IC Markets Global – Europe Fundamental Forecast | 10 February 2026

IC Markets Global – Europe Fundamental Forecast | 10 February 2026

What happened in the Asia session?

Singapore’s GDP confirmation at 4.3% YoY, Australia’s steady NAB Business Confidence, strong Indonesian retail sales at 6.3% YoY, and South Korea’s unemployment data with markets primarily driven by spillovers from Japan’s election win fueling Nikkei gains, yen depreciation (USD/JPY ~157), and JGB selloff on stimulus bets, alongside yuan stability efforts and tariff rumor watch; these propelled Japanese equities and yen pairs as the most impacted, with ripple effects on regional risk assets like AUD and KOSPI.

What does it mean for the Europe & US sessions?

Robinhood (HOOD), Ford (F), and Coca-Cola (KO), alongside Federal Reserve official comments and the monthly U.S. retail sales data, which could influence market sentiment as European and U.S. sessions open. Positive signals from recent University of Michigan consumer sentiment, showing rising confidence and lower inflation expectations, combined with a strong ISM Manufacturing PMI, support broader market leadership, though a potential government shutdown may delay labour reports like JOLTS and Employment Situation.

​
The Dollar Index (DXY)

Key news events today

Core Retail Sales m/m (1:30 pm GMT)

Retail Sales m/m (1:30 pm GMT)

Employment Cost Index q/q (1:30 pm GMT)

What can we expect from DXY today?

The U.S. dollar remains on the defensive, trading near recent lows on the dollar index after slipping more than 0.7% on Monday amid caution ahead of delayed U.S. jobs and inflation data. Investor focus is on whether signs of a softening labour market will push the Federal Reserve toward earlier rate cuts, an outlook that favors less‑hawkish interest‑rate expectations and keeps the greenback under pressure against currencies like the euro and yen.

Central Bank Notes:

• The Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate target range steady at 3.50%–3.75% at its January 27–28, 2026, meeting, marking the second consecutive pause after three 25-basis-point cuts in late 2025.
• The Committee continues to pursue maximum employment and 2% inflation goals, with the labour market remaining soft as the unemployment rate stood at 4.4% in December 2025 amid modest job gains of 50,000.
• Officials note balanced risks to growth and employment alongside sticky inflation, with CPI at 2.7% year-over-year in December 2025 and core PCE at 2.8% due to tariffs and housing pressures; headline PCE at 2.6%.
• Economic activity expanded robustly at a 4.4% annualized rate in Q3 2025, with Q4 estimates around 5% per the Atlanta Fed GDPNow, supported by consumer spending despite prior trade tensions and shutdown effects.
• December 2025’s Summary of Economic Projections forecasts 2025 unemployment at a median of 4.5%, 2026 GDP growth at 2.3%, and core PCE at 2.5% (down from prior 2.6%), with the dot plot signalling one more cut in 2026; January updates may reflect resilient Q4 growth.
• The Committee maintained its data-dependent approach, noting a stable but soft labour market and inflation above target, while holding rates steady at 3.50%-3.75%; dissents likely persist amid divisions on the pace of easing.​
• The FOMC continues its adjusted quantitative tightening post-December 1, 2025, conclusion of the prior program, with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month to maintain ample reserves.
• The next meeting is scheduled for 17 to 18  March 2026.

Next 24 Hours Bias
Medium Bearish

Gold (XAU)

Key news events today

Core Retail Sales m/m (1:30 pm GMT)

Retail Sales m/m (1:30 pm GMT)

Employment Cost Index q/q (1:30 pm GMT)

What can we expect from Gold today?

Gold prices showed resilience amid mixed global cues, with MCX Gold futures in India rallying to near ₹1,58,060 per 10 grams, reflecting sustained safe-haven demand and recovery from early February losses. Spot gold (XAU/USD) hovered around $5,010-$5,067 per ounce, stabilizing after recent volatility, supported by a weaker US dollar but facing caution ahead of key US jobs, inflation, and retail sales data. Investor dip-buying boosted gold and silver ETFs following a sharp sell-off.

Next 24 Hours Bias   
Strong Bullish

The Euro (EUR)

Key news events today

No major news event

What can we expect from EUR today?

The euro ended last week and continues on a relatively strong footing, trading just above 1.18–1.19 versus the US dollar as the European Central Bank holds rates steady and euro‑area inflation stays near its 2% target. A resilient but cautious euro‑area outlook, combined with a moderately weakening dollar and investor expectations of prolonged high ECB rates, supports the single currency’s appreciation, even as ECB officials flag that a stronger euro and global trade frictions are weighing on export competitiveness.

