Relative Strength & Strategy Insights | Updated: Feb 18, 2026 at 06:02:25
Homebuilder confidence unexpectedly dipped, NY manufacturing edged down, but dollar climbed vs EUR/GBP. Retail sales flat (0.0% vs 0.4% expected), inflation data mixed with core CPI MoM at 0.3% (vs 0.2% expected).
Eurozone industrial output data pending, German wholesale prices rose (0.9% MoM vs 0.3% expected), but EUR weakened against USD. GDP growth stable at 0.3% QoQ.
Average cash earnings beat (2.4% vs 1.0% expected), current account surged (7,288.0B vs 1,400.0B expected), but machine tool orders strong (25.3% vs 9.5% expected). PPI stable at 0.2% MoM.
Unemployment at near 5-year high (5.2%), wage growth softened, strengthening case for BoE rate cuts. GDP growth weak (0.1% MoM vs 0.1% expected, 1.0% YoY vs 1.2% expected), manufacturing production fell (-0.5% MoM).
RBA minutes showed rate hike considered to address persistent inflation. Westpac consumer confidence slightly better (-2.6% vs -2.0% expected), investment lending for homes surged (7.9% vs 5.0% expected).
Softer-than-expected inflation data, weak precious metals hurting materials/energy sectors. Building permits beat (6.8% vs 9.7% expected) but new motor vehicle sales dropped (127.25k vs 150.8k previous).
Business NZ PMI solid (55.2 vs 55.0 expected), visitor arrivals growth slowed (7.0% vs 8.2% previous). Business inflation expectations rose (2.37% vs 1.7% expected).
Consumer confidence improved (-30.0 vs -31.0 expected), inflation stable (0.1% YoY as expected). No strong directional signals from data.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| GBP/USD & AUD/USD | SHORT BASKET | Dist: -150 pips | Isolating USD mixed sentiment by shorting GBP (weak fundamentals) and AUD (strong fundamentals) against USD to hedge single-currency exposure. GBP weakness from high unemployment vs AUD strength from hawkish RBA. |
| EUR/JPY & GBP/JPY | LONG BASKET | Dist: +140 pips | Isolating JPY mixed sentiment by longing EUR and GBP against JPY. JPY faces mixed data while EUR has stable GDP and GBP has rate cut expectations that may be priced in. |
| AUD/CAD & NZD/CAD | LONG BASKET | Dist: +130 pips | Isolating CAD weakness by longing AUD and NZD against CAD. CAD hurt by soft inflation and commodity weakness, while AUD has hawkish RBA and NZD has solid PMI. |
| EUR/CHF & GBP/CHF | LONG BASKET | Dist: +110 pips | Isolating CHF mixed sentiment by longing EUR and GBP against CHF. CHF lacks strong catalysts while EUR has stable growth and GBP may see oversold bounce from rate cut expectations. |
| USD/JPY & CAD/JPY | SHORT BASKET | Dist: -120 pips | Isolating JPY mixed sentiment by shorting USD and CAD against JPY. USD has mixed data and CAD is weak, while JPY has strong current account and earnings data. |
| AUD/NZD & CAD/NZD | SHORT BASKET | Dist: -100 pips | Isolating NZD mixed sentiment by shorting AUD and CAD against NZD. NZD has solid PMI and rising inflation expectations vs AUD's hawkishness and CAD's weakness. |