclear talks with the United States.Brent crude hovered near the upper-$60s per barrel, while US West Texas Intermediate traded in the low-$60s, with price action partly distorted by the US Presidents Day holiday and Lunar New Year closures across much of Asia. Mainland China, Hong Kong, Singapore, South Korea and Taiwan were among markets observing holidays, limiting liquidity.The focus remains squarely on geopolitics. Iran’s military exercises in the Strait of Hormuz, a critical chokepoint through which a significant share of global oil exports transit, have injected a degree of risk premium into prices. The waterway is a primary export route for major Gulf producers including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, as well as Iran itself.President Donald Trump said he would be indirectly involved in the Geneva talks, expressing optimism that Tehran wants an agreement, though recent remarks advocating regime change added a layer of unpredictability to the diplomatic backdrop.Market participants broadly view the current pricing as reflecting a modest geopolitical premium. Should tensions ease, whether through progress in US-Iran discussions or developments in the Russia-Ukraine conflict, that premium could unwind quickly. Conversely, any escalation or breakdown in negotiations could tighten supply expectations and push prices higher.Supply dynamics within OPEC+ also remain in focus. Some analysts argue that if disruptions to Russian flows keep Brent in the $65–70 range, the producer alliance may tap spare capacity and increase output from April, particularly as the group positions for peak summer demand. Reports suggest OPEC+ is already leaning toward resuming gradual supply increases.Longer term, some forecasts assume both a US-Iran accommodation and progress in Russia-Ukraine negotiations by mid-year, which could add barrels back to the market and weigh on Brent toward the low-$60s.For now, oil sits in a holding pattern — supported by geopolitical risk but capped by expectations of eventual supply normalization. This article was written by Eamonn Sheridan at investinglive.com.

Dollar positioning has reached its most negative level on record in Bank of America’s survey, reflecting broad expectations of US softness and potential Fed easing, with labour market risks seen as the main catalyst for further weakness.Summary:Investor positioning in the US dollar has fallen to its most negative level since at least January 2012.Net exposure to the greenback is at a record underweight in Bank of America’s latest survey.Short positioning exceeds previous bearish extremes, including last April’s lows.Concerns over Fed independence have eased, but this has not revived demand for the dollar.Survey respondents see further US labour market weakness as the key downside risk for the currency.Investor sentiment toward the US dollar has turned decisively bearish, with positioning now at the most underweight level on record in Bank of America’s FX and rates sentiment survey, which dates back to January 2012.The February survey shows net exposure to the dollar falling to unprecedented lows, with short positioning, effectively bets that the currency will decline, reaching its most extreme level in more than 14 years. Exposure has dropped below the previous trough seen last April, underscoring the scale of the shift in conviction against the greenback.The positioning reflects a broad consensus that the dollar faces downside risks. Market participants appear to be leaning toward a softer outlook for US growth and inflation, alongside expectations that Federal Reserve policy could ease over time. Notably, concerns about the Fed’s institutional independence have diminished following President Donald Trump’s nomination of Kevin Warsh as the next Fed Chair. However, the easing of those political anxieties has not translated into renewed appetite for US assets or a rebound in dollar demand.Instead, respondents to the survey cite further deterioration in the US labour market as the primary catalyst that could drive the currency lower. While headline employment data have remained relatively stable, any meaningful softening in hiring or a rise in unemployment could reinforce expectations of rate cuts and widen interest rate differentials against the dollar.At the same time, such extreme positioning introduces asymmetry. When market consensus becomes heavily one-sided, currency moves can become more volatile, particularly if incoming data or Fed communication challenge prevailing assumptions. A surprise upside inflation print or firmer labour market data could force rapid short-covering.For now, however, the message from positioning data is clear: investors are aligned for a weaker dollar. Whether that trade extends or reverses will depend largely on the evolution of US macro data and signals from the Federal Reserve in coming months. This article was written by Eamonn Sheridan at investinglive.com.

An update on these two losing ground. There is no fresh news driving price. This article was written by Eamonn Sheridan at investinglive.com.

