City of London Feeling the Brexit Effect Not a day goes by without Brexit being mentioned and we can expect more of this to continue for some time, even after Britain leaves the European Union next year. With the International Monetary Fund (IMF) cutting its economic growth forecast for Britain for the coming years, are we also starting to see the impact of it on the City of London – the biggest financial centre in the world? Morgan McKinley has shown that the number of jobs available in December 2017 fell by around 52% month-to-month, a much bigger decline compared to the 30% drop seen over the same periods in 2015 and 2016. “In December, the city is abuzz with holiday parties, not hiring, so a drop is to be expected, but for it to be such a seismic drop is alarming” said Hakan Enver, the operations director for financial services for Morgan McKinley.
Year-on-year we have seen 37% fall in vacancies which is a completely different picture to when we look at figures in 2015 and 2016 when we saw a 16% increase in job openings. A recent survey by account firm Binder Dijker Otte (BDO) has shown that the United Kingdom has dropped out of the ranking for top six countries for potential migrants from the European Union. Paul Eagland, managing partner at BDO said the government must act to secure the UK’s access to talent: “UK businesses are already struggling with a skills shortage.
The impact of the EU referendum and uncertainty around a new trade deal is likely to make this worse.” “It’s absolutely imperative that the Government makes it clear to the world that the UK is still a great place to do business and that we continue to attract the world’s brightest and best to our country”. UK’s former immigration minister, Brandon Lewis, said that the issue of skilled worker visas was up by 38% but that is unlikely to make up the difference. Mr Enver said: “On the one hand, it’s great that the UK is still being considered an attractive destination from countries outside of the EU.” “However, on the other hand, there are signs that European employees are becoming less captivated by the draw of working in this country.” “2017 was the year we were told we’d have an exit strategy and a transition plan.
We have neither. “As new rounds of talks kick off, let’s hope 2018 brings the much-needed clarity and stability everyone’s waiting for.” A challenging time for the financial sector in Britain.
By
GO Markets
Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice.
Asia starts the week with a fresh geopolitical shock that is already being framed in oil terms, not just security terms. The first-order move may be a repricing of risk premia and volatility across energy and macro, while markets wait to see whether this becomes a durable physical disruption or a fast-fading headline premium.
At a glance
What happened: US officials said the US carried out “Operation Absolute Resolve”, including strikes around Caracas, and that Venezuela’s President Nicolás Maduro and his wife were taken into US custody and flown to the United States (subject to ongoing verification against the cited reporting).
What markets may focus on now: Headline-driven risk premia and volatility, especially in products and heavy-crude-sensitive spreads, rather than a clean “missing barrels” shock.
What is not happening yet: Early pricing has so far looked more like a headline risk premium than a confirmed physical supply shock, though this can change quickly, with analysts pointing to ample global supply as a possible cap on sustained upside.
Next 24 to 72 hours: Market participants are likely to focus on the shape of the oil “quarantine”, the UN track, and whether this stays “one and done” or becomes open-ended.
Australia and Asia hook: AUD as a risk barometer, Asia refinery margins in diesel and heavy, and shipping and insurance where the price can show up in friction before it shows up in benchmarks.
What happened, facts fast
Before anyone had time to workshop the talking points, there were strikes, there was a raid, and there was a custody transfer. US officials say the operation culminated in Maduro and his wife being flown to the United States, where court proceedings are expected.
Then came the line that turned a foreign policy story into a markets story. President Trump publicly suggested the US would “run” Venezuela for now, explicitly tying the mission to oil.
Almost immediately after that came a message-discipline correction. Secretary of State Marco Rubio said the US would not govern Venezuela day to day, but would press for changes through an oil “quarantine” or blockade.
That tension, between maximalist presidential rhetoric and a more bureaucratically describable “quarantine”, is where the uncertainty lives. Uncertainty is what gets priced first.
