Relative Strength & Strategy Insights | Updated: Feb 13, 2026 at 12:02:37
Stronger-than-expected US jobs data (+130k vs 70k expected) pushed back Fed rate cut expectations, supporting dollar strength against CAD and other majors. Upcoming CPI data could reinforce hawkish stance.
Mixed signals: European shares poised for firm open on trade optimism, but German/French data mixed (German retail sales beat, French inflation misses). ECB rate decision expected unchanged. Overall neutral bias.
Japanese stock market at record highs but due for profit-taking, suggesting risk-on sentiment that typically weakens JPY. Monetary base contracting (-9.5% YoY) indicates continued accommodative policy.
Political uncertainty and BoE rate cut speculations pressuring pound. UK GDP forecast at modest 0.2% growth. Housing data mixed but overall dovish BoE expectations dominate.
Australian market notably higher with strong corporate earnings, building approvals data ahead. RBA expected to hold rates at 3.85%. Commodity prices up 2.6% YoY supports commodity currency.
USD climbed against CAD in recent session. Unemployment rate expected at 6.8% (high), employment change forecast negative. Ivey PMI expected to decline slightly. Oil prices supportive but labor data weak.
Manufacturing PMI slowed to 55.2 but still expanding. Employment data mixed (0.5% QoQ growth but unemployment at 5.4%). Dairy prices up 6.7% provides some support.
Retail sales beat expectations (1.0% MoM vs 0.4% forecast), but manufacturing PMI at 48.8 remains contractionary. Unemployment steady at 3.2%. Overall neutral with slight positive bias from consumption.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| AUD/USD & NZD/USD | LONG BASKET | Dist: +150 pips | Isolating USD strength reversal potential by longing two commodity currencies with positive fundamentals (AUD strong earnings, NZD dairy prices) to hedge against single-currency AUD or NZD specific risks while betting on USD pullback after strong jobs data. |
| EUR/JPY & GBP/JPY | LONG BASKET | Dist: +180 pips | Isolating JPY weakness by longing two European currencies against JPY. JPY weakened by risk-on sentiment and accommodative policy, while EUR has trade optimism and GBP has oversold conditions from political uncertainty. |
| USD/CAD & USD/CHF | SHORT BASKET | Dist: -100 pips | Isolating USD overextension after strong jobs data by shorting USD against two currencies with improving fundamentals: CAD supported by oil, CHF with strong retail sales. Neutralizes single-currency CAD oil dependency or CHF safe-haven risks. |
| EUR/AUD & GBP/AUD | SHORT BASKET | Dist: -130 pips | Isolating AUD strength by shorting two European currencies against AUD. AUD benefits from strong domestic market and commodity prices, while EUR has mixed data and GBP has political headwinds. |
| CAD/JPY & AUD/JPY | LONG BASKET | Dist: +200 pips | Isolating JPY weakness by longing two commodity/risk currencies against JPY. JPY weak on risk-on sentiment, while CAD and AUD benefit from commodity exposure and relative strength versus other majors. |
| EUR/GBP & CHF/GBP | LONG BASKET | Dist: +90 pips | Isolating GBP weakness by longing EUR and CHF against GBP. GBP pressured by political uncertainty and BoE cut expectations, while EUR has trade optimism and CHF has stable fundamentals. Neutralizes single-currency EUR ECB risks or CHF safe-haven flows. |