Market Wrap 2026-02-18

Core-Brief

18 Feb 2026 — 10 min read

MARKET REPORT

According to Axios, citing sources, the Trump administration is reportedly closer to a major conflict with Iran than commonly perceived; a potential military engagement is described as a large-scale, multi-week operation involving a joint effort by the US and Israel.
European stock markets are showing gains across the board, with the IBEX index leading. US equity futures are extending gains from the previous trading day.
The US Dollar Index (DXY) is firmer, the New Zealand Dollar (Kiwi) weakened following the Reserve Bank of New Zealand (RBNZ) announcement, while the British Pound (Cable) is holding steady after UK inflation data.
UK Gilts are experiencing volatility after the release of CPI data; US Treasuries are slightly lower ahead of the release of the Federal Open Market Committee (FOMC) minutes.
West Texas Intermediate (WTI) and Brent crude oil prices are recovering from losses incurred the previous day as Ukraine talks conclude; Metals are rebounding.
Upcoming key events include US Durable Goods Orders, Industrial Production (January), Housing Starts (November/December), the Atlanta Federal Reserve GDPNow forecast, and the FOMC Minutes (January). Scheduled speakers include the European Central Bank's (ECB) Schnabel and the Federal Reserve's Bowman. There will be supply data from the US. Earnings reports are expected from Analog Devices, Carvana, DoorDash, Booking Holdings, Moody's, Garmin, and Orange.

EUROPEAN TRADE

EQUITIES

European stock exchanges (STOXX 600 +0.7%) are trading positively across the board, with the IBEX (+1.1%) showing the largest gains, followed by the FTSE MIB (+0.9%) and the FTSE 100 (+0.7%).
Most European sectors are in positive territory, with Basic Resources (+1.9%) and Banks (+1.5%) leading, while Chemicals (-1.1%) are lagging. The Basic Resources sector is benefiting from a rebound in metals prices and positive earnings from Glencore (+3.3%). Monte dei Paschi's board approved a plan to fully integrate Mediobanca and delist the bank while preserving the brand.
US equity futures (ES +0.5%, NQ +0.6%, RTY +0.4%) are all in the green, continuing to recover from losses seen earlier in Tuesday's trading.
BAE Systems (BA/ LN) reported the following FY results (GBP): Underlying EBIT 3.32bln (expected 3.27bln), Div/shr 36.3p (expected 35.5p), Revenue 30.7bln (expected 30.7bln); the company projects FY26 underlying EBIT growth of +9-11% and Revenue growth of +7-9%.
Glencore (GLEN LN) reported the following FY results (USD): Revenue 247.5bln (expected 233.9bln); Adj. EBITDA 13.51bln (expected 13.22bln), Adj. EBIT 5.98bln (expected 5.72bln), and plans to return USD 2bln to shareholders.
Nvidia Corp (NVDA) announced a multiyear strategic partnership with Meta (META), collaborating on deploying Nvidia Vera CPUs, with potential for large-scale deployment in 2027; Meta is building AI infrastructure with Nvidia.
Palo Alto Networks Inc. (PANW) reported the following Q2 2026 results (USD): Adj. EPS 1.03 (expected 0.94), Revenue 2.594bln (expected 2.58bln). Guidance: Q3 adj. EPS 0.78-0.80 (expected 0.92). Q3 revenue 2.941-2.945bln (expected 2.60bln).

