Relative Strength & Strategy Insights | Updated: Feb 17, 2026 at 06:02:25
Soft CPI data (0.2% vs 0.3% expected) and lower-than-expected retail sales (0.0% vs 0.4% expected) suggest cooling inflation and consumption, increasing Fed easing expectations. Mixed job data with lower-than-expected nonfarm payrolls (130k vs 40k expected) but strong wage growth (0.4% MoM).
Industrial production declined 1.4% MoM (first drop in 4 months), but GDP growth stable at 0.3% QoQ and trade balance improved to €12.6B. German wholesale prices rose 0.9% MoM, suggesting some inflationary pressure despite industrial weakness.
News reports yen weakening against majors. Economic data mixed: strong current account surplus (¥7,288B vs ¥1,400B expected) but machine tool orders growth slowing (25.3% vs 9.5% expected). PPI stable at 2.3% YoY.
News reports pound strengthening against majors. Economic data mixed: GDP growth modest (0.1% QoQ vs 0.2% expected) but retail sales monitor improved (2.3% YoY vs 1.3% expected) and trade deficit narrowed slightly.
Consumer confidence declined (-2.6% vs -2.0% expected) and building permits fell sharply (-14.9% MoM), but investment lending for homes surged (7.9% vs 5.0% expected). Household spending growth slowed (5.0% YoY vs 6.0% expected).
Market rallied on softer US CPI data. Building permits rebounded strongly (6.8% MoM vs 9.7% expected after -13.1% previous). New vehicle sales declined but this is lagging data.
Business NZ PMI remains expansionary at 55.2 (vs 55.0 expected). Business inflation expectations rose to 2.37% (vs 1.7% expected). Visitor arrivals growth slowed to 7.0% YoY.
Swiss market gained on inflation data. Consumer confidence improved (-30.0 vs -31.0 expected). Inflation stable at 0.1% YoY. Market performance positive despite holiday-thinned trading.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| GBP/USD & CAD/USD | LONG BASKET | Dist: +150 pips | Isolating USD weakness by longing two currencies showing relative strength (GBP strengthening per news, CAD rallying on US data). GBP has improving retail data, CAD has strong building permits rebound. |
| EUR/JPY & CHF/JPY | LONG BASKET | Dist: +180 pips | Isolating JPY weakness (yen falling against majors) by longing European currencies. EUR has stable GDP and trade surplus, CHF has improving sentiment and stable inflation. |
| AUD/JPY & NZD/JPY | LONG BASKET | Dist: +140 pips | Isolating JPY weakness with commodity currencies. AUD has strong housing investment data, NZD has expansionary PMI and rising inflation expectations. Both benefit from risk-on sentiment from softer US data. |
| EUR/GBP & CHF/GBP | SHORT BASKET | Dist: -90 pips | Isolating GBP strength (pound rising per news) against European peers. GBP outperforming EUR on retail data vs industrial weakness, and CHF momentum may fade against strong GBP. |
| CAD/AUD & NZD/AUD | LONG BASKET | Dist: +110 pips | Isolating AUD weakness (poor consumer confidence and building permits) against commodity peers. CAD has stronger building permits rebound, NZD has better business sentiment and inflation expectations. |
| USD/CHF & USD/JPY | SHORT BASKET | Dist: -130 pips | Isolating USD weakness against safe-haven and funding currencies. Both CHF and JPY may benefit from risk-off potential, but USD weakness from soft inflation data is the dominant theme. |