Source: Adobe images
Why this is price relevant now
What’s new versus known for positioning
What’s new, and price relevant, is that the scale and outcome are not incremental. A major military operation, a claimed removal of Venezuela’s leadership from the country, and a US-led custody transfer are not the sort of things markets can safely treat as noise.
Second, the oil framing is explicit. Even if you assume the language gets sanded down later, the stated lever is petroleum. Flows, enforcement, and pressure via exports.
Third, the embargo is not just a talking point anymore. Reporting says PDVSA has begun asking some joint ventures to cut output because exports have been halted and storage is tightening, with heavy-crude and diluent constraints featuring prominently.
What’s still unknown, and where volatility comes from
Key unknowns include how strict enforcement is on water, what exemptions look like in practice, how stable the on-the-ground situation is, and which countries recognise what comes next. Those are not philosophical questions. Those are the inputs for whether this is a temporary risk premium or a durable regime shift.
Political and legal reaction, why this drives tail risk
The fastest way to understand the tail here is to watch who calls this illegal, and who calls it effective, then ask what those camps can actually do.
Internationally, reaction has been fast, with emphasis on international law and the UN Charter from key partners, and UN processes in view. In the US, lawmakers and commentators have begun debating the legal basis, including questions of authority and war powers. That matters for markets because it helps define whether this is a finite operation with an aftershock, or the opening chapter of a rolling policy regime that keeps generating headlines.
Market mechanism, the core “so what”
Here’s the key thing about oil shocks. Sometimes the headline is the shock. Sometimes the plumbing is the shock.
Venezuela’s heavy-crude system: Orinoco production, key pipelines, and export/refining bottlenecks.
Volumes and cushion
Venezuela is not the world’s swing producer. Its production is meaningful at the margin, but not enough by itself to imply “the world runs out of oil tomorrow”. The risk is not just volume. It is duration, disruption, and friction.
The market’s mental brake is spare capacity and the broader supply backdrop. Reporting over the weekend pointed to ample global supply as a likely cap on sustained gains, even as prices respond to risk.
Quality and transmission
Venezuela’s barrels are disproportionately extra heavy, and extra heavy crude is not just “oil”. It is oil that often needs diluent or condensate to move and process. That is exactly the kind of constraint that shows up as grade-specific tightness and product effects.
Reporting has highlighted diluent constraints and storage pressure as exports stall. Translation: even if Brent stays relatively civil, watch cracks, diesel and distillates, and any signals that “heavy substitution” is getting expensive.
Heavy-light spread as a stress gauge: rising differentials can signal costly substitution and tighter heavy supply.
Products transmission, volatility first, pump later
If crude is the headline, products are the receipt, because products tell you what refiners can actually do with the crude they can actually get. The short-run pattern is usually: futures reprice risk fast, implied volatility pops; physical flows adapt more slowly; retail follows with a lag, and often with less drama than the first weekend of commentary promised.
For Australia and Asia desks, the bigger point is transmission. Energy moves can influence inflation expectations, which can feed into rates pricing and the dollar, and in turn affect Asia FX and broader risk, though the links are not mechanical and can vary by regime.
Some market participants also monitor refined-product benchmarks, including gasoline contracts such as reformulated gasoline blendstock, as part of that chain rather than as a stand-alone signal.
Historical context, the two patterns that matter
Two patterns matter more than any single episode.
Pattern A: scare premium. Big headline, limited lasting outage. A spike, then a fade as the market decides the plumbing still works.
Pattern B: structural. Real barrels are lost or restrictions lock in; the forward curve reprices; the premium migrates from front-month drama to whole-curve reality.
One commonly observed pattern is that when it is only premium, volatility tends to spike more than price. When it is structural, levels and time spreads move more durably.
The three possible market reactions
Contained, rhetorical: quarantine exists but porous; diplomacy churns; no second-wave actions. Premium bleeds out; volatility mean-reverts.