FX

G10 currencies are mostly lower across the board; GBP remains afloat following above-expected Core and Services metrics, whilst the NZD is the clear laggard in the aftermath of the RBNZ’s decision to keep rates steady (as expected), but held a dovish skew.
The DXY is mildly firmer this morning, and currently trades at the upper end of a 97.11-97.32 range, holding just above its 21 DMA at 92.20. Further upside could see a test of the prior day’s high at 97.54. Really not much driving things for the index this morning, but could face some volatility on a) geopols, b) US data, c) FOMC Minutes.
GBP remains resilient vs the USD strength this morning, following the region’s inflation report, with particular focus on the hotter-than-expected Services and Core metrics . In more detail, the headline printed in line with the market consensus at 3.0% Y/Y, and as such, slightly hotter than the BoE's 2.9% forecast for the period. The headline was also accompanied by a hotter-than-expected core and services figure. M/M metrics were broadly as expected, unwinding the December base effects. Taking a look at food inflation, it fell to 3.6% (prev. 4.5%); ING suggests that hawks can become “a little more relaxed about the upside risks to inflation”. ING sticks with its call for a March cut and then another by June. Market pricing shifted a little dovishly, with the probability of a March cut now seen at 95% vs 84% pre-release . Cable initially knee-jerked lower, and then immediately reversed that move to print a session peak at 1.3577; the upside then gradually petered out, to now trade within a 1.3549-1.3577 range.
NZD is the clear underperformer this morning, following the RBNZ’s decision to keep rates steady (as expected), though the accompanying commentary held a dovish skew. In brief, the Bank stated that the committee will continue to assess incoming data carefully and if the economy evolves as expected, monetary policy is likely to remain accommodative for some time. Furthermore, it stated that inflation is most likely returning to within the committee's 1–3% target band in the current quarter and that, conditional on the central economic outlook, the OCR is projected to remain around its current level in the near term before increasing from late 2026. NZD/USD currently trades around the 0.60 mark (coincides with its 21 DMA), within a 0.5989-0.6053 range.

FIXED INCOME

A bearish start for fixed income , though only modestly with USTs lower by a handful of ticks in a narrow 112-30+ to 113-05+ band. US specifics thus far are a little light as we continue to digest the better-than-expected data on Tuesday and Fed speak that was a little hawkish from voter Barr, weighing on the complex. More insight will be derived from the FOMC Minutes this evening, which follows a 20yr auction and Fed's Bowman.
The main focus point this morning is Gilts , though the benchmark is little changed as things stand. Opened lower by 17 ticks and then fell one more to a 92.03 trough in reaction to the morning's CPI data, while the headline Y/Y was in-line with market consensus, it was hotter than the BoE's view; additionally, core and services figures came in hotter than the market forecast. However, the net takeaway from the release is that it doesn't definitely solve the March vs April debate, with the decision in March looking like another 5-4 with Bailey to tie-break.
Bunds are little moved in a 129.15-39 band, no move to the morning's Final French CPI series. The main point of focus for the EZ is reporting in the FT, among others, that ECB President Lagarde could step down before her term ends in October 2027. The FT outlines, citing sources, that this would ensure both French President Macron and German Chancellor Merz are in power and have a significant say in appointing a successor. No move to a tepid 2036 Bund auction.
Germany sells EUR 4.238bln vs exp. EUR 5.5bln 2.90% 2036 Bund: b/c 1.46x (prev. 1.65x), average yield 2.73% (prev. 2.85%), retention 22.9% (prev. 23.3%).
Kenya reportedly intends to issue additional USD denominated noted, potentially in multiple series, Bloomberg reported.
Australia sold AUD 1.2bln 4.25% October 2035 bonds, b/c 3.90, avg. yield 4.7439%.

COMMODITIES

Crude prices are nursing prior day losses following yesterday's geopolitical development between the US and Iran, which ended on a more positive note, though caution remains. Thus far, officials suggest that talks were substantive and some issues were clarified, but highlighted that talks were difficult. Thereafter, the crude complex notched session highs following an Axios report, which suggested that the Trump administration is closer to a major war with Iran than people realise. Brent Apr'26 moved higher from USD 67.74/bbl to a high of USD 68.08/bbl over six minutes.
In the metal space, spot gold and silver made gradual strides higher during the APAC session. XAU trades above the USD 4,900/oz within a USD 4869.95-4961.4/oz range, whilst XAG trades just above USD 75/oz within the 72.2305-57.783 range. Newsflow has been light for precious metals thus far in the European session.
Copper prices are also rebounding, nursing prior day losses and in tandem with the improving risk tone. 3LME copper trades in the upper end range of USD 12.649-12.731.2k/t. Reminder that China, the largest market for copper, remains closed due to the Chinese new year’s.
Hungary seeks EU approval to import Russian seaborne crude , says the Hungarian Minister of Foreign Affairs and Trade.
Slovakia has declared an oil emergency and will release oil from its state reserves.
US Energy Secretary Wright said they are looking to end Iran's progress towards nuclear weapons and want IEA nations to focus on energy security.
Study shows that US has enough raw copper to meet domestic demand and can meet 146% of annual demand using raw copper from overseas and domestic mines and from scrap, while China 40% of its demand, according to Benchmark Mineral Intelligence cited by FT.

