Monetary & Foreign exchange Market Recap: Feb. 17, 2026

Wall Avenue whipsawed on Tuesday as lingering issues about synthetic intelligence disruption collided with a broadly risk-off tone throughout asset lessons, sending gold and oil sharply decrease whereas the S&P 500 briefly examined a key technical degree earlier than staging a late-session partial restoration. A number of Federal Reserve officers weighed in on the coverage outlook, delivering a cut up message that stored charge expectations in test and contributed to a combined end for the U.S. greenback. In the meantime, weaker-than-expected U.Okay. labor market knowledge and a softer-than-forecast Canadian CPI print rippled via foreign money markets, reinforcing the session’s theme of diverging central financial institution trajectories throughout main economies.

Try the foreign exchange information and financial updates you will have missed within the newest buying and selling session!

Foreign exchange Information Headlines & Information:

• New Zealand Meals Worth Index for January 2026: 4.6% y/y (4.2% y/y forecast; 4.0% y/y earlier)
• Australia RBA Assembly Minutes: The RBA’s February minutes present a unanimous 25 bp hike because the Board judged that coverage had change into too free, monetary circumstances had eased, and demand was outpacing provide, warranting tighter financial coverage to realign circumstances with their aims. Inflation dangers had been assessed as having “shifted materially” to the upside, with underlying inflation anticipated to remain above the two–3% goal band for an prolonged interval, so future charge strikes are left knowledge‑dependent with no preset path however a transparent hawkish tilt.
• Japan Tertiary Trade Exercise Index for December 2025: -0.5% (-0.1% forecast; -0.2% earlier)
• Germany CPI Development Price Remaining for January 2026: 0.1% m/m (0.1% m/m forecast; 0.0% m/m earlier); 2.1% y/y (2.1% y/y forecast; 1.8% y/y earlier)
• U.Okay. Employment Change for December 2025: 52.0k (-40.0k forecast; 82.0k earlier)
• U.Okay. Unemployment Price for December 2025: 5.2% (5.1% forecast; 5.1% earlier)
• U.Okay. Claimant Rely Change for January 2026: 28.6k (22.0k forecast; 17.9k earlier)
• Germany ZEW Financial Sentiment Index for February 2026: 58.3 (61.0 forecast; 59.6 earlier)
• U.S. ADP Employment Change Weekly for January 31, 2026: 10.25k (6.5k earlier)
• Canada Wholesale Gross sales Remaining for December 2025: 2.0% m/m (2.1% m/m forecast; -1.8% m/m earlier)
• Canada CPI Development Price for January 2026: 0.0% m/m (0.2% m/m forecast; -0.2% m/m earlier); 2.3% y/y (2.5% y/y forecast; 2.4% y/y earlier)
  • Canada Core CPI Development Price for January 2026: 0.2% m/m (0.4% m/m forecast; -0.4% m/m earlier); 2.6% y/y (2.8% y/y forecast; 2.8% y/y earlier)
• NY Empire State Manufacturing Index for February 2026: 7.1 (3.0 forecast; 7.7 earlier)
• NAHB Housing Market Index for February 2026: 36.0 (41.0 forecast; 37.0 earlier)
• New Zealand International Dairy Commerce Worth Index for February 17, 2026: 3.6% (6.7% earlier)
• Fed member Michael Barr famous on Tuesday that it’ll “doubtless be acceptable to carry charges regular for a while” whereas the Fed evaluates incoming knowledge, the evolving outlook, and the stability of dangers.
• Fed member Goolsbee stated on Tuesday that “a number of extra” rate of interest cuts in 2026 are doable if the Fed can present inflation is on a transparent path again to the two% goal.

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Broad Market Worth Motion:

Tuesday’s session delivered an uncommon correlation image, with gold and oil absorbing the session’s steepest losses, however equities managed to claw again from intraday lows. AI disruption anxiousness dominated the narrative, pulling capital away from treasured metals and speculative property whereas leaving equities in a risky, whipsaw state.

The S&P 500 traded in a large intraday vary, briefly breaking under its 100-day shifting common earlier than recovering to shut close to 6,843, up roughly 0.11% on the day. The index opened sharply decrease within the early U.S. session, plunging near 1% and tagging the 6,775 space earlier than patrons stepped in. A robust restoration via the noon session pushed the index towards 6,867, however sellers returned into the afternoon and the index light into the shut. Over 250 S&P 500 constituents declined on the day, with software-related names among the many more durable hit areas.

