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As the USD/JPY chart shows, the pair posted solid bullish momentum in the second half of February. This move was driven by a combination of fundamental factors, including:

• → The appointment of two academics to the central bank’s board, both regarded as strong advocates of economic stimulus through a weaker yen and accommodative lending conditions.
• → Concerns over further interest rate hikes, voiced by Japanese Prime Minister Sanae Takaichi during a meeting with Bank of Japan Governor Kazuo Ueda.

Expectations of a softer yen led to renewed weakness in the currency (A→B), forming the upward trajectory highlighted in purple.

However, on Wednesday the pair retreated, which appears to be an interim pullback from point B. Technical analysis of the USD/JPY chart suggests that extending the move along the purple trajectory may prove challenging.

Factors that could favour the bears include:

• → The median line of the ascending channel (constructed from key reversal points marked by thicker lines). The median often acts as a balance zone where supply and demand converge and trends lose momentum.
• → The proximity of the significant 157.70 resistance level, which already acted as resistance in 2025. Although price broke above it in January 2026 (with the level briefly showing signs of support), following the sharp sell-off on 23 January it once again served as a barrier for bulls on 9 February.
• → Trend line R, drawn through the lower highs of 2026.

Therefore, it cannot be ruled out that the lower purple boundary may be breached by bears, potentially leading the market into a period of consolidation while awaiting fresh economic and political catalysts.

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Markets

Core bond and FX trading yesterday mostly was captured in technical trading. Eco data were few and uncertainty on AI moved to a bit to the background. US, UK and EMU yields stabilized or gained a few bps, taking a breather after this month’s protracted decline, often nearing first support levels. US yields added between 2.8 bps (5-y) and 1 bp (2-y). A $70 bln 5-y US Treasury auction tailed and met cautious investors interest. EMU yields changed less than 1 bp. Equity markets left AI-related uncertainty behind with Eurostoxx 50 (+0.93%) touching a new record. US indices gained between 0.63% (Dow) and 1.26% (Nasdaq), counting down to the Nvidia results after the close. FX cross rates stayed within the established ranges. The dollar initially held up well, but lost momentum as trading proceeded. US Trade Representative Jamieson Greer indicating that President Trump still intends to raise the global tariff to 15% (where appropriate) highlighted uncertainty related to US trade policy, often a negative for the dollar. EUR/USD regained the 1.18 big figure (close 1.181). For the DXY trade-weighted index, a test of the 98 big figure was rejected (close 97.7). The yen initially suffered from (perceived) pressure from the government on the BoJ to remain cautious on further policy tightening, but USD/JPY finally also eased from the intraday peak levels, closing at 156.4 from 155.9.

Asian equities show a mixed picture this morning. US futures are trading slightly in red. Nvidia results were strong but the market reaction for now is guarded. The dollar also loses modest ground (DXY.97.6, EUR/USD 1.182). The yuan continues its ‘astonishing’ comeback. At USD/CNY 6.84, the Chinese currency trades at the strongest level against the dollar since March 2023. The yen is on a (slightly) better footing compared to previous days. (Hawkish) BoJ member Takata advocated the central bank should engage in a further gear shift as he assesses that the 2% inflation target has been achieved. BoJ governor Ueda in an interview also indicated that the bank at least will take a close look at the data to decide on the timing of further hikes. The yen this morning ‘rebounds’ to USD/JPY 156. The US and EMU eco calendar mostly contains data that only have limited impact on trading. US weekly jobless claims are a wildcard. Also keep an eye at the a $44 bln 7-y US Treasury auction. On equity markets, question is which direction sentiment tilts after the Nvidia results. (Geo)politics might again come to the forefront as US-Iran nuclear talks resume in Geneva. Brent oil holds near $71 p/b. UK markets keep a close eye on a vote for a lawmaker seat in Manchester, seen as a ‘referendum’ on PM Starmer. A labour defeat might rekindle uncertainty similar to what happened early this month, potentially weighting on UK bonds and sterling. EUR/GBP for now holds just north of 0.87.

News & Views

The Bank of Korea unanimously decided to leave the Base Rate unchanged for a sixth meeting at 2.5%. Inflation is expected to remain stable near the target level. Consumer price and core inflation for this year are forecast at respectively 2.2% and 2.1% (vs 2.1% and 2% in November), affected by upward cost pressures on some items, including electronic devices. Economic growth is projected to continue improving at a stronger than expected pace, supported by a recovery in consumption and strong exports (global chip demand). The central bank now estimates growth at 2% for the year, up from 1.8% in November, with a balanced risk assessment. Risks to financial stability nevertheless remain as highlighted by volatility in FX (KRW, JPY), housing (price growth slowing in Seoul and surrounding areas thanks to government’s macroprudential policy) and stock markets. The BoK’s conditional interest rate horizon (doubled from 3 to 6 months) suggests a strong leaning to keeping policy rate stable over this time horizon. The Korean won this morning tested its best levels against USD so far this year at USD/KRW 1420 which is the neckline of a technical triple top formation with final target at 1360.