I've been posting this information late last week and earlier this week, but ICYMi. Summary:Lunar New Year 2026 (Year of the Horse) falls on Tuesday 17 Feb.Mainland China markets are scheduled to be closed Feb 16–23, reopening Tue Feb 24.Hong Kong is closed Feb 17–19, and reopens Fri Feb 20.Singapore (SGX) is closed Feb 17–18.China is running an extended nine-day Spring Festival holiday (Feb 15–23) with officials expecting a record travel surge, supportive for consumption narratives, but liquidity will be thin.Lunar New Year 2026 lands on Tuesday 17 February and, as usual, it will reshape trading conditions across mainland China, Hong Kong and Singapore, with liquidity effects often as important as the headlines.Onshore, China’s equity market enters its biggest scheduled trading interruption of the year.The Shenzhen Stock Exchange calendar shows the market closed from Monday 16 February through Monday 23 February, resuming Tuesday 24 February.The Shanghai Stock Exchange (SSE) will be closed for the 2026 Lunar New Year (Spring Festival) from Monday, February 16, 2026, to Monday 23 Feb 2026 (inclusive) Reopens: Tuesday 24 Feb 2026With A-shares shut, price discovery shifts offshore (CNH, H-shares, ADRs, commodities proxies), while onshore macro/credit headlines can “bottle up” and reprice quickly when domestic trading resumes.This year the macro overlay is the extended nine-day public holiday (Feb 15–23) and a policy push to encourage spending and travel, with officials projecting a record travel rush. That tends to support short-term themes in consumer, travel, catering, duty-free and tourism names, while also lifting scrutiny on high-frequency indicators (mobility, domestic flight bookings, hotel occupancy, box office, and retail receipts) as a real-time read on confidence.Hong Kong becomes the key regional venue for China beta during the A-share closure. HKEX lists half-day trading on Monday 16 February (Lunar New Year’s Eve) and full market holidays Tuesday 17 through Thursday 19 February, with normal trade resuming Friday 20 February. Expect thinner depth, wider spreads and a higher sensitivity to CN headlines.Singapore also sees disrupted liquidity. SGX notes half-day trading on 16 February, with the market closed 17–18 February. Regionally, the practical market impact is a short window where positioning gets lighter, volatility can be jumpy on small flows, and “reopen gaps” become a feature, especially if FX or commodities move sharply while China is closed. This article was written by Eamonn Sheridan at investinglive.com.

A former BOJ board member says April is the most likely timing for the next rate hike, as policymakers await wage data and updated forecasts, signaling a cautious but ongoing normalization process.This comes via Bloomberg (gated)Former BOJ board member Seiji Adachi says April is the most likely timing for the next rate hike.March move seen as risky due to limited confirmation on wages and inflation trends.April meeting will include wage negotiation outcomes, Tankan surveys and updated forecasts.PM Sanae Takaichi unlikely to block hikes due to market sensitivity, particularly yen risks.BOJ seen as more proactive, potentially lifting rates toward 1.25% as normalization progresses.The Bank of Japan is increasingly likely to deliver its next interest rate increase in April rather than March, according to former board member Seiji Adachi, who argues policymakers will prefer firmer confirmation on wages and inflation before acting again.Speaking to Bloomberg, Adachi said a March hike would rely too heavily on forward-looking expectations rather than verified data. By contrast, the late-April policy meeting will give officials access to a fuller set of indicators, including results from annual wage negotiations, updated business and household sentiment surveys, and the central bank’s revised economic outlook report.The timing matters. Japan’s large firms are not expected to conclude key wage agreements until late March, meaning the board meeting that ends March 19 would likely precede meaningful clarity on pay trends. Sustained wage growth is a central pillar of the BOJ’s normalization strategy, underpinning confidence that inflation can be maintained around its 2% target without renewed deflation risks.Adachi’s comments come as current board members have signaled that further tightening is in the pipeline following December’s rate increase, which lifted the policy rate to 0.75%, the highest level in roughly three decades. More hawkish voices within the board have hinted that spring could be an appropriate window for additional action.Political risks appear manageable for now. Prime Minister Sanae Takaichi, fresh from a decisive election victory, is not expected to obstruct the normalization process. According to Adachi, overt pressure to delay rate hikes could unsettle financial markets and weaken the yen, an outcome policymakers would prefer to avoid. After her first post-election meeting with Governor Kazuo Ueda, no specific policy requests were reported.Adachi also suggested the BOJ has shifted toward a somewhat more proactive stance since his departure last year. Less emphasis is being placed on the lower bound of estimates for Japan’s neutral rate, implying a desire to rebuild policy space after years of ultra-loose settings.While he sees scope for rates to rise toward 1.25%, he is less certain about moves beyond that level, given Japan’s modest potential growth rate. Recent data showing subdued annualized GDP growth reinforce the view that tightening will proceed cautiously. For the BOJ, returning rates to around 1.25% would mark a symbolic completion of its exit from crisis-era deflation policies — but the path there remains deliberately measured. This article was written by Eamonn Sheridan at investinglive.com.

