Relative Strength & Strategy Insights | Updated: Feb 23, 2026 at 12:02:24
GDP growth slowed sharply to 1.4% in Q4 2025 (vs 4.4% previous), consumer sentiment revised lower to 56.6, PCE inflation rose 0.4% in December (above expectations), and mixed housing/industrial data suggest economic momentum fading.
German ZEW sentiment improved (58.3 vs 59.6 previous), but industrial production declined (-1.4% vs -1.2% expected), German inflation stable at 2.1%, and French inflation weakening. Current account surplus improved to 34.6B.
GDP growth turned positive (0.1% QoQ vs -0.6% previous), machinery orders surged 19.1% MoM, exports grew 16.8% YoY, and trade deficit narrowed significantly to -1,152.7B (vs -2,500.0B expected).
Retail sales strong (1.8% MoM vs 0.2% expected), but unemployment rose to 5.2% (vs 5.1% expected), inflation fell to 3.0% YoY, and employment change was positive at 52.0k.
Australian dollar weakened against majors, stock market declined, wage growth stable at 0.8% QoQ, employment change missed at 17.8k (vs 25.0k expected), and part-time employment fell -32.7k.
Inflation cooled to 2.3% YoY (vs 2.5% expected), retail sales declined -0.4% MoM, but trade deficit narrowed to -1.31B (vs -2.4B expected) and manufacturing sales improved to 0.6% MoM.
Electronic card retail sales fell -1.1% (vs 0.5% expected), PPI input declined -0.5% QoQ, trade balance turned to deficit -0.52B (vs -0.1B expected), and RBNZ held rates steady at 2.25%.
GDP growth turned positive (0.2% QoQ vs -0.5% previous), trade surplus widened to 3.6B (vs 3.3B expected), though industrial production declined -0.7% YoY.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| EUR/JPY & GBP/JPY | SHORT BASKET | Dist: +150 pips | Isolating JPY strength against two European currencies with mixed fundamentals. JPY benefits from improving GDP and trade data while EUR and GBP face inflation/employment headwinds. |
| AUD/USD & NZD/USD | LONG BASKET | Dist: +100 pips | Isolating USD weakness against two commodity currencies. Both AUD and NZD are weak individually, but USD shows stronger deterioration with slowing GDP and consumer sentiment. |
| EUR/CHF & GBP/CHF | SHORT BASKET | Dist: +80 pips | Isolating CHF strength against European peers. CHF shows improving growth and trade balance while EUR and GBP have mixed data with inflation concerns. |
| USD/JPY & AUD/JPY | SHORT BASKET | Dist: +130 pips | Isolating JPY strength against two currencies with weakening trends. JPY fundamentals improving while USD faces growth slowdown and AUD shows employment weakness. |
| GBP/AUD & EUR/AUD | LONG BASKET | Dist: +90 pips | Isolating AUD weakness against two European currencies. AUD shows broad weakness in currency and employment data while GBP and EUR have relatively stronger retail/confidence metrics. |
| CAD/JPY & NZD/JPY | SHORT BASKET | Dist: +110 pips | Isolating JPY strength against two commodity currencies with mixed/weak data. JPY's strong GDP and trade contrast with CAD's cooling inflation and NZD's declining retail activity. |