Central Bank Notes:

• The Governing Council of the ECB is widely expected to keep the three key interest rates unchanged at its 4–5 February 2026 meeting, holding the main refinancing rate at 2.15%, the marginal lending facility at 2.40%, and the deposit facility at 2.00%. This reflects ongoing confidence that the stance supports medium-term price stability, with headline inflation projected below 2% through 2026-2027 amid balanced risks. Commentary emphasizes a data-dependent approach without pre-committing to any path, as uncertainties from US policy and trade persist.
• Price dynamics continue to stabilize near the 2% target. Headline HICP inflation held around 2.1-2.2% into late 2025, with December 2025 figures and early 2026 base effects expected to ease it toward 1.9% for the year ahead. Services and core inflation show moderation, though sticky elements remain, offset by anchored expectations and subdued producer prices.
• Eurosystem staff projections from December 2025 project headline inflation at 2.1% for 2025, falling to 1.9% in 2026, 1.8% in 2027, and approaching 2% by 2028. Risks are balanced, with downsides from weak external demand balanced by potential upsides from fiscal impulses or geopolitical flares.
• Euro area GDP growth shows resilience, with Q4 2025 estimates around 0.3-0.4% qoq following Q3’s 0.3%, supporting annual forecasts of 1.2-1.4% for 2025-2027. Surveys indicate stabilization via public investment and external demand, despite softer private consumption amid trade uncertainties.
• The labour market remains tight, with unemployment steady near 6.4% through late 2025 at historic lows, backed by rising participation and real wage gains as inflation eases. Credit conditions support moderate household spending and firm investment expansion.
• Business sentiment is cautious due to US tariffs, trade tensions, and policy shifts under President Trump, but easing supply chains and a weaker euro provide modest support for exports. Domestic investment gains traction from fiscal measures.
• The Governing Council will maintain its meeting-by-meeting, data-dependent decisions, monitoring inflation trends, transmission, and the broader outlook, with both hikes and cuts possible absent a fixed path.
• Balance sheet normalization advances smoothly, with APP and PEPP reinvestments halted and portfolios shrinking at a controlled pace without liquidity stress.
  

​The next meeting is on 18 to 19 March 2026

Next 24 Hours Bias
Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news event

What can we expect from CHF today?

The Swiss Franc maintains its robust safe-haven status, with USD/CHF hovering near decade lows around 0.774 amid persistent USD selling due to Fed Chair speculation, Trump tariff threats, and global uncertainties boosting CHF demand; SNB’s steady 0% policy supports stability despite export concerns, marking CHF’s standout yearly gain of nearly 15%.

Central Bank Notes:

• At its 11 December 2025 monetary policy assessment, the Swiss National Bank (SNB) is widely expected to leave the policy rate unchanged at 0%, extending the pause that began in September as the Governing Board judges that current settings are sufficient to keep inflation near, but still below, its target while avoiding an unnecessary move into negative rates.
• Recent data show that the tentative rebound in Swiss inflation has stalled, with headline CPI easing from 0.1% year‑on‑year in October to 0.0% in November and core inflation slipping to about 0.4%, reinforcing the view that underlying price pressures remain very weak and that deflation risks, while contained, have not fully disappeared.
• The SNB’s conditional inflation forecast is likely to remain close to the September projections, with inflation still seen averaging roughly 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027 under an unchanged policy rate path, though the latest CPI prints argue for a slightly lower near‑term profile and keep open the option of renewed easing if activity or prices weaken further.
• The global backdrop has deteriorated further, as continuing U.S. tariff actions and softer external demand weigh on world trade, while uncertainty in key European and U.S. markets for Swiss exports persists, leaving the SNB cautious about the growth outlook despite Switzerland’s relatively resilient domestic demand.
• Business and labour-market sentiment in export‑oriented manufacturing remains subdued, with firms reporting pressure on margins from the still‑strong franc and softer foreign orders, although the broader economy is still expected to grow at around 1–1.5% in 2025 and unemployment only drifting up gradually from low levels.
• The SNB continues to stress its willingness to act if deflation risks re‑emerge, reiterating that it can ease policy through renewed rate cuts or targeted foreign‑exchange intervention if necessary, while also highlighting its commitment to transparent communication, including the publication of detailed minutes from recent assessments and ongoing dialogue with international partners on FX policy

The next meeting is on 19 March 2026.

Next 24 Hours Bias
Strong Bullish

The Pound (GBP)

Key news events today

No major news event

What can we expect from GBP today?