RBA minutes show the February rate hike was driven by stronger-than-expected data, persistent broad-based inflation and easing financial conditions, with policymakers emphasising data dependence and no preset rate path.Board judged risks to inflation and employment had “shifted materially”, strengthening case for February hike.Members agreed inflation would likely stay above target too long without a policy response.Cash rate lifted 25bp to 3.85%; holding was considered but hike deemed stronger option.No preset path for rates; future decisions explicitly data dependent.Demand exceeding supply, labour market still tight, financial conditions seen as having eased.Minutes from the Reserve Bank of Australia’s February meeting show policymakers concluded a rate rise was necessary after judging that risks to both inflation and employment had shifted in a more concerning direction.Board members agreed that, absent a policy response, inflation would likely remain above the 2–3% target band for too long. Data since the prior meeting had generally surprised on the upside, reinforcing concerns that price pressures were proving more persistent than expected.Although the option of leaving the cash rate unchanged at 3.60% was discussed, members ultimately agreed that the stronger case was to lift rates by 25 basis points to 3.85%. The decision was unanimous and reflected a view that excess demand in the economy was unlikely to correct if policy settings remained unchanged.The minutes highlight that demand is now clearly exceeding aggregate supply and is forecast to do so for some time. Inflation was described as broad-based, with pressures unlikely to ease sufficiently without tighter policy. Labour market conditions were also seen as firm, with downside risks having diminished and labour costs still elevated.Financial conditions were another focus. Members noted that conditions had eased materially, with banks lending freely and credit growth strong. House prices and mortgage lending had accelerated, prompting concern that policy was no longer as restrictive as assumed, even accounting for the recent appreciation in the Australian dollar.At the same time, the board stressed uncertainty. Risks were judged to be present on both sides of the outlook, and members acknowledged it was not possible to have a high degree of confidence in any specific future path for the cash rate. Incoming data would determine whether further tightening was required.The broader global backdrop was also seen as more resilient than anticipated, supported in part by strong AI-related investment. For now, the RBA’s message is clear: policy has tightened in response to persistent inflation, but the next move remains contingent on how the data evolve.---From the day:RBA unanimous 25bp hike, lifts inflation forecasts and signals more tightening in 2026RBA governor Bullock says that inflation pulse is too strongRBA governor Bullock says the Australian economy is in a good positionPlenty since then:Bullock says RBA needs tighter policy as capacity constraints lift inflation risksRBA’s Hauser says inflation too high, vows action to return to target. AUD jumps.Bullock: higher AUD and rates will cool demand, RBA open to more hikes if neededRBA’s Sarah Hunter says labour market tight, inflation to stay above target This article was written by Eamonn Sheridan at investinglive.com.

China will implement zero tariffs on imports from 53 African countries from May 1, broadening earlier waivers and deepening economic ties, in contrast to the US administration’s more protectionist tariff stance.Summary:China to eliminate tariffs on imports from 53 African nations from May 1, 2026.Policy applies to all countries with diplomatic ties to Beijing, expanding beyond least-developed economies.Move framed as deepening economic ties and expanding market access for African exports.Comes as Washington under Donald Trump increases tariffs and trade barriers.Highlights contrasting trade strategies between Beijing and the US.China will remove tariffs on imports from 53 African countries beginning May 1, 2026, in a sweeping trade initiative designed to deepen economic ties across the continent and reinforce Beijing’s influence in the Global South.President Xi Jinping announced the policy in a message to the African Union Summit in Addis Ababa, confirming that all African nations with diplomatic relations with China will receive zero-tariff treatment. The measure significantly expands earlier arrangements that had applied primarily to the continent’s least-developed economies.State media said the policy would be accompanied by efforts to negotiate additional joint economic partnership agreements and further broaden market access through upgraded trade facilitation mechanisms, including expanded “green channel” processes aimed at speeding African exports into China.The initiative represents one of Beijing’s most comprehensive tariff liberalisations toward a single region and underscores China’s longer-term strategy of anchoring trade, infrastructure and commodity relationships across Africa. China has already established itself as the continent’s largest trading partner, and tariff-free access could further increase flows of agricultural goods, minerals and manufactured products into the Chinese market.The announcement also lands against a sharply different global trade backdrop. In Washington, the administration of President Donald Trump has intensified tariff measures, arguing that higher import duties are necessary to protect domestic industries and rebalance trade. Recent US tariff actions have raised concerns about renewed inflationary pressures and supply-chain costs.By contrast, Beijing’s move signals an outward-facing posture, positioning China as a proponent of market access and South-South trade integration. The policy could strengthen diplomatic alignment while reinforcing supply chains for key commodities.The practical economic impact will depend on utilisation rates and product composition, but the symbolic message is clear: at a time of rising protectionism in parts of the developed world, China is leaning into tariff liberalisation to consolidate influence across emerging markets. This article was written by Eamonn Sheridan at investinglive.com.

