Relative Strength & Strategy Insights | Updated: Feb 16, 2026 at 12:02:22
CPI data shows lower-than-expected inflation (0.2% vs 0.3% expected), reducing Fed hawkish pressure. Retail sales flat (0.0% vs 0.4% expected) and jobless claims rising (227k vs 225k expected) indicate slowing economic momentum.
GDP growth stable at 0.3% QoQ, employment improving (+0.7% YoY), and trade surplus expanding to 12.6B. However, German wholesale prices show volatility (0.9% MoM vs 0.3% expected) and European stock markets (CAC, DAX) show weakness.
Japanese market sharply lower, machine tool orders beat expectations (25.3% vs 9.5%), but PPI stable (2.3% YoY) and foreign bond outflows (-365.7B). Current account surplus massive (7,288.0B vs 1,400.0B expected) provides some support.
GDP growth weak (0.1% QoQ vs 0.2% expected), manufacturing production disappointing (-0.5% MoM vs -0.3% expected). However, retail sales monitor improved (2.3% YoY vs 1.3% expected) and trade deficit narrowed slightly (-4.34B vs -6.0B expected).
Australian market significantly lower, consumer confidence declining (-2.6% vs -2.0% expected), building permits plunging (-14.9% MoM), and investment lending slowing (7.9% vs 17.6% previous). Household spending also disappointing (5.0% YoY vs 6.0% expected).
Building permits rebounded strongly (6.8% MoM vs -13.1% previous), but new vehicle sales dropped sharply (127.25k vs 150.8k previous). Oil inventory builds (8.53M vs -3.46M previous) weigh on commodity-linked currency.
Business NZ PMI remains expansionary (55.2 vs 55.0 expected), but business inflation expectations elevated (2.37% vs 1.7% expected). Visitor arrivals growth slowing (7.0% vs 8.2% previous).
Inflation stable (0.1% YoY as expected), consumer confidence improved (-30.0 vs -31.0 expected). Safe-haven flows likely as global markets weaken and USD shows signs of softening.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| EUR/USD & GBP/USD | LONG BASKET | Dist: +150 pips | Isolating USD weakness by longing two European currencies. EUR shows stable fundamentals while GBP has mixed data, providing diversification against specific European risks while capturing broad USD decline. |
| AUD/USD & NZD/USD | SHORT BASKET | Dist: -100 pips | Capitalizing on USD weakness but hedging against commodity currency risks. AUD shows clear weakness while NZD is mixed, allowing capture of USD decline while neutralizing specific antipodean economic vulnerabilities. |
| EUR/JPY & GBP/JPY | LONG BASKET | Dist: +180 pips | Isolating JPY weakness against two European currencies. JPY shows weakening fundamentals with market declines and outflows, while EUR and GBP offer relative stability and diversification against European-specific headwinds. |
| USD/CHF & USD/JPY | SHORT BASKET | Dist: -130 pips | Double exposure to USD weakness against safe-haven CHF and weakening JPY. CHF shows strengthening fundamentals while JPY is weak, providing asymmetric upside if USD decline accelerates against both currencies. |
| AUD/JPY & CAD/JPY | LONG BASKET | Dist: +140 pips | Isolating JPY weakness against commodity currencies. AUD and CAD both show mixed-to-weak fundamentals but provide diversification across different commodity exposures (metals vs oil) while capturing JPY depreciation. |
| EUR/CHF & GBP/CHF | SHORT BASKET | Dist: -90 pips | Capitalizing on CHF strength against European peers. CHF shows safe-haven appeal with stable inflation, while EUR and GBP face mixed economic data and market weakness, creating favorable risk-reward for CHF longs. |