Escalation, prolonged control risk: “not governing” language loses credibility; repeated operations; allies fracture further. Longer-duration premium; broader risk-off impulse across FX and rates.
Australia and Asia angle
For Sydney, Singapore, and Hong Kong screens, this is less about Venezuelan retail politics and more about how a Western Hemisphere intervention bleeds into Asia pricing.
AUD is the quick and dirty risk proxy. Asia refiners care about the kind of oil and the friction cost. Heavy crude plus diluent dependency makes substitution non-trivial. If enforcement looks aggressive, the “price” can show up in freight, insurance, and spreads before it shows up in headline Brent.
Catalyst calendar, key developments markets may monitor
US policy detail: quarantine rules, enforcement posture, exemptions.
UN and allies: statements that signal whether this becomes a long legitimacy fight.
The United States entered a government shutdown on October 1, 2025, after Congress failed to agree on full-year appropriations or a short-term funding bill. Although shutdowns have occurred before, the timing, speed, scale, and motives behind this one make it unique. This is the first shutdown since the last Trump term in 2018–19, which lasted 35 days, the longest in history.For traders, understanding both the mechanics and the ripple effects is essential to anticipating how markets may respond, particularly if the shutdown draws out to multiple weeks as currently anticipated.
What Is a Government Shutdown?
A government shutdown occurs when Congress fails to pass appropriation bills or a temporary extension to fund government operations for the new fiscal year beginning October 1.Without the legal authority to spend, federal agencies must suspend “non-essential” operations, while “essential” services such as national security, air traffic control, and public safety continue, often with employees working unpaid until funding is restored.Since the Government Employee Fair Treatment Act of 2019, federal employees are guaranteed back pay to cover lost wages once the shutdown ends, although there has been some narrative from the current administration that some may not be returning to work at all.
Why Did the Government Shutdown Happen?
The 2025 impasse stems from partisan disputes over spending levels, health-insurance subsidies, and proposed rescissions of foreign aid and other programs. The reported result is that around 900,000 federal workers are furloughed, and another 700,000 are currently working without pay.Unlike many past standoffs, there was no stopgap agreement to keep the government open while negotiations continued, making this shutdown more disruptive and unusually early.
Why an Early Shutdown?
Historically, most shutdowns don’t occur immediately on October 1. Lawmakers typically kick the can down the road with a “Continuing Resolution (CR)”. This is a stopgap measure that can extend existing funding for weeks or months to allow time for an agreement later in the quarter.The speed of the breakdown in 2025, with no CR in place, is unusual compared to past shutdowns. It suggests it was not simply budgetary drift, but a potentially deliberate refusal to extend funding.
Alternative Theories Behind the Early Shutdown
While the main narrative coming from the U.S. administrators points to budget deadlock, several other theories are being discussed across the media:
Executive Leverage – The White House may be using the shutdown as a tool to increase bargaining power and force structural policy changes. Health care is central to the debate, funding for which was impacted significantly by the “one big, beautiful bill” recently passed through Congress.
Hardline Congressional Factions – Small but influential groups within Congress, particularly on the right, may be driving the shutdown to demand deeper cuts.
Political Messaging – The blame game is rife, despite the reality that Republican control of the presidency, House, and Senate, as well as both sides, is indulging in the usual political barbs aimed at the other side. As for the voter impact, Recent polls show that voters are placing more blame on Republicans than Democrats at this point, though significant numbers of Americans suggest both parties are responsible
Debt Ceiling Positioning – Creating a fiscal crisis early could shape the terms of future negotiations on borrowing limits.
Electoral Calculus – With midterms ahead, both sides may be positioning to frame the narrative for voters.
Systemic Dysfunction – A structural view is that shutdowns have become a recurring feature of hyper-partisan U.S. politics, rather than exceptions.
