17/02/2026 Daily Reports
Global Markets Drift as Bond Yields Pressure Japan, Fed Cut Hopes Support U.S.; Oil Capped by Iran Talks, Gold Extends Slide
- Global markets are trading cautiously amid rising bond yields, geopolitical negotiations, and shifting central bank expectations. In the U.S., Nasdaq Composite futures are subdued following the Presidents Day holiday. Technology shares remain under pressure from sector rotation, though softer inflation data continues to support expectations of Federal Reserve rate cuts later this year.
- In Europe, Germany’s DAX is hovering near 24,958 with limited momentum. Broader sentiment across the region is mixed to slightly positive, but investors are waiting for a fresh catalyst after the index slightly underperformed peers in the previous session.
- Japan’s Nikkei 225 fell 0.52% to around 56,511 as Japanese Government Bond yields surged to multi-decade highs. The move follows political signals from Prime Minister Sanae Takaichi regarding a potential snap election and additional fiscal stimulus, which have unsettled bond markets and pressured equities.
- In commodities, Brent crude is trading around $68.20–$68.50. Renewed U.S.-Iran nuclear talks in Geneva are the key focus. While Iranian naval drills in the Strait of Hormuz raised supply concerns, optimism over diplomacy and expectations of a possible OPEC+ output increase in April are capping prices. Gold has dropped nearly 2% for a second straight session, slipping below $4,900 per ounce amid thin Lunar New Year trading and ahead of Fed minutes and U.S. GDP data. Silver is also correcting, down over 1% to about $74.40, weighed by a stronger U.S. dollar and profit-taking.
- Markets are currently pricing in at least two Fed rate cuts in 2026, likely starting in July, pending upcoming PCE inflation data, while geopolitical negotiations remain a central risk factor.
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FX Daily: Domestic Stories Take the Wheel
- USD Finding a Floor: The Dollar started the week with some support, driven by a “short-term undervaluation” and rising oil prices. Expect a choppy, sideways move rather than a clear breakout this week.
- The Iran Factor: Geopolitical tensions are heating up as reports of Iranian drills near the Strait of Hormuz push oil prices higher. With betting markets placing a 40% probability on a US strike by late March, the USD is gaining strength via the “energy channel.”
- Euro’s Global Ambitions: The ECB is expanding its “EUREP” repo lines. This isn’t just a technical fix; it’s a strategic move to turn the Euro into a truly “global currency” for trade and reserves, signaling a more relaxed stance on Euro strength.
- Watch the ZEW: Germany’s ZEW Expectations index is tipped to climb above 60.0—its highest since 2021. While this is a boost for morale, the EUR/USD pair still faces a potential test of the 1.1800 level.
What’s Next?
- The market is currently in a “transition phase” where macro-level US data is taking a backseat to local domestic stories. The most striking takeaway here is the geopolitical risk premium being baked back into the Dollar through oil. If tensions in the Strait of Hormuz escalate, the USD’s “safe haven” status, combined with high energy prices, will likely overshadow any positive data coming out of Europe.
