Relative Strength & Strategy Insights | Updated: Feb 12, 2026 at 12:02:43
Weak retail sales data (unchanged in Dec vs expectations), Fed rate cut expectations increasing (traders pricing in 2 more cuts after weak data), gold surging on weaker dollar, mixed economic data ahead including jobs reports creating uncertainty.
European markets mixed on earnings, some positive sentiment from Eurozone investor sentiment improvement, but upcoming inflation data (Flash CPI) expected to show cooling (1.7% vs 1.9% previous), German retail sales mixed (0.1% MoM vs 0.5% forecast).
Japanese stocks at record highs (Nikkei 225 above 57,650), current account surplus (728.8B yen in Dec), positive market momentum despite potential profit-taking, upcoming producer price data may provide further direction.
UK job placement downturn slowing (positive), but FTSE 100 in negative territory, housing data mixed (Nationwide prices 0.3% MoM vs 0.6% forecast), BoE expected to hold rates steady with mixed MPC votes.
Australian market notably higher (S&P/ASX 200 near 9,000), commodity prices up (2.6% YoY vs -4.4% forecast), RBA expected to hold rates at 3.85%, positive trade balance (3.37B vs 2.94B previous).
Bay Street opening mixed, tracking commodity prices and subdued European stocks, unemployment rate expected to rise (6.5% vs 6.8% forecast but still elevated), employment change negative (-24.8k vs -10.0k forecast).
Building permits disappointing (-4.6% MoM vs 1.0% forecast), but employment data positive (0.5% QoQ vs 0.2% forecast), dairy prices up (6.7% in GDT auction), participation rate steady at 70.5%.
Swiss market settled higher after choppy session, retail sales strong (1.0% MoM vs 0.4% forecast, 2.9% YoY vs 2.1% forecast), manufacturing PMI improving (48.8 vs 46.2 forecast), unemployment rate low at 3.2%.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| AUD/USD & NZD/USD | LONG BASKET | Dist: +150 pips | Isolating USD weakness by longing two commodity currencies (AUD and NZD) that benefit from risk-on sentiment and higher commodity prices, while neutralizing specific Australia/New Zealand economic risks through diversification. |
| EUR/JPY & GBP/JPY | SHORT BASKET | Dist: -180 pips | Isolating JPY strength against two European currencies with mixed fundamentals (EUR and GBP), as Japanese equities hit record highs and current account surplus supports yen, while Europe faces inflation cooling and political uncertainties. |
| CAD/CHF & USD/CHF | SHORT BASKET | Dist: -140 pips | Isolating CHF strength against two weakening North American currencies (CAD and USD), as Swiss data shows retail sales strength and manufacturing improvement while Canada faces employment weakness and US shows economic softening. |
| EUR/AUD & GBP/AUD | SHORT BASKET | Dist: -160 pips | Isolating AUD strength against two European currencies (EUR and GBP), as Australian markets surge with commodity support while Europe shows mixed signals and UK faces housing market concerns. |
| USD/JPY & CAD/JPY | SHORT BASKET | Dist: -200 pips | Isolating JPY strength against two weakening currencies (USD and CAD), as Japanese economic momentum contrasts with US rate cut expectations and Canadian employment deterioration. |
| NZD/CAD & AUD/CAD | LONG BASKET | Dist: +130 pips | Isolating CAD weakness against two commodity peers (NZD and AUD), as Canada's unemployment concerns contrast with Australia's market strength and New Zealand's employment growth, while all three benefit from commodity exposure. |