Short-Term Impact of Government Shutdown
AreaImpactFederal workforceHundreds of thousands have been furloughed with reduced services across various agencies.Travel & aviationFAA expects to furlough 11,000 staff. Inspections and certifications may stall. Safety concerns may become more acute if prolonged shutdown.Economic outputThe White House estimates a $15 billion GDP loss per week of shutdown (source: internal document obtained by “Politico”.Consumer spendingFederal workers and contractors face delayed income, pressuring local economies. Economic data releaseKey data releases may be delayed, impacting the decision process at the Fed meeting later this month.Credit outlookScope Ratings and others warn that the shutdown is “negative for credit” and could weigh on U.S. borrowing costs.Projects & researchInfrastructure, grants, and scientific initiatives are delayed or paused.
Medium- to Long-Term Impact of Government Shutdown
1. Market Sentiment
Shutdowns show some degree of U.S. political dysfunction. They can weigh on confidence and subsequently equity market and risk asset sentiment. To date, markets are shrugging off a prolonged impact, but a continued shutdown into later next week could start to impact.Equity markets have remained strong, and there has been no evidence of the frequent seasonal pullback we often see around this time of year.Markets have proved resilient to date, but one wonders whether this could be a catalyst for some significant selling to come.
2. Borrowing Costs
Ratings downgrades could lift Treasury yields and increase debt-servicing costs. The Federal Reserve is already balancing sticky inflation and potential downward pressure on growth. This could make rate decisions more difficult.
3. The Impact on the USD
Rises in treasury yields would generally support the USD. However, rising concerns about fiscal stability created by a prolonged shutdown may put further downward pressure on the USD. Consequently, it is likely to result in buying into gold as a safe haven. With gold already testing record highs repeatedly over the last weeks, this could support further moves to the upside.
4. Credibility Erosion
Repeated shutdowns weaken the U.S.’s reputation as the world’s most reliable borrower. With some evidence that tariffs are already impacting trade and investment into the US, a prolonged shutdown could exacerbate this further.
What Traders Should Watch
For those who trade financial markets, shutdowns matter more for what they could signal both in the short and medium term. Here are some of the key asset classes to watch:
Equities: Likely to see volatility as political risk rises, and the potential for “money off the table” after significant gains year-to-date for equities.
U.S. Dollar: With the US dollar already relatively weak, further vulnerability if a shutdown feeds global doubts about U.S. fiscal stability.
Gold and other commodities: May continue to gain as hedges against political and credit risk. Oil is already threatening support levels; any prolonged shutdown may add to the bearish narrative, along with other economic slowdown concerns
Outside the US: With the US such a big player in global GDP, we may see revisions in forward-looking estimates, slingshot impacts on other global markets and even supply chain disruptions with impact on customs services (potentially inflationary).
Final Word
The 2025 shutdown is unusual because of its scale and because it started on Day 1 of the fiscal year, without even a temporary extension. That speed points to a deeper strategic and political contribution beyond the usual budget wrangling that we see periodically.For traders, the lesson is clear: shutdowns are not just what happens in Washington, but may impact confidence, borrowing costs, and market sentiment across a range of asset classes. In today’s world, where political credibility is a form of capital, shutdowns have the potential to erode the very foundation of the U.S.’s role in global finance and trade relationships.