The IMF concluded its regular Article IV consultation of the US. Incorporating the effects of the various policy changes, staff expect growth to accelerate in 2026 to around 2.4% (on a q4/q4 basis). The inflationary impulse from tariffs is expected to wane in the coming months, allowing core PCE inflation to fall back to 2% by early 2027. Risks to the near-term outlook for growth and inflation are seen as balanced. The unemployment rate is seen steading close to 4% in 2026-2027 as the effects of slower employment growth and the ongoing slowing of population growth balance each other out. Such scenario should allow the Fed to lower the Fed funds target rate towards 3.25%-3.5% by year-end. Under current policies, the general government deficit is expected to remain in the 7-8 percent of GDP range, causing general government debt to reach 140 percent of GDP by 2031. Together with increasing levels of short-term debt this represents a growing stability risk to the US and global economy.

Daily Pivots: (S1) 1.1783; (P) 1.1799; (R1) 1.1826; More….

No change in EUR/USD's outlook and intraday bias stays neutral at this point. Near term risk will remain on the downside as long as 1.1928 resistance holds. Below 1.1740 temporary low will target 1.1576 support next. Firm break there should confirm rejection by 1.2 key psychological level and turn near term outlook bearish. However, break of 1.1928 argue that fall from 1.2081 has completed as a correction, and revive near term bullishness. Retest of 1.2081 should then be seen next.

In the bigger picture, as long as 55 W EMA (now at 1.1494) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will add to the case of long term bullish trend reversal. Next medium term target will be 138.2% projection of 0.9534 to 1.1274 from 1.0176 at 1.2581. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Daily Pivots: (S1) 155.54; (P) 156.19; (R1) 157.02; More...

Intraday bias in USD/JPY is turned neutral with current retreat. On the upside, above 156.81 temporary top will resumed the rally from 152.25 to 157.65 resistance first. Firm break there will target a retest on 159.44. high. On the downside, however, break of 153.90 will bring deeper fall to 152.25 support. Overall, with 38.2% retracement of 139.87 to 159.44 at 151.96 intact, price actions from 159.44 are seen as a corrective pattern. Also, rise from 139.87 is expected to resume through 159.44 at a later stage.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 151.93) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

Daily Pivots: (S1) 1.3509; (P) 1.3537; (R1) 1.3588; More...

Intraday bias in GBP/USD remains neutral for the moment. On the downside, below 1.3432 will resume the fall from 1.3867 to 1.3342 support. Firm break there should confirm that it's already correcting the whole rise from 1.2099. However, break of 1.3711 resistance will argue that the decline has completed as a near term correction, and turn bias back to the upside for retesting 1.3867.

In the bigger picture, as long as 1.3008 support holds, rise from 1.3051 (2022 low) should still be in progress for 1.4284 key resistance (2021 high). Decisive break there will add to the case of long term bullish trend reversal. However, firm break of 1.3008 will raise the chance of medium term bearish reversal and target 1.2099 support next.

Daily Pivots: (S1) 0.7712; (P) 0.7735; (R1) 0.7751; More….

Intraday bias in USD/CHF remains neutral as consolidation pattern from 0.7603 is still extending. In case of stronger rise, upside upside should be limited by 55 D EMA (now at 0.7828) to complete the pattern. On the downside, below 0.7627 will bring retest of 0.7603. Firm break there will resume larger down trend, and target 0.7382 projection level next. However, sustained break of 55 D EMA will indicate that a larger scale corrective bounce in underway and target 0.8039 resistance next.

In the bigger picture, down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8123 resistance holds.

No surprise, Nvidia announced another spectacular set of results when it reported its Q4 earnings yesterday, after the US closing bell. The company posted $68.1bn in revenue, 73% higher than the same period last year, with 90% of that coming from its data-center division. Net income almost doubled, and gross margin improved to 75% — all significantly better than analysts had expected.

Addressing concerns that Google’s TPUs — designed for AI inference, far more energy-efficient and cheaper than Nvidia’s — could steal business, Jensen Huang said that his company is “the king of inference today” and that the Blackwell and next-generation Vera Rubin platforms “will extend that leadership further”, adding that adoption of agentic AI is skyrocketing.

Although his words may sound over-the-top, Huang has delivered consistently on his promises over the past three years.

Looking ahead, Nvidia projected Q1 revenue of $78bn, well above the $73bn forecast by equity analysts.

In short: The results were great, the forecast was great, the guidance was great.

Beneath the surface, the gap between revenue and cash generated also narrowed meaningfully.