Gold was the session’s worst performer on a share foundation among the many tracked property, declining roughly 2.31% to shut close to $4,878 per ounce. The valuable steel opened close to $4,990 earlier than promoting stress accelerated sharply, dropping to a low round $4,860 earlier than stabilizing and partially recovering via the early London session. Then got here the US selloff, which doubtless mirrored a mix of skinny Asian liquidity resulting from Lunar New 12 months holidays throughout a lot of the area — which usually reduces bodily demand help — and US greenback power.

Bitcoin (BTC/USD) declined roughly 1.21% to commerce close to $67,660, in step with the broader risk-off tone. Bitcoin had opened the Asian session close to $68,850 and drifted decrease via the in a single day hours, ultimately breaking under the $67,625 help space throughout the early U.S. session earlier than discovering patrons and stabilizing in a uneven vary between roughly $67,600 and $68,200 via the afternoon. The transfer appeared to correlate with the broader danger sentiment moderately than any crypto-specific catalyst.

WTI crude oil fell roughly 2.17% to settle close to $62.20 per barrel, giving again a notable intraday acquire. Oil had truly rallied sharply throughout the London session, climbing from round $62.80 to a excessive close to $63.95 in early European hours, probably reflecting preliminary optimism round U.S.-Iran nuclear talks. Nevertheless, the positive aspects reversed sharply on the U.S. session open, with oil promoting off aggressively via mid-morning to a low close to $61.75 earlier than consolidating round $62.00 to $62.50 for the rest of the day. Reviews that the U.S. and Iran had made progress in nuclear talks had been cited as a headwind for crude, as a possible deal might deliver further Iranian provide again to world markets.

U.S. 10-year Treasury yields edged increased by roughly 0.35%, settling close to 4.055%. Yields had trended decrease throughout the late Monday session via the early hours of Tuesday, dipping to a low close to 4.020% across the London open earlier than reversing increased. Yields climbed steadily via the U.S. session, briefly touching 4.060% close to noon earlier than stabilizing. The modest uptick appeared inconsistent with the risk-off tone in equities and sure mirrored the Fed audio system reinforcing the “maintain for longer” message moderately than any significant shift in charge expectations.

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FX Market Conduct: U.S. Greenback vs. Majors

Overlay of USD vs. Majors – Chart Quicker With TradingView

The U.S. greenback traded in an intraday vary on Tuesday, finally closing combined in opposition to main currencies with an arguably web bearish lean general. The session featured two distinct macro catalysts — the U.Okay. labor market report within the London session and the Canada CPI within the U.S. session — every of which drove notable however finally transient strikes for the greenback’s key counterparts.

Throughout the Asian session, the U.S. greenback noticed comparatively low volatility and traded principally sideways with an arguably web bullish lean in opposition to the majors. Liquidity was thinned by Lunar New 12 months holidays throughout mainland China, Hong Kong, Singapore, South Korea, and Taiwan, which restricted directional follow-through. The session’s notable growth was a pointy drop in USD/JPY, which correlated with report cited former Financial institution of Japan board member Seiji Adachi, flagging April because the more than likely timing for the following BOJ charge hike. The transfer bolstered expectations that Japan’s coverage normalization cycle stays ongoing, with additional tightening towards 1.25% thought of doable over the medium time period. Elsewhere, RBA minutes confirmed a unanimous resolution to hike 25 foundation factors in February, with the board acknowledging that inflation dangers had “shifted materially” to the upside — a hawkish tone that offered comparatively little help to the Australian greenback.

The London session introduced the day’s first main FX catalyst. On the open, the USD briefly bounced then pulled again, ultimately discovering help mid-morning London earlier than rallying into the U.S. session open. The dominant driver was doubtless the U.Okay. labor market report, which got here in softer than anticipated throughout the board. The unemployment charge rose to five.2%, its highest degree since February 2021, exceeding the 5.1% forecast. The Claimant Rely Change additionally shocked to the upside at 28.6k versus the 22.0k anticipated. The softer knowledge firmed up market pricing for a 25 foundation level Financial institution of England charge minimize on the subsequent assembly, with implied likelihood rising to round 75%. Sterling got here underneath notable promoting stress following the discharge, with USD/GBP posting the session’s largest acquire amongst greenback pairs. Individually, Germany’s ZEW Financial Sentiment Index for February printed at 58.3, lacking the 61.0 forecast barely, producing solely a muted market response.