TRADE/TARIFFS

Japanese PM Takeichi confirms to have agreed with the US on the first set of investment projects.

NOTABLE EUROPEAN DATA RECAP

UK Services Inflation Rate (Jan) Y/Y 4.4% (exp. 4.3%, Prev. 4.5%).
UK Inflation Rate MoM (Jan) M/M -0.5% vs. Exp. -0.5% (Prev. 0.4%, Low. -0.6%, High. -0.4%).
UK Inflation Rate YoY (Jan) Y/Y 3.0% vs. Exp. 3.0% (Prev. 3.4%, Low. 2.9%, High. 3.5%).
UK Core Inflation Rate MoM (Jan) M/M -0.6% vs. Exp. -0.7% (Prev. 0.3%, Low. -0.8%, High. -0.6%).
UK Core Inflation Rate YoY (Jan) Y/Y 3.1% vs. Exp. 3.1% (Prev. 3.2%, Low. 2.9%, High. 3.3%).
UK PPI Output MoM (Jan) M/M 0% vs. Exp. 0.2% (Prev. 0%).
UK PPI Core Output MoM (Jan) M/M 0.2% (Prev. -0.2%, Rev. From -0.1%).
UK PPI Input YoY (Jan) Y/Y -0.2% (Prev. 0.5%, Rev. From 0.8%).
UK PPI Input MoM (Jan) M/M 0.4% vs. Exp. 0.4% (Prev. -0.5%, Rev. From -0.2%).
UK PPI Output YoY (Jan) Y/Y 2.5% (Prev. 3.1%, Rev. From 3.4%).
UK PPI Core Output YoY (Jan) Y/Y 2.9% (Prev. 3.1%, Rev. From 3.2%).
UK Retail Price Index MoM (Jan) M/M -0.5% vs. Exp. -0.4% (Prev. 0.7%, Low. -0.6%, High. -0.2%).
UK Retail Price Index YoY (Jan) Y/Y 3.8% vs. Exp. 3.9% (Prev. 4.2%, Low. 3.7%, High. 4.1%).
French Inflation Rate YoY Final (Jan) Y/Y 0.3% vs. Exp. 0.3% (Prev. 0.8%).
French Inflation Rate MoM Final (Jan) M/M -0.4% vs. Exp. -0.3% (Prev. 0.1%).

NOTABLE EUROPEAN HEADLINES

UK Chancellor Reeves reiterated that the UK will take defense spend past 2.6% in future budgets.

CENTRAL BANKS

RBNZ keeps the OCR at 2.25%, as expected, while it stated that the committee will continue to assess incoming data carefully. If the economy evolves as expected, monetary policy is likely to remain accommodative for some time. Committee is confident that inflation will fall to the 2% midpoint over the next 12 months due to spare capacity in the economy, modest wage growth, and core inflation within the target band. Inflation is most likely returning to within the committee's 1–3% target band in the current quarter.
RBNZ Governor Breman said OCR trajectory is aligned with the anticipated evolution of the economy, adds OCR track indicates there is a possibility of a hike towards the end of the year but noted Q4 hike is not fully priced in to the OCR track.
RBNZ Governor Breman said forward path reflects stronger economic outlook.
Fed's Daly (2027 voter) said models show productivity gains are lifting the neutral rates, labour market shows less churn and dynamism, adds impact on neutral rate is unlikely in the near term and growth is solid, but firms cite uncertain demand.
ECB's Villeroy said the ECB has won the battle against inflation, domestic French inflation is undershooting on temporary factors but it is not too low.
ECB President Lagarde is expected to leave the ECB, before her eight-year term ends in October 2027, according to FT citing a person familiar with her thinking. However, ECB said that Lagarde remains committed to her role and has not made a decision on her departure.

