Global markets move into the new week with a number of potentially high-impact catalysts. Japan’s general election lands first on Sunday, followed by US inflation and labour market data that continue to shape interest-rate expectations. 

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• Japan election: Policy continuity and political stability are generally viewed as supportive for regional markets.
• US inflation and labour market: The consumer price index (CPI) and the Employment Situation report (nonfarm payrolls, NFP) are the immediate macro focal points for the week. 
• Bitcoin risk gauge: Bitcoin is back near levels last seen in late 2024 and remains well below its October 2025 peak.
• Sector rotation watch: Technology has recently underperformed while value and defensive segments have stabilised, with earnings season continuing to influence flows. 

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Japan election

The general election in Japan is primarily viewed through the lens of policy certainty. Markets typically favour a clear outcome and continuity in fiscal and monetary settings. 

Unexpected results or coalition uncertainty may increase short-term volatility in the JPY and regional indices at the start of the week.

Key dates

• General election (Japan): Sunday, 8 February
• Results through Asian trade on Monday

Market impact

• JPY may be sensitive to results uncertainty or potential changes in policy direction
• Asia equities may see early-week volatility until results are clear

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US inflation and labour market

Inflation remains the most direct input into interest-rate expectations, while the monthly NFP report provides a broad read on employment conditions and wage pressures. 

Treasury yields and the USD often react quickly to these releases, with knock-on effects across equities, gold and growth assets. 

Current pricing indicates markets assign less than a 30% probability of a cut by the April meeting, with June meeting hike probabilities above 50%.

Key dates

• Employment Situation: Wednesday, 11 February 08:30 (ET) | Thursday, 12 February 00:30 (AEDT) 
• CPI (January 2026): Friday, 13 February 08:30 (ET) Saturday, 14 February 00:30 (AEDT) 

Market impact

• Yields often move first, followed by USD and then risk assets
• Expectations for rate-cut timing may adjust quickly
• Growth and technology shares remain more rate-sensitive

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Bitcoin

Bitcoin has declined to levels last seen prior to the US elections in November 2024 and is close to 50% below its October 2025 peak. 

While not a traditional macro indicator, crypto markets could be viewed as a real-time read on investor risk tolerance. Sustained weakness can coincide with more cautious positioning across higher-beta assets, including technology shares.

Market impact

• Softer crypto sentiment may coincide with reduced speculative flows
• Risk appetite may remain more selective
  
  

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Sector rotation

Over the past week, the Dow Jones Industrial Average has outperformed, trading just below neutral, while the Nasdaq-100 has declined more than 4%, reflecting sensitivity in large-cap technology to firmer yields. 

What the move may reflect

• Rate-driven pressure on growth stocks
• Profit-taking after strong tech performance
• Earnings season favouring broader sector participation
• A generally more cautious tone across higher-beta assets

Markets typically look for sustained multi-week outperformance in financials, industrials or defensives before characterising the shift as structural rotation.

Market impact

• Tech remains more sensitive to yield moves
• Value and defensive sectors may see relative support
• Earnings guidance continues to influence leadership

February’s FX landscape is likely to be driven by inflation persistence, labour resilience, and central bank communications. With several high-impact data releases across the US, Europe, Japan and Australia, near-term moves may be more event-driven and repricing-led, rather than trend-led. 

Quick facts

• USD remains the key reference point, with US data driving repricing in yields and the broader FX market.
• EUR sensitivity remains high around European Central Bank (ECB) messaging and incoming inflation and activity signals.
• JPY remains tightly linked to domestic data and Bank of Japan (BOJ) communication, with USD/JPY often reacting sharply to shifts in yield expectations.
• AUD remains policy sensitive, with domestic inflation and labour data likely to matter most, alongside global risk tone and metals.

US dollar (USD)

Key events

• Nonfarm payrolls (NFP) and unemployment: 8:30 am, 11 February (ET) | 12:30 am, 12 February (AEDT)
• Consumer Price Index (CPI), headline and core: 8:30 am, 13 February (ET) | 12:30, 13 February (AEDT)
• Personal income and outlays (includes the PCE price index): 8:30, 20 February (ET) | 12:30, 21 February (AEDT)

What to watch

The USD is likely to remain primarily driven by shifts in inflation and labour data and their implications for Federal Reserve rate expectations. Recent headlines surrounding Federal Reserve independence have also added volatility to USD positioning. 

Stronger inflation or labour resilience is often associated with firmer USD support via higher yield expectations. Softer outcomes could reduce rate support and allow pairs like EUR/USD and AUD/USD to stabilise.

Key chart: US dollar index (DXY) weekly chart

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Euro (EUR)

Key events

• ECB policy decision: 12:15 am, 6 February (AEDT)
• ECB press conference: 12:45 am, 6 February (AEDT)
• ECB flash estimates for GDP and employment: 8:00 pm, 13 February (AEDT)

What to watch

EUR direction remains linked to whether the ECB can maintain its stance without a material deterioration in activity, or whether inflation and growth data pull forward easing expectations.

Resilient growth and firm inflation could support the “higher for longer” pricing bias. Weaker growth or softer inflation could weigh on the currency, particularly if they bring forward easing expectations.