The US has entered the Israel-Iran war. However, despite an initial 4 per cent surge on the open, oil has settled where it has been since the conflict began in early June — around US$72 to US$75 a barrel.Trump claims the attacks from the US on Iranian nuclear facilities over the weekend are a very short, very tactical, one-off. This is something his base can get behind — some really big conservative players do not want a long-contracted war that sucks the US into external disputes.Whether this will be the case or not is up for debate, but there is a precedent from Trump's first presidency that we can look to. Iran had attacked several American bases in 2019, as well as attacking Saudi Arabia's most important oil refinery with Iranian drones. There wasn't a huge amount of damage; it was more a symbolic movement and display of capabilities by Iran.Initially, Trump didn't react — it took pressure from Gulf allies like the UAE and Israel for him to respond, which saw him order the assassination of the head of the Iranian Defence Force, Qasem Soleimani. This led to an Iranian response of ‘lots of noise’ and ‘cage rattling’, but minimal real action events, just a few drone attacks. Trump is betting on the same reaction now.If Iran follows the same patterns from the previous engagement, the geopolitical side of this is already at its peak.As of now, Iran is not going after or destroying major Gulf energy capabilities. Nor have there been any disruptions to the shipping traffic through the Strait of Hormuz. In fact, apart from a posturing vote to block the Strait, Iran has not made any indication that it is going to disrupt oil in any way that would lead to price surges.Additionally, despite the U.S. military equipment buildup in the region being its highest since the Iraq war, critical Iranian energy infrastructure is running largely unscathed.This all suggests that the geopolitics and the physical and futures oil markets remain disconnected. Oil will spike on news rumours, but the actual impacts in the physical realm to this point remain low. Of course, this could change in future. But, for now, the risk of seeing oil move to US$100 a barrel is still a minority case rather than the majority.
Big global events like the Olympics can pull attention away from markets, shift participation, and thin out volume in pockets.
When that happens, liquidity can appear lighter, spreads can be less consistent, and short-term price action can become noisier, even if broader index-level volatility does not change materially.
So instead of asking “Do the Olympics create volatility?”, a more practical lens is to ask “What volatility events could show up during the Games?”
Quick facts
Evidence is generally weak that the Olympics themselves are a consistent, direct driver of market volatility.
Volatility spikes that occur during Olympic windows have often coincided with bigger forces already in motion, including macro stress, policy surprises, and geopolitics.
The more repeatable Olympics-linked impact tends to be around execution conditions, not a new fundamental market regime.
Olympic “volatility bingo”, how it works
Think of it as a checklist of common volatility triggers that can land while the world is watching.
Some “volatility bingo” squares are timeless, like central banks and geopolitics. Others are more modern, such as cyber disruption risk, climate activism, and social flashpoints surrounding host-city logistics.
When policy expectations shift, markets can move regardless of the calendar.
London 2012 is a reminder that the story was not sport. It was the Eurozone. In late July 2012, ECB President Mario Draghi delivered his “whatever it takes” remarks in London, at a time when sovereign stress was a dominant volatility theme.
Macro stress already underway
Beijing 2008 took place in a year defined by the global financial crisis, with volatility tied to credit stress and repricing risk appetite, not to the event itself. The Games ran from 8 August 2008 to 24 August 2008.
S&P500 dropped almost 50% over 6 months in 2008 | TradingView
Geopolitics and security
Regional conflict timing
During Beijing 2008, the Russia-Georgia conflict escalated in early August 2008, overlapping with the Olympic period. The market lesson is that geopolitical repricing does not pause for major broadcasts.
“After the closing ceremony” risk
Beijing 2022 ended on 20 February 2022. Russia’s full-scale invasion of Ukraine began on 24 February 2022, only days later.
This is a classic “bingo square” because it reinforces the same principle. A geopolitical escalation can land near a global event window without necessarily being caused by it.
Security incident headline shock
The Olympics have also been directly impacted by security events, even if those events are not “market drivers” on their own.
Two historic examples that shaped the broader security backdrop around major events are:
The Munich massacre during the 1972 Summer Games.
The 1996 Atlanta Olympics bombing in Centennial Olympic Park.
Security measures for Paris 2024 included AI-powered cameras | Adobe Stock
Modern host-city climate
Environmental and anti-Olympics protests
Host city activism is not new, but the themes have become more climate and infrastructure-focused.
Paris 2024 saw organised protests and “counter-opening” events. Reporting around Paris also referenced environmental protest attempts by climate groups.
The current 2026 Winter Olympics opened amid anti-Olympics protests in Milan, with reporting that included alleged railway sabotage and demonstrations focused in part on the environmental impacts of Olympic infrastructure.
