2026-02-16 04:31:00
That will make for a quieter start to the new week, not least with Chinese markets also out today. As a reminder, it will be a one week break for China in conjunction with the Lunar New Year holidays. So, that will sap out a chunk of liquidity in Asia trading at least for the week ahead.
Anyway, the US holiday today gives markets some added time to digest the key happenings from last week. US data took center stage with the non-farm payrolls and inflation numbers being released on the same week. At the end of it all, traders pushed back Fed pricing slightly but I would argue it wasn’t all too significant.
The most notable pricing move was that the 25 bps rate cut in June was phased out. However, the odds of a June rate cut remain highly significant at around ~81%. By year-end, traders are still pricing in ~62 bps of rate cuts by the Fed for this year.
In FX, the push and pull in the data releases is still leaving the dollar in a vulnerable spot. And the focus this week will once again be on whether markets will continue to choose to punish the dollar. That especially over the continued incoherent and uncertain approach on economic and geopolitical policies by the US administration, among other things.
To start the day so far, the dollar remains mixed but little changed overall. USD/JPY remains in focus amid intervention risks, sitting up by 0.3% to 153.10 on the day. As long as price holds below the 155 mark, we might just be steering clear of the wrath of Tokyo officials. Meanwhile, EUR/USD is flat at 1.1865 and AUD/USD up just 0.1% to 0.7082 currently.
In other markets, US futures are seen up 0.1% but again the cash market will be closed later. This comes after a bit of a rebound in Wall Street to prevent more battering of software stocks late on Friday. Here’s the S&P 500 performance breakdown snapshot:
So, the overall risk sentiment is keeping somewhat steady and muted to start the day. That even as the Nikkei retreats by over 1% so far in Asia trading.
As for precious metals, we’re seeing gold and silver stumble once again with the former dipping back under $5,000 with the latter down nearly 3% to $75.15 currently.
