Relative Strength & Strategy Insights | Updated: Feb 19, 2026 at 12:02:22
Recent CPI data shows inflation cooling (2.4% YoY vs 2.7% previous), supporting Fed pause expectations, but retail sales were flat (0.0% MoM) and jobless claims remain elevated. Mixed signals with inflation down but consumption weakening.
Eurozone industrial production fell 1.4% in December (first decline in 4 months), but German DAX at 4-week high and French CAC rising. GDP growth stable at 0.3% QoQ. Mixed industrial weakness vs equity market strength.
Core machinery orders surged 19.1% in December, BoJ rate hike speculation persists, yen strengthened against majors. Despite trade deficit, strong capital investment signals and monetary policy normalization expectations.
Pound rising despite inflation falling to 10-month low (3.0% YoY), suggesting market pricing in delayed BoE cuts. Sterling strengthening against majors in European sessions, showing resilience to dovish data.
Unemployment steady at 4.1%, wage growth stable at 0.8% QoQ, but Westpac consumer confidence declined (-2.6%) and building permits fell sharply (-14.9% MoM). Mixed labor strength vs weakening housing and sentiment.
Building permits rebounded (6.8% MoM) but new motor vehicle sales dropped significantly (127.25k vs 150.8k previous). Lacking strong catalysts while USD data shows mixed but potentially stabilizing inflation environment.
RBNZ expected to hold rates steady, Business NZ PMI at 55.2 (expansionary), but business inflation expectations easing (2.37% vs 2.28% previous). Mixed with steady policy and decent activity but inflation expectations moderating.
Consumer confidence improved slightly (-30.0 vs -31.0 forecast), inflation stable at 0.1% YoY. Lacking strong directional catalysts, typically acts as safe haven amid mixed global conditions.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| GBP/USD & AUD/USD | LONG BASKET | Dist: +150 pips | Isolating USD weakness with two currencies showing resilience (GBP rising despite dovish data, AUD with stable employment). Diversifies away from single-currency risk while capitalizing on USD mixed signals. |
| EUR/JPY & GBP/JPY | SHORT BASKET | Dist: -180 pips | Capitalizing on JPY strength (BoJ normalization expectations, strong machinery orders) against two European currencies with mixed fundamentals. Hedges against Eurozone industrial weakness and GBP overextension. |
| AUD/CAD & NZD/CAD | LONG BASKET | Dist: +100 pips | Isolating CAD weakness against commodity peers with better fundamentals. AUD has stable employment, NZD has expansionary PMI, while CAD shows consumption weakness (vehicle sales drop). |
| EUR/CHF & GBP/CHF | SHORT BASKET | Dist: -90 pips | Playing European currency weakness (EUR industrial decline, GBP potentially overbought) against CHF as safe haven. CHF benefits from mixed global conditions while European data shows cracks. |
| USD/JPY & USD/CHF | SHORT BASKET | Dist: -140 pips | Isolating USD weakness against two safe-haven currencies. JPY strengthened on BoJ speculation, CHF stable. USD shows cooling inflation but weak consumption, favoring safe havens. |
| GBP/AUD & EUR/AUD | LONG BASKET | Dist: +110 pips | Capitalizing on GBP/EUR relative strength vs AUD weakness. GBP showing resilience, EUR has equity support, while AUD faces housing and confidence headwinds despite labor stability. |