Market Quick Take - 19 February 2026

Market Drivers and Catalysts

• Equities: US equities rose on hopes of rate cuts and strong AI demand, while Europe edged higher due to defense sector strength. Asia steadied ahead of the holiday.
• Volatility: VIX near 20, with hawkish Fed minutes and PCE data ahead, keeping puts in demand.
• Digital Assets: Bitcoin and Ethereum remained in a range, with macro factors influencing prices; PCE data is a key catalyst.
• Fixed Income: US treasury yields increased following FOMC minutes and a weak 20Y auction; Japan's long bonds saw strong demand.
• Currencies: USD strengthened on hawkish Fed minutes and rising US yields; AUD rallied on positive jobs data, while JPY weakened.
• Commodities: Gold paused at USD 5,000 as Fed caution offset Middle East tensions; Brent crude moved above USD 70.

Macro Events

• Federal Reserve officials expressed caution about cutting interest rates, indicating potential rate hikes if inflation persists.
• Australia's unemployment rate remained steady at 4.1%, with strong employment growth reported.
• UK inflation eased to 3.0%, the lowest since March 2025, driven by slower price increases in transport and food.
• Japan's core machinery orders surged 19.1% in December, indicating strong manufacturing activity.
• US housing starts rose 6.2% in December, exceeding forecasts, while manufacturing output increased by 0.6% in January.
• The NY Fed's business activity index fell sharply, indicating contraction in the manufacturing sector.

Macro Calendar Highlights

Key events include:

• 1200 – USDA 2026-27 Acreage Outlook for Key Crops
• 1330 – Philadelphia Fed Business Outlook for February
• 1500 – Eurozone February Consumer Confidence
• 1700 – EIA Weekly Crude and Fuel Stocks Report

Earnings This Week

Notable earnings reports include:

• Today: Analog Devices, Booking Holdings, Glencore, Carvana
• Thursday: Walmart, Alibaba, Nestle, Airbus
• Friday: Air Liquide, Warner Brothers Discovery, Anglo American

Equities Overview

US markets saw gains with the Nasdaq 100 up 0.8%, S&P 500 up 0.6%, and Dow up 0.3%. Nvidia and Amazon saw significant gains, while Palo Alto Networks fell sharply due to a weaker outlook.

In Europe, defense shares led the Stoxx 50 and Stoxx 600 higher, while Carrefour faced declines due to weaker profits. In Asia, the Hang Seng Index rose 0.5% ahead of the Spring Festival.

Volatility Insights

The VIX eased to 19.62, indicating a lack of panic in the markets, although investors are cautious ahead of key inflation data.

Digital Assets Update

Crypto markets are cautious, with Bitcoin around $67,142 and Ethereum near $1,983. Price movements are closely tied to macro developments.

Fixed Income Analysis

US Treasuries sold off following hawkish FOMC minutes, with yields rising. Japan's bond yields showed a flattening curve.

Commodities Market

Gold remains range-bound around USD 5,000, while oil steadied after a significant jump due to geopolitical tensions. Cocoa futures hit a three-year low.

Currency Movements

The US dollar strengthened broadly, with the AUD rising on positive labor data, while the JPY weakened against the USD.