Closing Recap
U.S. stock futures are pointing to a slightly higher open on Monday, but the mood is cautious as investors head into a holiday-shortened trading week. Trading volumes are thin with U.S. markets closed for Presidents’ Day and mainland Chinese markets shut for the Lunar New Year. The main focus for investors is a heavy slate of delayed U.S. economic data due later in the week, including the crucial January jobs and inflation reports. The market is coming off a choppy week where a persistent rout in technology stocks weighed on the major indices. In currency markets, the Japanese yen is on the back foot after a weaker-than-expected Q4 GDP report. Precious metals are seeing some profit-taking, while crude oil is steady. Meanwhile, a “silent crash” continues in Crypto, with Bitcoin struggling near $68,000 as on-chain data signals historic capitulation losses.
Key Takeaways
- Futures Point to Cautious Open in Holiday Trade: U.S. stock futures are slightly higher, but with U.S. and Chinese markets closed for holidays, liquidity is thin and the overall tone is one of caution.
- Weak Japan GDP Tempers BoJ Hike Bets: The Japanese yen is weaker after Q4 GDP came in at a dismal +0.2% annualized, well below forecasts, tempering some of the market’s more aggressive BoJ rate hike expectations.
- Fed Rate Cut Bets Hold Firm: The market is still pricing in roughly 55 basis points of Fed rate cuts by year-end, a narrative that is providing a floor for risk assets.
- Westpac’s Dollar Bear Call: Westpac is calling for a long-term crash in the USD, targeting 1.22 on EUR/USD by mid-2027, citing a global growth rotation away from the US.
- Precious Metals Pull Back on Profit-Taking: Gold and silver prices are both lower as a firmer U.S. dollar and profit-taking weigh on the metals after their recent volatile run.
- Gold Breaks $5,000: Gold dipped below the psychological $5,000 mark in thin trading. However, this contradicts the flow data: Global Gold ETFs saw a record $19 Billion inflow in January. Retail is buying what hedge funds are selling.
- Bitcoin Slumps After Four-Week Losing Streak: The crypto market remains under heavy pressure, with Bitcoin falling after logging four straight weeks of outsized declines as speculative sentiment sours.
- Massive US Jobs Revisions: The “Strong Labor Market” narrative is unraveling. Data reveals -1.02 million jobs were revised away in 2025, the largest downward revision in 20 years. Since 2019, 2.5 million “ghost jobs” have been erased.
- Supreme Court Tariff Ruling Looms: The market is on high alert for a potential Supreme Court ruling on President Trump’s tariffs, with an opinion day scheduled for February 20.
- JPMorgan Sees Softer Dollar as a Tailwind for Stocks: In a bullish note, JPMorgan analysts argue that a weaker U.S. dollar, which they expect, should support stocks rather than hurt them.
Market Overview
The new trading week has begun in a quiet and consolidative fashion, with major market holidays in both the U.S. and China draining liquidity from the session. The underlying mood, however, is one of caution. The market is still reeling from a brutal sell-off in the technology sector last week, driven by concerns about AI disruption and stretched valuations. While Wall Street managed to stage a sharp rebound on Friday, the tech-heavy Nasdaq still finished the week with a 2% loss, a sign that the market’s leadership is being seriously challenged.
| Index | Up/Down | % | Last |
| DJ Industrials | 137 | 0.0028 | 49638 |
| S&P 500 | 21.06 | 0.0031 | 6857 |
| Nasdaq | 47 | 0.0019 | 24780 |
| Russell 2000 | (N/A) | – | 2615 |
Monday is a “Ghost Town” session, but do not mistake silence for safety. The divergence between “Paper Reality” (weak Japan GDP, massive US job downward revisions) and “Market Positioning” (Record Equity allocation by households) is reaching extreme levels. The focus today is entirely on the Takaichi-Ueda Summit. With Japan’s economy stalling, the political pressure on the BOJ to remain dovish is immense, even as inflation remains sticky. This tug-of-war is keeping the Yen volatile and could spark moves in global bond yields when liquidity returns tomorrow. The international picture is also adding to the uncertainty. In Japan, a dismal Q4 GDP print has complicated the Bank of Japan’s policy path, while in Australia, a hawkish RBA is bucking the global easing trend. With so many powerful and conflicting forces at play, the market is at a critical inflection point.
Economic Calendar
With U.S. and Chinese markets closed for holidays, today’s session is being driven by international data and positioning ahead of a busy week. Data Released Friday / Overnight:
- U.S. January CPI: A mixed report. Headline CPI came in slightly cooler than expected, but the core reading was in line.
- US Job Revisions: -1M jobs erased from 2025 data.
- Japan Q4 Preliminary GDP: A major miss, with the economy growing just +0.2% annualized, well below the +1.6% forecast.
