Market drivers and catalysts
Equities: U.S. and Europe slipped on higher-rate worries and Iran headlines, Asia rose in Japan and Singapore, with Hong Kong closed.
Volatility: VIX above 20, macro data in focus, skew firm
Digital Assets: BTC/ETH stabilising, IBIT and ETHA outflows, macro-driven tone
Fixed Income: US treasuries find support Thursday despite firm US data.
Currencies: EURUSD and GBPUSD break lower, AUD remains broadly firm
Commodities: BCOM posts weekly gain as geopolitics lift energy and precious metals
Macro events: Eurozone and US Feb PMIs, US Q4 GDP & Dec PCE Price Index
Macro headlines
Japan's annual inflation fell to 1.5% in January 2026, the lowest since March 2022. Food and transport prices slowed, while energy costs remained negative. Core inflation reached the central bank's 2% target. Monthly CPI declined 0.2%.
Trump stated the US needs to "make a meaningful deal" with Iran, adding that the next 10 to 15 days will determine an accord. He noted Iran is a "hot spot" but mentioned "good talks" with officials. The vast array of US forces in the Middle East could sustain a campaign lasting many days.
The Philadelphia Fed Manufacturing Index increased to 16.3 in February 2026, exceeding expectations. Business activity and orders were strong, but shipments slowed. Employment dipped slightly, and the workweek shortened. Prices rose overall, though at a slower pace.
US pending home sales fell 0.8% in January 2026, after a 7.4% drop in December, missing the expected 1.3% increase. Sales decreased in the Northeast and South but rose in the Midwest and West. Year-over-year, sales were down 0.4%. Economist Lawrence Yun emphasized the need for more housing supply to avert higher prices.
US initial jobless claims fell 23,000 to 206,000 in mid-February, below the expected 225,000. Continuing claims grew 17,000 to 1,869,000, indicating a stable labor market.
The US trade deficit grew to $70.3 billion in December 2025, above the $55.5 billion forecast. Exports fell by 1.7%, and imports rose by 3.6%. The 2025 trade deficit was $901.5 billion, slightly less than 2024, with reduced deficits with the EU and China but expanded with Mexico, Vietnam, and Taiwan.
Macro calendar highlights (times in GMT)
China’s markets are closed for Lunar New Year through Monday, 23 February.
0700 – UK Jan Retail Sales
0700 – UK Jan Public Sector Net Borrowing
0900 – Eurozone Feb PMIs
1330 – US Dec PCE Price Index, Personal Spending
1330 – US 4Q GDP
1445 – US Feb PMIs
1500 – US Dec New Home Sales
Earnings this week
Today: Air Liquide, Warner Brothers Discovery, Anglogold Ashanti, Ango American, Danone
Next week
Monday: Dominion Energy, ONEOK, Diamondback Energy, Kratos Defense
Tuesday: Home Depot, Mercado Libre, EOG Resources, Leonardo SpA, American Tower Corporation, HP, Workday, Axon, First Solar
Wednesday: Nvidia, HSBC Holdings, JX Companies, Lowes Companies, Iberdrola, Synopsys, NU Holdings, Snowflake, E.ON, Bayer, Diageo, Zoom Communications
Thursday: Deutsche Telekom, Salesforce, Schneider Electric, Rolls Royce Holdings, Intuit, AXA, Monster Beverage, Dell Technologies, Coreweave, Rocket Lab
Friday: BASF, Holcim, Swiss Re
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: S&P 500 fell 0.3% to 6,861.9, the Nasdaq Composite slipped 0.3% to 22,682.7 and the Dow dropped 0.5% to 49,395.2 as Fed minutes and mixed data kept the “higher for longer” rate story alive and pushed longer yields up. Oil rose on Iran tension, lifting energy, while financials lagged. Walmart dropped 1.4% after a cautious fiscal 2027 outlook, Deere jumped 11.7% on upbeat earnings and a raised profit forecast, and Blue Owl slid almost 6.0% after a private-credit fund liquidity change spooked peers; Opendoor added 15.9% after hours on a stronger Q4. Markets now watch PCE inflation and whether yields keep climbing.
Europe: Across Europe, including the UK, the Euro Stoxx 50 fell 0.7% to 6,059.6 and the Stoxx 600 slipped 0.5% to 625.3 as hawkish-leaning Fed minutes kept the inflation debate alive and nudged yields higher. Banks, strong earlier in the month, retreated while investors also digested fresh regulation and tax headlines. Airbus sank 6.8% after cutting its 2026 jet production target, Enel fell 3.6% after Italy increased taxes on utilities, Orange jumped 7.5% after lifting its cash-flow target, and Nestlé rose 3.9% on a Q4 sales beat and plans to sell its ice cream business. Attention now turns to upcoming PMIs and the next wave of corporate results.