These types of headlines can matter for markets indirectly, through risk sentiment, transport disruption, policy response, and broader “instability” framing.
Cyber disruption risk
The cyber “bingo square” has become more prominent in modern Games.
France’s national cybersecurity agency ANSSI reported 548 cybersecurity events affecting Olympics-related entities that were reported to ANSSI between 8 May 2024 and 8 September 2024.
Even when events are contained, cyber incidents can still add noise to headlines and confidence.
Logistics and “can the event run” controversy
Sometimes the volatility link is not the Games, but the controversy around delivery.
Paris 2024 had high-profile scrutiny around the Seine and event readiness, alongside significant public spending to clean the river and ongoing debate about water quality risks.
Health and disruption narratives
Public health concerns
Rio 2016 is a reminder that health risk narratives can become part of the Olympic backdrop, even when the market impact is indirect.
Zika concerns were widely discussed ahead of the Games, including debate about global transmission risk and travel-related spread.
The “postponement era” memory
Tokyo 2020 was postponed to 2021 due to COVID-19, which underlined that global shock events can dominate everything else, including major sporting calendars.
Tokyo 2020 “COVID” Olympics | Adobe Stock
Practical takeaways for traders
The most repeatable Olympics-era shift is often not “more volatility”, but different execution conditions.
During major global events, some traders choose to watch spreads and depth for signs of thinning liquidity, trade less when conditions look choppy, and stay aware that geopolitical, cyber, and protest headlines can hit at any time.
In global markets of enormous scale, sport is usually not the catalyst. The bingo squares are.
The Olympic and Winter Olympic Games capture global attention for weeks, drawing millions of viewers and dominating headlines. For traders, this attention often feels like a catalyst, yet the real market drivers remain the same: macroeconomics, policy, and global risk sentiment, not the sporting calendar.
So why do some traders say results feel weaker during major sporting events?
Often it comes down to a failure to adapt to conditions that can shift at the margin, particularly liquidity and participation.
1. Expecting “event volatility”
A major global event can create an assumption that markets should move more. Some traders position for breakouts or increase risk in anticipation of bigger swings, even when conditions don’t support it.
Key drivers
In some markets and sessions, reduced participation can weaken trend follow-through
Sentiment can inflate expectations beyond what price action delivers
Example: A trader expects a breakout during the Olympic opening ceremony period, but low regional participation limits price movement, leading to false starts.
2. Forcing trades in quiet sessions
When price action is slower and ranges compress, some traders feel pressure to stay active and take lower-quality entries.
Key drivers
Narrow intraday ranges can increase false signals
Lower conviction can favour consolidation over trend, raising false-break risk
“Staying engaged” can reduce selectivity
Takeaway: Use quieter sessions to refine setups or review data rather than forcing marginal trades.
3. Ignoring thinner liquidity
Participation can ease slightly during major global events, and the impact is often more pronounced on shorter timeframes. Daily charts may look normal, while intraday price action becomes choppier with more wicks.
Key drivers
In lower-depth conditions, price can jump more easily, and wick size can increase
In some instruments and sessions, thinner liquidity can coincide with wider spreads and more variable execution (varies by market, venue and broker conditions)
Timeframe sensitivity to thinner conditions
The above table is illustrative only (varies by market): Daily charts may look normal. Five-minute charts can feel more erratic.
Low volume big wicks example
Source: MT5
4. Using normal size in abnormal conditions
Even if overall volatility looks stable, execution risk can rise when liquidity thins, especially for short-term or scalping-style approaches.
Key drivers
Slippage can increase, and stops may “overshoot”
Thin conditions can trigger stops more easily in noise
Wider spreads can shift entry/exit outcomes versus normal conditions
Adjustment: Maintaining fixed sizing may distort effective risk. Some traders review transaction costs, including spreads, and execution conditions when setting risk parameters such as stops/limits, particularly in thinner sessions.