- New Zealand Retail Sales: Remained soft, a sign of fragile household demand.
Today’s Economic Calendar:
- U.S. Markets Closed for Presidents’ Day Holiday.
- Chinese Markets Closed for Lunar New Year Holiday.
- European Session: Eurozone Industrial Production.
- 08:00 GMT – Takaichi meets BOJ Gov Ueda. (The main event).
Major Risk Events This Week:
- FOMC January Meeting Minutes (Wednesday)
- U.S. December PCE Inflation (Thursday)
- Supreme Court Opinion Day (Friday)
Asset Class Spotlight: FX, Commodities, Bonds & Crypto
After a period of extreme volatility, precious metals are seeing some profit-taking. Gold is down -0.5%, trading near the $5,000 level, while silver has fallen a sharp -1.4%. The pullback is being driven by a firmer U.S. dollar and profit-taking. The paper market is weak, but the explosive volume in Shanghai (Nickel/Tin) suggests a frantic scramble for physical materials is happening behind the scenes. Crude oil prices are steady at $62.85, with the market balancing the prospects of renewed U.S.-Iran talks against ongoing geopolitical risks.
| Asset | Up/Down | Unit / % Change | Last |
| WTI Crude | -0.01 | -0.0006 | 62.85 |
| Gold | -26.72 | -0.0053 | 5017.2 |
| Silver | -1.119 | -0.0144 | 76.845 |
| EUR/USD | -0.0001 | -0.0001 | 1.1867 |
| USD/JPY | 0.64 | 0.0042 | 153.33 |
| 10-Year Note Yield | 0 | 0 | 0.04052 |
The U.S. dollar is starting the week on a slightly firmer footing, while the yen is the notable underperformer.
- USD/JPY: The pair is rallying back above 153.30. The yen is under pressure after the weak Q4 GDP print tempered some of the market’s more aggressive BoJ rate hike expectations. The pair snapped its losing streak, climbing 0.42% as the weak Japan GDP report tempers expectations for aggressive BOJ tightening. If Takaichi pressures Ueda for stimulus today, we could see a squeeze higher toward 154.00. However, the “Intervention Threat” remains the ceiling.
- EUR/USD: The pair is consolidating its recent strong gains, trading near 1.1865. The single currency is finding support from a weaker U.S. dollar outlook and a stable ECB. The soft US CPI on Friday gave it a boost, but the weak Eurozone Industrial Production outlook is capping gains. Westpac’s call for 1.22 is a long-term bullish signal, but for now, the 1.1850 option expiry ($1.4B) is pinning price action.
- GBP/USD: The pound is trading in a tight range around 1.3640 ahead of key UK labor market data on Tuesday. Dovish BoE expectations remain a headwind for the currency. With the BoE dovish (5-4 split), any sign of wage cooling could send Cable tumbling back to 1.3600.
- AUD/USD: Resilient (0.7092). The Aussie is holding up well (+0.28%), ignoring the weak commodities session. It is benefitting from the Westpac “Weak Dollar” narrative and positioning ahead of the RBA minutes.
Cryptocurrencies: The crypto market remains under heavy pressure. Bitcoin fell over the weekend, extending its four-week losing streak as speculative sentiment sours. The token is struggling to hold the $68,000 level. In a sign of the growing distress, MicroStrategy has stated that it can withstand a drop in Bitcoin’s price to as low as $8,000 before facing a liquidation event. Treasuries: The U.S. Treasury market is closed for the holiday.
Looking Ahead
With U.S. and Chinese markets offline, today’s trading will be dominated by positioning flows and any fresh headlines. The market’s real test will come later in the week with the release of the delayed U.S. jobs and inflation reports. These data points will be critical in shaping the Federal Reserve’s policy outlook and could determine whether the market’s recent rebound has legs or if the tech-led sell-off is set to resume. With a potential Supreme Court ruling on tariffs also looming, traders should be prepared for a volatile end to the week.
What to Watch Today
- The Shanghai “Paper vs. Physical” Disconnect: Watch the metals. While COMEX prices drop, Shanghai volumes are exploding. This divergence often precedes a violent squeeze. Are the Chinese cornering the market during the Lunar New Year lull?
- Takaichi vs. Ueda (08:00 GMT): This meeting is critical. A weak GDP print gives Takaichi ammo to demand loose policy. If Ueda blinks, the Yen weakens.
- Bitcoin $68k Level: BTC is trading heavy. If it loses $68k on a holiday with no ETF inflows to save it, the drop to $65k could be swift.
- The “Ghost Jobs” Narrative: The mainstream media is starting to pick up on the -1M job revisions. Expect this to become a major political talking point this week, potentially pressuring the Fed to cut sooner to “save” the labor market that isn’t as strong as they thought.