The Swiss Franc hovered near decade-high levels against the USD, supported by ongoing safe-haven demand and expectations of steady Swiss National Bank policy, with USD/CHF trading below 0.7750 after recent losses; no breaking intraday news emerged, but its 15.45% yearly appreciation underscores resilience amid dollar weakness from Fed concerns and trade rumours.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) meets on 5 February 2026, with the current Bank Rate at 3.75 per cent following a narrow 5–4 vote to cut by 25 basis points at the 17 December 2025 meeting. Markets now price in around a 70 per cent chance of another 25-basis-point cut to 3.50 per cent, though this hinges on fresh inflation prints and labour data ahead of the decision, positioning this note as pre-meeting guidance. The February meeting will include a Monetary Policy Report with updated forecasts.
• Quantitative tightening (QT) is likely to proceed unchanged, with gilt holdings reductions held at the slower 2025 pace amid ongoing emphasis on gradual balance-sheet normalisation calibrated to liquidity conditions. Officials continue to frame the QT path as supportive of a restrictive overall stance.
• Headline CPI inflation stood at 3.6 per cent year-on-year in October 2025, with services pressures easing slowly toward mid-single digits, keeping it well above the 2 per cent target. The MPC’s projections point to inflation hovering near 3 per cent through much of 2026, assuming wage growth moderates further and energy prices stabilise.
• UK growth remains subdued into early 2026, with unemployment edging above 5 per cent on recent three-month averages and regular pay growth cooling to the mid-4 per cent range. These trends signal ongoing labour-market softening, aiding the case for domestic disinflation.
• Global headwinds persist, including tepid world growth and volatile commodities, which could amplify sterling and gilt market swings around the meeting. The MPC views upside shocks to energy or food prices as manageable absent a sustained demand rebound.
• Inflation risks are balanced but tilted: downside from feeble demand and job losses, upside from entrenched services inflation, wage stickiness, and potential labour slack underestimation.
• The MPC enters February with a restrictive but easing-ready posture, favouring data-dependent 25-basis-point steps if disinflation advances, while stressing sustained 2 per cent alignment before deeper cuts. Forward guidance will underscore gradualism, with Governor Bailey likely avoiding firm commitments on pace at the press conference.

• The next meeting is on 19 March 2026.
  
  Next 24 Hours Bias
  Medium Bearish

The Canadian Dollar (CAD)

Key news events today

No major news event

The Canadian dollar is trading higher versus the U.S. dollar, hovering around 1.355–1.358 after recently hitting a 10‑day peak, underpinned by a shift to net‑long speculative positioning, resilient labour data, and firmer oil prices. The loonie is also benefiting from a weaker U.S.‑dollar backdrop and expectations that the Bank of Canada will not ease as aggressively as the Federal Reserve, leaving the Canadian dollar in a slightly stronger but range‑bound position over the near term.
​
Central Bank Notes:

• The Governing Council left the target for the overnight rate unchanged at 2.25% at its 28 January 2026 meeting, consistent with market expectations and reinforcing the pause in easing after the December hold. The Bank highlighted ongoing global trade uncertainties, including U.S. policy risks, but noted a steadier external environment with no immediate need for policy shifts amid fragile world demand.
• Uncertainty from U.S. tariffs continues to cloud business confidence, yet Canadian manufacturing PMI and export orders have stabilised further, with backlogs modestly increasing despite restrained investment. Recent data indicate goods exports, particularly energy, provided ongoing support, though firms remain selective in expansion plans.
• Canada’s economy maintained momentum into late 2025 and early 2026, with Q4 GDP estimates around 2.0-2.5% annualised after Q3’s 2.6% rebound, driven by crude oil exports, public spending, and partial service sector recovery. January flash indicators suggest a balanced start to Q1, though weather disruptions slightly tempered output gains.
• Services activity strengthened, with PMI holding above 50 and gains spreading to tech, tourism, and professional sectors; however, consumer services stayed uneven due to persistent high prices curbing non-essential spending despite wage growth. The Bank views this broadening as a sign of structural adjustment progressing.
• Housing markets edged firmer nationally, with resales and prices up modestly in December-January on lower rates and steady demand, though major cities face renewed pressures tempered by strict lending rules and affordability hurdles. The Bank expects this stabilisation to persist without overheating.
• CPI inflation held near 2.2% year-over-year in December 2025 and into January 2026 estimates, within the 1-3% band, while core metrics like CPI-median and trim eased toward 2.8%, signaling waning underlying pressures despite shelter and energy volatility. This supports the Bank’s confidence in target convergence.
• Officials reaffirmed the 2.25% rate as appropriate for sustaining 2% inflation and economic adjustment, with no near-term cuts anticipated absent growth or inflation shocks. Focus shifts to Q1 data durability, core trend sustainability, and trade policy clarity.
• The next meeting is on 25 March 2026.

Next 24 Hours Bias
Medium Bullish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from Oil today?

Oil markets are drifting slightly lower after recent gains, as traders balance a looming first‑quarter supply surplus against persistent geopolitical risk around Iran and the Strait of Hormuz. Brent is holding in the high‑$60s per barrel and WTI in the low‑$60s, levels that reflect a modest risk premium but also recognition that growing output from OPEC+ and producers such as the U.S., Brazil, and Guyana could leave the market oversupplied by as much as 4 million barrels per day in early 2026.

Next 24 Hours Bias
Weak Bullish