Asia: Asia ended mixed but firm where markets were open: Japan’s Nikkei 225 rose 0.6% to 57,467.8 and Singapore’s Straits Times Index gained 1.3% to 5,001.6, while Hong Kong remained shut for the third day of the Lunar New Year holiday. Trading stayed patchy, with investors balancing a tech-led bounce in global risk mood against higher U.S. yields and oil-driven inflation worries. In Singapore, Yangzijiang Shipbuilding climbed 4.9% to S$3.64, DBS added 1.3% to S$57.62 and OCBC gained 2.3% to S$21.59, while Mapletree Logistics Trust slipped 1.5% to S$1.28. As more Asian markets reopen, focus stays on geopolitics and whether bond yields keep rising.
Volatility
Volatility firmed again into Friday’s heavy macro calendar. The VIX closed at 20.23 on 19 February, while short-term gauges remain elevated (VIX1D 16.62, VIX9D 19.87), suggesting investors are still paying for near-term protection rather than expressing full confidence in a smooth advance. At the same time, SKEW at 141.19 indicates that tail-risk hedging demand has ticked higher, even if markets are not in outright stress mode.
The main drivers today are the US core PCE price index and Q4 GDP, followed by flash PMIs. Together, these releases could quickly reshape expectations around US interest rates. A softer inflation print may calm markets and compress volatility; a hotter reading could reinforce the view that rates stay higher for longer, keeping risk assets under pressure.
SPX expected move (options-implied): Today's expiry: ±53 points (~0.77%)
0DTE skew check (today’s expiry): Around the 6,860 strike, call implied volatility (~26.13%) is above put implied volatility (~23.69%), reflecting a mild upside tilt rather than classic downside-panic positioning.
Digital Assets
Crypto markets are stabilising modestly, but remain tightly linked to macro developments. Bitcoin is trading near $67,800, while Ethereum is around $1,957, both slightly firmer on the session. Broader altcoins such as Solana and XRP are also positive, reflecting a tentative improvement in risk appetite.
However, the bigger picture remains cautious. Recent ETF flow data shows net outflows from IBIT (–$164.1m on 19 February) and ETHA (–$96.8m on 19 February), highlighting softer institutional demand even as prices attempt to stabilise. That combination often points to selective dip-buying rather than a broad risk-on shift.
With US inflation and growth data due today, crypto remains sensitive to interest-rate expectations and US dollar moves. If inflation cools, digital assets could benefit alongside equities. If rates expectations firm, volatility may quickly return.
Fixed Income
US Treasuries found buying interest Thursday as the sell-off from Tuesday eased mid-day. The benchmark 2-year treasury yield rolled over from a 3.48% high to trade closer to 3.46%, while the benchmark 10-year yield peaked out at above 4.10% and traded below 4.07% in Asian hours Friday.
The Japan’s government bond yields absorbed a softer than expected January Japan CPI number, with the benchmark 2-year yield dipping less than a basis point to just under 1.26%, while longer dated JGB’s rallied more, with the benchmark 10-year JGB yield dipping belo the lowest daily close since early January late Friday in Tokyo and trading a 1.21%.
Commodities
Bloomberg Commodity Index is up 2% this week, as strong geopolitical-driven gains in energy (excluding natural gas) and precious metals offset Lunar New Year softness in industrial metals, while agriculture trades mixed. The biggest gainers were Brent (+7%), diesel (+8%), and silver (+4%), while losses were led by natural gas (-4%), coffee (-4%), and notably cocoa (-18%).
Crude oil is trading at a six-month high as traders attempt to price the risk of a Middle East supply disruption after Trump warned Iran it has at most 15 days to reach a nuclear agreement. The prospect of supply losses through the Strait of Hormuz — one of the world’s most critical oil transit chokepoints — has triggered significant hedging activity, with more than 344,000 Brent call options traded on Thursday, while put volumes were less than half that level.
Gold remains range-bound between USD 4,860 and USD 5,140, while silver needs to clear USD 80 before attracting fresh momentum.
CBOT wheat futures jumped on Thursday, rising above USD 5.60 for the first time in seven months, as dry, windy conditions across the U.S. Plains heightened supply concerns and fragile Russia–Ukraine peace talks threatened further shipment disruptions.
Iron ore futures in Singapore trade near USD 98 per ton after a six-week losing streak pushed prices to a seven-month low. The decline reflects signs of a loosening market as Chinese port inventories rise, the steel market shows seasonal softening, and major miners increase output.
Currencies
The US dollar pulled higher through key resistance in places, including against a weak Euro and even weaker sterling, as the recent 1.0766 EURUSD low was taken out Thursday and the pair posted a 1.0742 low before rebounding back above 1.0750. USDJPY trades above 155.00 as last week’s JPY rally has yielded to a modest broad sell-off this week.
GBPUSD fell through 1.3500 and hit a 1.3435 low before finding support as EURGBP eyes a clearly defined resistance line above 0.8740. Sterling has been weak this week as rate cut odds for the March 19 BoE meeting have firmed in the wake of UK economic data this week.
Elsewhere, the Australian dollar remains broadly firm as AUDUSD remains well clear of 0.7000, while EURAUD trades near 1-year lows and GBPAUD hit a new low since mid-2024 on Thursday. AUDNZD hit a fresh 12-year high above 1.1830 Friday.
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