Relative Strength & Strategy Insights | Updated: Feb 08, 2026 at 12:02:29
Mixed data: strong PPI (0.5% MoM vs 0.2% forecast) and factory orders (2.7% vs 1.4%), but weak consumer confidence (84.5 vs 88.0 forecast) and jobless claims (209k vs 205k). Fed funds rate unchanged at 3.75%.
Negative sentiment: Eurozone retail sales fell more than expected (-0.5% vs -0.2%), German Ifo business climate missed (87.6 vs 88.4), French consumer confidence stagnant (90.0). European stocks cautious ahead of ECB decision.
Negative economic signals: Japanese market notably lower following Wall Street cues, industrial production weak (-0.1% MoM), retail sales disappointing (-2.0% MoM vs 0.3% forecast). Leading indicators index missed (109.9 vs 110.5).
Cautious sentiment: FTSE 100 drifting lower ahead of BoE announcement, but some positive data with BRC shop price inflation (1.5% vs 0.8% forecast) and car production (17.7% vs 6.7%).
Positive inflation data: Inflation rate YoY beat (3.8% vs 3.6% forecast), NAB business confidence improved (3.0 vs 2.0), export prices strong (3.2% vs -0.5% forecast). However, Australian stock market sharply lower on global risk-off.
Mixed signals: BoC held rates at 2.25%, wholesale sales beat (2.1% vs 0.4%), but trade balance worse (-2.2B vs -0.6B forecast), GDP stagnant (0.0% vs 0.2% forecast).
Slightly positive: Balance of trade beat (0.05B vs -0.18B forecast), ANZ business confidence strong (64.1 vs 73.9 forecast), but credit card spending weak (-0.3% vs previous 4.7%).
Negative data: Economic sentiment index missed badly (-4.7 vs 5.5 forecast), KOF leading indicators slightly missed (102.5 vs 103.2). Balance of trade in line (3.0B vs 3.8B forecast).
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| AUD/USD & NZD/USD | LONG BASKET | Dist: +150 pips | Isolating USD mixed/weak sentiment by longing two commodity currencies with positive fundamentals (AUD inflation beat, NZD trade surplus) to hedge against specific antipodean risks. |
| EUR/JPY & GBP/JPY | SHORT BASKET | Dist: -180 pips | Isolating JPY weakness against two European currencies with mixed sentiment, creating a basket to reduce single-currency exposure while capitalizing on JPY's poor economic data and risk-off flows. |
| EUR/CHF & GBP/CHF | LONG BASKET | Dist: +100 pips | Isolating CHF weakness (poor economic sentiment) against two European majors with mixed but relatively stronger fundamentals, creating a pairs trade to reduce single-currency European exposure. |
| AUD/CAD & NZD/CAD | LONG BASKET | Dist: +130 pips | Isolating CAD mixed sentiment against two commodity peers with stronger recent data (AUD inflation beat, NZD trade surplus), hedging against commodity correlation while exploiting rate differentials. |
| EUR/AUD & GBP/AUD | SHORT BASKET | Dist: -140 pips | Isolating AUD strength (inflation beat) against two European currencies with weakening/mixed sentiment, creating a basket to reduce exposure to single European currency risks. |
| USD/CHF & USD/JPY | SHORT BASKET | Dist: -160 pips | Isolating USD mixed sentiment against two safe-havens with weakening fundamentals (CHF economic sentiment miss, JPY poor data), creating a hedge against USD-specific moves while capitalizing on weak JPY/CHF dynamics. |