Key chart: EUR/USD weekly chart

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Japanese yen (JPY)

Key events

• Japan preliminary GDP (Q4 2025, first preliminary): 6:50 pm, 15 February (ET) | 10:50 am, 16 February (AEDT)
• National CPI (Japan): 20 February (Japan) 

What to watch

JPY remains sensitive to domestic yield shifts and BOJ communication. Even modest adjustments to policy expectations could generate outsized moves in USD/JPY.

Firm growth or inflation outcomes could support JPY via higher domestic yields and shifting BOJ expectations. Softer outcomes or cautious policy messaging could keep USD/JPY supported.

Key chart: USD/JPY daily chart

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Australian dollar (AUD)

Key events

• RBA minutes: 11:30 am, 17 February (AEDT)
• Wage Price Index: 11:30 am, 18 February (AEDT)
• Labour Force Survey: 11:30 am, 19 February (AEDT)
• Consumer Price Index (CPI): 11:30 am, 25 February (AEDT)

What to watch

AUD remains sensitive to policy, responding quickly to domestic inflation and labour data, as well as global risk sentiment and its impact on metal pricing.

Persistent wages or inflation pressures could support AUD via firmer policy expectations. Softening data could reduce rate support and weigh on AUD performance, particularly versus USD and JPY.

Key chart: EUR/AUD daily chart

Three data levers dominate the US markets in February: growth, labour and inflation. Beyond those, policy communication, trade headlines and geopolitics can still matter, even when they are not tied to a scheduled release date.

Growth: business activity and trade

Early to mid-month indicators provide a read on whether US momentum is stabilising or softening into Q1.

Key dates

• Advance monthly retail sales: 10 Feb, 8:30 am (ET) / 11 Feb, 12:30 am (AEDT) 
• Industrial Production and Capacity Utilisation: 18 Feb, 9:15 am (ET) / 19 Feb, 1:15 am (AEDT) 
• International Trade in Goods and Services: 19 Feb, 8:30 am (ET) / 20 Feb, 12:30 am (AEDT) 

What markets look for

Markets will be watching new orders and output trends in PMIs to gauge underlying demand momentum. Export and import data will offer insights into global trade flows and domestic consumption patterns. Traders will also assess whether manufacturing and services sectors remain in expansionary territory or show signs of contraction.

Market sensitivities

• Stronger growth can be associated with higher yields and a firmer USD, though inflation and policy expectations often dominate the rate response.
• Softer activity can be associated with lower yields and improved risk appetite, depending on inflation, positioning, and broader risk conditions.

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Payrolls data

Labour conditions remain a direct input into rate expectations. The monthly NFP report, alongside the weekly jobless claims released every Thursday, is typically watched for signs of cooling or renewed tightness.

Key dates

• Employment Situation (nonfarm payrolls, unemployment, wages): 6 Feb, 8:30 am (ET) / 7 Feb, 12:30 am (AEDT) 

What markets look for

Markets will focus on headline payrolls to assess the pace of job creation, the unemployment rate for signals of labour market slack, and average hourly earnings as a gauge of wage pressures. A gradual cooling can support the idea that wage pressures are easing. Persistent tightness may push out expectations for policy easing.

Market sensitivities

Payroll surprises frequently move Treasury yields and the USD quickly, with knock-on effects for equities and commodities.

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Inflation: CPI, PPI and PCE

Inflation releases remain a key input into expectations for the Fed’s policy path.

Key dates

• Consumer Price Index (CPI): 11 Feb, 8:30 am (ET) / 12 Feb, 12:30 am (AEDT) 
• Personal Income and Outlays, including the PCE price index): 20 Feb, 8:30 am (ET) / 21 Feb, 12:30 am (AEDT) 
• Producer Price Index (PPI): 27 Feb, 8:30 am (ET) / 28 Feb, 12:30 am (AEDT) 

What markets look for

Producer prices can act as a pipeline signal. CPI and the PCE price index can help confirm whether inflation pressures are broadening or fading at the consumer level.

How rates and the USD can react

• Cooling inflation can support lower yields and a softer USD, though market reactions can vary.
• Sticky inflation can keep upward pressure on yields and financial conditions, especially if it shifts policy expectations.

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Other influencing factors

Policy and communication

There is no scheduled February FOMC meeting, but speeches and other Fed communication, as well as the minutes cycle from prior meetings, can still influence expectations around the policy path.  Without a decision event, markets often react to shifts in tone, or renewed emphasis on inflation persistence and labour conditions.

Trade and geopolitics

Trade flows and energy markets can remain secondary, and the risk profile is typically headline-driven rather than linked to scheduled releases.

The Office of the United States Trade Representative has published fact sheets and policy updates (including on US-India trade engagement) that may occasionally influence sector and supply-chain sentiment at the margin, depending on the substance and market focus at the time. 

Separately, volatility tied to Middle East developments and any impact on energy pricing can filter into inflation expectations and bond yields. Weekly petroleum market data from the US Energy Information Administration is one input that markets often monitor for near-term signals.