EUR/USD: 1.1900 (EUR1.22bn), 1.2000 (EUR769.2mn), 1.2025 (EUR615.4mn)USD/JPY: 156.00 (US$1.87bn), 151.00 (US$986.2mn)USD/CAD: 1.3600 (US$1.11bn), 1.3625 (US$980.7mn), 1.3500 (US$943mn)AUD/USD: 0.7025 (AUD429.2mn), 0.6750 (AUD399.3mn)GBP/USD: 1.3560 (GBP317mn)More information here.Justin posted this yesterday: This article was written by Eamonn Sheridan at investinglive.com.

Soft landing looks more plausible, but the Fed isn’t ready to call it done.This is via the Wall Street Journal (gated), I've summarised. Summary:Key US macro “vital signs” are aligned: inflation is easing, jobs are holding up, and growth remains solid.Core CPI slowed to 2.5% y/y in January, while unemployment edged down to 4.3%.The Fed’s preferred inflation gauge is running closer to 3%, keeping officials wary that progress could stall above 2%.Job gains have been modest and narrow, leaving the labour market potentially more fragile than headline prints suggest.Risks run both ways: a consumer slowdown or AI-linked corporate cost-cutting on one side, and resilient demand keeping inflation sticky on the other. The US economy is showing the clearest combination of falling inflation, steady employment and firm growth seen since before the pandemic, reviving hopes that a “soft landing” may be within reach. Recent data have strengthened the case that inflation can cool back toward the Federal Reserve’s 2% goal without the economy slipping into recession, even as policymakers and forecasters remain cautious about declaring success.January’s inflation report showed underlying price pressures continuing to moderate. Core consumer prices were up 2.5% from a year earlier, the lowest since 2021. Some of that improvement has been influenced by technical factors, but the reading also suggested less of the early-year reflation pattern that unsettled markets in recent years. On the jobs side, the unemployment rate ticked down to 4.3%, and payrolls rose by around 130,000, pointing to a labour market that is cooling but not cracking.Still, confidence remains restrained because the Fed’s preferred inflation measure has been running nearer 3% than 2%, and progress has been uneven since mid-2025. Several forecasters expect inflation to prove sticky this year as tariff-related costs filter through supply chains and into retail pricing. That backdrop has shifted the Fed’s concern from a renewed inflation surge to the risk that inflation settles above target.There are also questions about labour-market durability. Revised data indicate job creation last year was modest by historical standards and concentrated in a narrow set of sectors. The unemployment rate has been stable partly because firms have slowed hiring without moving to widespread layoffs, a balance that could shift quickly if growth or corporate profitability stumbles.Potential triggers include cost-cutting among companies disrupted by the AI-driven reshuffle of winners and losers, or a sustained market drawdown that dents household wealth and spending. But the bigger near-term inflation risk may be the opposite: consumers staying resilient enough to keep services inflation firm and price pressures lodged above 2%. Under the surface, shelter inflation appears to be cooling, yet non-housing services remain sticky, and tariff-sensitive goods categories have shown signs of re-acceleration.The economy is closer to a soft landing than many believed possible a few years ago, but the outcome is not locked in. If growth holds up, political pressure for rate cuts could intensify even if the traditional case for easing is weak. With leadership change at the Fed approaching, the next phase may hinge as much on policy choices as on the incoming data. This article was written by Eamonn Sheridan at investinglive.com.