Nvidia rose 3% in after-hours trading and is likely to challenge the $200+ mark at the open. If that reaction seems modest given the strength of the results, it’s because important concerns remain:

1. The Coastal Journal — which had previously highlighted the gap between Nvidia’s revenue and cash, comparing its accounting practices to Enron’s — flagged again that 36% of Nvidia’s revenue now comes from two large clients.
2. These clients, not explicitly disclosed, are likely among those leveraging their balance sheets to make these purchases, a point investors are growingly dislike.

So, while Nvidia delivered another blockbuster quarter, it doesn’t fully revive global risk appetite. SoftBank rebounded almost 4% in Japan this morning, but Nasdaq futures are pointing lower, trailing major US and European peers. Nvidia can keep its own head above water, but it may not drive global risk appetite alone, anymore.

In other earnings, Salesforce — closely watched amid the SaaS-pocalyptic environment — slipped 4.5% in after-hours trade despite beating analyst expectations on both revenue and EPS. Investors focused on Salesforce’s fiscal 2027 guidance, which came in just below consensus and signaled only mid-single-digit revenue growth. Many traders interpreted this as a sign that near-term growth remains tepid amid broader concerns about slowing enterprise tech spending and AI competition.

The latter may not improve appetite in software stocks.

But this could: Anthropic Claude, originally a major driver of SaaS fears, reported a hack exposing sensitive Mexican government data. This incident could at least provide support for cybersecurity stocks.

Overall, analysts worldwide have pushed back against Citrini’s earlier report predicting that AI would destroy jobs, companies and economies. Many — including myself — criticize the report as overly dramatic, bordering on science fiction.

What is less speculative, however, is the rise in private credit default risks. UBS this week increased private credit default risk warnings from 13% to 15%, noting that aggressive AI disruption could stress corporate borrowers. JPMorgan’s CEO drew parallels with the subprime crisis.
In short, AI fears may be overdone, but market reactions could temporarily amplify risks to financial assets, which is never good news.

Zooming out, the S&P 500 is set for a softer open despite gains in Asian tech indices. With waning US tech appetite, the rotation trade may need to do the heavy lifting to keep the S&P 500 positive.

This rotation trade now has a new acronym: HALO — Heavy Assets, Low Obsolescence. It suggests that companies with large physical assets are likely to attract capital flows as they are less vulnerable to rapid technological disruption, unlike many high-growth software/AI names. Investors are rotating from expensive AI and growth stocks into businesses with tangible infrastructure and long-lived assets — energy, materials, industrials, shipping, and other “real world” enterprises.

In this context, the FTSE 100 is well positioned to benefit from HALO inflows, rallying from record to record, driven by energy and mining names. Interestingly, yesterday’s inflows were strong enough to offset sterling’s strength.

In FX, the US Dollar remains under selling pressure against most majors. The EUR/USD extends gains above the 50-DMA, supported by softer-than-expected euro-area inflation, which reinforces expectations that the European Central Bank (ECB) could support European economies amid renewed external stress — yes, I’m looking at you, tariff uncertainty. The USD/JPY retraced yesterday’s advance, but yen bears remain confident given the government’s preference for a softer Bank of Japan (BoJ) policy over normalization.

In metals, Gold consolidates near $5’200, while US crude is marginally down, with tactical bulls waiting in ambush. Rising US-Iran tensions could push crude above $68pb toward $70pb, whereas easing tensions should bring it below the 200-DMA near $62.85pb.

Absent major data or events, today should focus on digesting Nvidia results and software commentary to gauge the next steps: Are the latest market risks regarding technology waning, are investors ready to jump back in, or has the valuation pullback been too soft to make technology interesting for dip buyers? I would bet on the latter.

In focus today

In Sweden, the February NIER Economic Tendency Survey will be released (at 9.00 CET). In January, it was nearly unchanged, with strong firm readings offset by weaker consumer confidence. For inflation, the survey's price plans will provide insight into import price trends amid a stronger SEK.

We will closely monitor developments in the US-Iran talks in Geneva.

Economic and market news

What happened overnight

In Japan, BoJ Governor Ueda signalled the possibility of rate hikes as early as March or April. Japan's government also nominated two academics seen as advocates of economic stimulus to the BoJ board, reflecting PM Takaichi's dovish policy stance. The yen traded near a two-week low yesterday, with USD/JPY trading around the 156-mark.

What happened yesterday

In the US, Trade Representative Greer outlined next step for tariffs, including Section 301, which allow tariff rates - also higher than 15% - to be imposed if investigations find foreign countries apply discriminatory policies against US commerce. Greer cited unresolved capacity issues in China as a reason for maintaining tariffs on China, Vietnam and others.

