Market Summary - February 19, 2026
Overview
The trading session in the Asia-Pacific region is characterized by calm sentiment, with most indices showing limited changes of +/- 0.50%. Key indices include Japan’s JP225, which is up 0.02%, Singapore’s SG20cash rising 0.88%, and Australia’s AU200.cash gaining 0.55%.
Currency Insights
The Australian dollar (AUD) is one of the stronger G10 currencies today, bolstered by solid labor market data that has increased expectations for a potential rate hike by the Reserve Bank of Australia (RBA) in March. The AUD/USD pair rose by 0.25% to 0.7070 before experiencing a partial retracement.
In January, employment increased by 17.8k, which, while not particularly strong, was accompanied by an unemployment rate holding steady at 4.1%, below expectations. Additionally, hours worked rose by 0.6%, marking a decline in unemployment for four consecutive months, a trend last seen before the 2022 tightening cycle.
Japanese Economic Data
Japan reported a significant surge in core machinery orders, which increased by 19.1% month-over-month and 16.8% year-over-year, greatly exceeding forecasts. This rebound follows sharp declines in November, suggesting that previous weaknesses were temporary. The positive investment momentum supports expectations of continued economic expansion in Japan.
However, two-thirds of Japanese companies have expressed concerns regarding fiscal discipline under Prime Minister Takaichi, particularly in light of proposed tax suspensions and spending plans that have unsettled the bond market and pushed yields higher. Businesses are wary of potential yen depreciation and rising financing costs.
US Federal Reserve Insights
The January FOMC minutes revealed the removal of the explicit reference to achieving the 2% inflation target by 2028. The Fed's analytical team now assesses inflation to be slightly higher than in previous projections, indicating greater uncertainty about the final stages of the fight against inflation. This omission may lead markets to interpret a "higher for longer" interest rate scenario.
Additionally, the FOMC minutes confirmed that Jerome Powell will remain as Chair until his successor is formally approved, although the confirmation process for Kevin Warsh may face delays due to political reasons in the Senate.
Geopolitical Tensions
Reports indicate that the US military is prepared for potential strikes on Iran, although no final decision has been made. This situation remains dynamic and politically sensitive, contributing to elevated geopolitical risks.