GEOPOLITICS

RUSSIA-UKRAINE

Ukraine's President Zelensky told reporters that they've agreed to continue peace discussions, adds that talks were difficult and positions are different for now.
Head of Ukrainian delegation says negotiations were substantive and there was progress; a number of issues were clarified.
Update of new round of Ukraine talks is that there's been no concrete date set, IFX reported.
The top Russian negotiator said the talks were difficult but business-like, RIA reported.
Ukraine talks in Geneva have ended, new round of talks will be held soon, RIA reported.
US Special Envoy Witkoff said US facilitated the third trilateral meeting between Ukraine and Russia, adds Ukraine and Russia agreed to update leaders and pursue an agreement.

MIDDLE EAST

The Trump administration is closer to a major war with Iran than people realise, Axios reports citing sources; a military operation would likely be a massive, weeks long campaign that will be a joint US-Israeli attack.
US Energy Secretary Wright said they are looking to end Iran's progress towards nuclear weapons and want IEA nations to focus on energy security.
Iran and Russia are reportedly said to conduct navy drills in the Sea of Oman and Northern Indian Ocean on February 19th.

OTHERS

US Secretary of State Rubio has been holding secret talks with the grandson of Cuba's Castro, Axios reported citing sources.
US State Department senior official said the US would resume nuclear tests to match 'opaque' Chinese activity and flagged new details about a 2020 test the US recently accused China of secretly conducting, according to SCMP.

CRYPTO

Bitcoin is trading rangebound around USD 68,000 while Ethereum returns above USD 2,000.

APAC TRADE

APAC stocks traded higher in continued thin conditions as many regional bourses remained closed for holidays.
ASX 200 mildly gained amid outperformance in real estate, tech and financials, with the latter helped by gains in Big 4 bank NAB post-earnings, although miners, materials and resources were at the other end of the spectrum after the prior day's commodities-related pressure.
Nikkei 225 rallied back above the 57,000 level with sentiment in Japan underpinned by the better-than-expected trade data for January, which showed the fastest pace of increase in exports in more than three years.

NOTABLE ASIA-PAC HEADLINES

Japanese PM Takaichi affirms will consider revision of constitution and wants to pass budget and tax reform bill quickly, adds to consider revision of imperial household law.
Japan's Finance Minister Katayama said will carry out responsible fiscal policy, while keeping in mind the IMF's preliminary policy recommendation.
IMF said if volatility hits market liquidity, the BoJ should be ready for targeted interventions, such as emergency bond buying, and that Japan should avoid cutting consumption tax as it would weaken fiscal space and raise fiscal risks.

NOTABLE APAC DATA RECAP

Australian Wage Price Index QoQ (Q4) Q/Q 0.8% vs. Exp. 0.8% (Prev. 0.8%, Low. 0.7%, High. 0.8%).
Australian Wage Price Index YoY (Q4) Y/Y 3.4% (Prev. 3.4%, Low. 3.3%, High. 3.4%).
Australian Westpac Leading Index MoM (Jan) M/M -0.1% (Prev. 0.1%).
Australian Westpac Leading Index MM (Jan) -0.1% (Prev. 0.1%).
Japanese Imports YoY (Jan) Y/Y -2.5% vs. Exp. 3% (Prev. 5.2%, Rev. From 5.3%, Low. -3.3%, High. 7%).
Japanese Exports YoY (Jan) Y/Y 16.8% vs. Exp. 12% (Prev. 5.1%, Low. 4.9%, High. 16.1%).
Japanese Balance of Trade (Jan) -1152.7B vs. Exp. -2142.1B (Prev. 113.5B, Rev. From 105.7B, Low. -2770B, High. -1775.1B).
New Zealand PPI Input QoQ (Q4) Q/Q -0.5% vs. Exp. 0.5% (Prev. 0.2%).
New Zealand PPI Output QoQ (Q4) Q/Q 0.1% vs. Exp. 0.7% (Prev. 0.6%).