5. Trading breakouts with low follow-through
Trend-following tactics can falter when participation declines. Momentum may dissipate quickly, and false breaks become more common.
Key drivers
Reduced flow can limit sustained directional moves
Some low-liquidity regimes may favour mean reversion over momentum
Example: A classic range breakout appears valid intraday but fades rapidly as follow-through volume fails to materialise.
Failed breakout example
Source: MT5
6. Overlooking timing and distraction risk
There is no reliable evidence that the Olympic calendar predictably drives geopolitical events. But when tensions are already elevated, major global events can sometimes coincide with attention being spread elsewhere, somewhat similar to holidays, elections or major summits.
Traders should identify when conditions are slower or thinner and adjust accordingly, aligning tactics with reduced follow-through risk and calibrating position sizes to execution reality. Most importantly, avoid forcing trades when edge is limited during these periods.
The torch is lit in Milan, and public attention has moved from the opening-ceremony theatrics to the competition on the slopes.
But for forex (FX) traders, eyes are still on the euro (EUR) charts. With Italy at the centre of the sporting world, the eurozone economy is facing one of its most-watched moments of the year.
1. The home court advantage (Italy’s economy)
Some estimates suggest the Olympics could deliver roughly a €5.3 billion boost to the Italian economy, driven by direct spending and a longer tourism tail once the flame goes out. In practical terms, that can mean a front-loaded “direct expenditure” phase. Hospitality, retail and transport demand can peak as an estimated 2.5 million spectators move between Milan and the Dolomites.
Checklist task: Watch Italy industrial production (Wednesday, 11 February 2026). While the Games may support services activity, it’s worth tracking whether broader production data is keeping pace or if the Olympic impact is narrowly concentrated in tourism‑linked sectors.
At its 5 February meeting, the European Central Bank (ECB) held policy settings steady at 2.15% and the deposit facility at 2.00%. President Christine Lagarde signalled that while inflation appears to be stabilising, the ECB remains in “wait and see” mode.
Checklist task: Monitor speeches from ECB members this week. Any shift in tone, including a more hawkish tilt that suggests rates may stay higher for longer, could act as a potential tailwind for EUR/USD, especially if it contrasts with a more cautious Federal Reserve tone.
The most prestigious Olympic finals often land in the European evening. For traders, this lines up with the London to New York session overlap (typically 14:00 to 17:00 GMT). That’s when liquidity is deepest in EUR crosses and when positioning can whipsaw around data and headlines.
Checklist task: Expect possible peak liquidity and the potential for “false breakouts” during these hours. If a major US data point (such as Tuesday’s retail sales, or Friday’s CPI) lands while European markets are still open, EUR pairs may see a volatility pickup.
While the euro is the star of the show, the Olympics can still be shadowed by broader geopolitical noise. For example, gold is already trading around the US$5,000 mark after briefly breaking above it in early February, driven by central‑bank buying, expectations of a weaker dollar, and upgraded year‑end forecasts.
Checklist task: If sentiment turns risk-off, watch traditional haven assets such as the Swiss franc (CHF) and gold. Gold has seen large swings recently and is currently testing resistance near US$5,000. EUR/CHF may also see higher volatility if geopolitical headlines intensify during the Games.
The week wraps with the eurozone’s Q4 GDP (second estimate) on Friday, 13 February 2026.
Checklist task: The preliminary estimate showed 0.3% growth. If the figure is revised upward, it may reinforce the eurozone’s resilience and could support a late-week bid in EUR.
While the “Olympic boost” may offer a sentiment cushion for Italy, the euro’s direction is still likely to be shaped by whether the ECB’s “wait and see” stance is challenged by Friday’s GDP update or Wednesday’s industrial production release.
With gold hovering near US$5,000 and the US facing a calendar affected by rescheduled data, volatility could stay elevated into key overlap hours, right as prime-time events are taking place.