After the U.S. session open, the USD continued to maneuver increased earlier than discovering a prime across the London shut, then fell again decrease via the rest of the session. The day’s second main FX catalyst got here with the Canada CPI launch for January, which printed meaningfully under expectations throughout the board. Headline CPI got here in flat on a month-to-month foundation (0.0% m/m versus +0.2% forecast) and slowed to 2.3% year-over-year, undershooting the two.5% consensus. Core CPI additionally upset at 0.2% m/m versus 0.4% anticipated. The information sparked a broad-based CAD softening.

A number of Fed audio system crossed the wires throughout the U.S. afternoon, arguably delivering a directional affect on the greenback. Chicago Fed President Goolsbee maintained that a number of extra charge cuts in 2026 stay doable if inflation continues its descent towards 2%, whereas Governor Barr struck a extra cautious tone, calling for regular charges whereas the Fed assesses incoming knowledge. The combined Fed messaging doubtless contributed to the greenback’s drift decrease into the shut.

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Upcoming Potential Catalysts on the Financial Calendar

• New Zealand PPI for December 31, 2025 at 9:45 pm GMT
• Japan Steadiness of Commerce for January 2026 at 11:50 pm GMT
• Australia Wage Worth Index  for December 31, 2025 at 12:30 am GMT
• RBNZ Curiosity Price Resolution for February 18, 2026 at 1:00 am GMT
• RBNZ Press Convention at 2:00 am GMT
• U.Okay. Inflation Updates for January 2026 at 7:00 am GMT
• Euro space ECB Cipollone Speech at 9:00 am GMT
• U.S. MBA Mortgage Purposes for February 13, 2026 at 12:00 pm GMT
  • U.S. MBA 30-12 months Mortgage Price for February 13, 2026 at 12:00 pm GMT
• U.S. Housing Begins for December 2025 at 1:30 pm GMT
• U.S. Constructing Permits Prel for December 2025 at 1:30 pm GMT
• U.S. Sturdy Items Orders for December 2025 at 1:30 pm GMT
• U.S. NY Fed Providers Exercise Index for February 2026 at 1:30 pm GMT
• U.S. Manufacturing & Industrial Manufacturing for January 2026 at 2:15 pm GMT
• Euro space ECB Schnabel Speech at 5:00 pm GMT
• U.S. Fed Bowman Speech at 6:00 pm GMT
• U.S. FOMC Minutes at 7:00 pm GMT

Wednesday’s motion doubtless begins with the Reserve Financial institution of New Zealand coverage resolution (Try our Occasion Information right here), the place the RBNZ is broadly anticipated to carry charges regular. Markets shall be intently watching the coverage assertion and ahead steering for any alerts concerning the potential for renewed tightening later in 2026, significantly given Tuesday’s higher-than-expected New Zealand meals worth inflation studying for January and broader world inflation issues.

Due within the morning London session, the U.Okay. CPI report for January will entice elevated consideration following Tuesday’s deteriorating labor market knowledge, which pushed Financial institution of England charge minimize expectations to round 75% for the following assembly. A softer-than-expected inflation print might reinforce the case for near-term BoE easing and lengthen sterling’s weak spot, whereas a shock to the upside would doubtless immediate merchants to reassess the aggressive charge minimize pricing that despatched the pound sliding on Tuesday.

Wednesday’s U.S. calendar is headlined by three potential U.S. updates. January Housing Begins and Constructing Permits, which shall be watched for any indicators of enchancment following Tuesday’s weak NAHB Housing Market Index print of 36 — nicely under the 41 forecast and pointing to continued pessimism amongst homebuilders. The December Sturdy Items Orders advance report rounds out the U.S. knowledge slate. Markets will focus significantly on the core studying — non-defense capital items orders excluding plane — as a gauge of enterprise funding urge for food heading into 2026.

The FOMC assembly minutes from the January 27-28 coverage resolution are due Wednesday afternoon and represents essentially the most vital potential USD catalysts. Markets shall be parsing the minutes for the depth of inside debate across the resolution to carry charges regular, together with the dissent from Governors Waller and Miran who argued for a right away minimize. Any language across the threshold for resuming easing, or the committee’s interpretation of tariff-driven worth pressures as transitory versus persistent, might generate notable strikes in Treasuries and the greenback.

Keep frosty on the market, foreign exchange pals!

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