In the euro area, the final January inflation confirmed the flash print of headline at 1.7% y/y and core at 2.2% y/y, with a slight lowering of the estimates on the second decimal. Services inflation was weaker than in flash, but a less dovish impression emerges when adjusted for constant tax rates. Germany's VAT reduction on restaurants and other one-off factors thus contributed to lower services inflation, yet momentum remains consistent with recent months, reflecting decent underlying price pressure.

In Germany, the final Q4 2025 GDP release showed strong details of the 0.3% q/q expansion, driven by domestic demand. Private consumption rose as households spent more, lowering the savings rate to 9.4% from 10.4%, and worked more hours. Government consumption and construction investments also supported growth. The rebound this year looks promising, with expected real income gains and rising public investments.

In Norway, wage growth slowed to 3.1% y/y in January, as expected. This was mainly due to base effects that will partly reverse in February. However, the underlying trend seems to be declining, which should be good news for the inflation outlook. The trend adjusted LFS-unemployment came in unchanged at 4.5% in January, yet the more accurate NAV-unemployment is falling, signaling a tighter labour market.

In Sweden, the Producer Price Index increased by 2.4% m/m but fell -2.0% y/y in January. Import prices continue to decline due to last year's SEK appreciation. The pass-through to inflation remains limited. The monthly increase was driven mainly by electricity and water distribution, food products, and metals.

In oil space, the eight OPEC+ members are reportedly set to discuss a 137k bpd output hike for April at the 1 March meeting. This would mark a return to production hikes after a three-month pause. Saudi Arabia has activated a plan for short-term oil output and export surges, should a US strike on Iran disrupt Middle Eastern oil flows. Brent Crude is currently trading above the USD 70/bbl mark, as markets await the US-Iran nuclear talks today.

Equities: Global equities had another good day yesterday, rising 0.8%. S&P500 was up 0.8%, with Nasdaq 1.3% and Russell 2000 up 0.4%. Stoxx 600 rose 0.7%. The rally yesterday can either be seen through the 2026-laggard recovering or through the 'AI wave' lens with IT, financials and communication services in the driver seat, ahead of Nvidia's earnings report last night. After spiking well above 20 on Monday, the VIX gradually declined yesterday to just below 18 now. Asian equities are mostly in green overnight with Nikkei and Kospi setting new record highs, amid US futures being down.

Nvidia's earnings report came as the last of the big companies. While Nvidia in itself is not a forward-looking metric for the AI adoption, the solid beat on sales projection of 7bn to 78bn for Q1 shows the continued demand for chips. Also, the earnings beat per share of 9 cents to USD 1.62 shows the strong demand for their product. After an initial spike of 1.5% upon earnings release in the aftermarket, likely driven by the sales, the stock ended broadly unchanged in the aftermarket.

FI and FX: Yesterday's session concluded another day with an overall positive risk sentiment. Whereas credit spreads continued to tighten, movements in foreign exchange and fixed income markets can overall be described as small. EUR/USD lifted marginally and trades now at 1.182, and EUR/SEK as well as NOK/SEK closed the session almost unchanged, despite some intraday volatility. US treasury rates lifted by a couple of basis points, but the impact of the slightly softer than usual demand in the 5y auction did not result in any large reaction.

Daily Pivots: (S1) 0.7078; (P) 0.7102; (R1) 0.7148; More...

AUD/USD is still bounded in range below 0.7146 and intraday bias stays neutral at this point. Consolidations could continue and deeper retreat cannot be ruled out. But downside should be contained above 0.6896 support. On the upside, above 0.7146 will resume larger up trend to 100% projection of 0.5913 to 0.6706 from 0.6420 at 0.7213.

In the bigger picture, current development argues that rise from 0.5913 (2024 low) is reversing whole down trend from 0.8006 (2021 high). Further rally should be seen to 61.8% retracement of 0.8006 to 0.5913 at 0.7206. This will remain the favored case as long as 0.6706 resistance turned support holds, even in case of deep pullback.

Daily Pivots: (S1) 1.3663; (P) 1.3685; (R1) 1.3698; More...

Intraday bias in USD/CAD remains neutral at this point. Consolidations from 1.3480 is in progress and stronger rebound might be seen. But upside should be limited by 55 D EMA (now at 1.3730) to complete the pattern. On the downside, below 1.3630 minor support will bring retest of 1.3480 low. Firm break there will resume larger down trend from 1.4791 to 61.8% projection of 1.4791 to 1.3538 from 1.4139 at 1.3365. However, sustained break of 55 D EMA will bring further rise to 1.3927 resistance and above.

In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen as the pattern extends, to 61.8% retracement of 1.2005 to 1.4791 at 1.3069. For now, medium term outlook will be neutral at best, until there are signs that the correction has completed, or that a bearish trend reversal is confirmed.