Macro View - February 11, 2026 (Morning)

 ## Macro Snapshot The macro landscape is currently influenced by strong U.S. labor market data, which showed that the economy added **130,000 jobs** in January, exceeding expectations. This has led to a recalibration of market expectations regarding Federal Reserve monetary policy, with some analysts now predicting potential rate cuts if job growth continues to soften in the coming months. The unemployment rate also fell to **4.3%**, indicating resilience in the labor market amidst rising inflation concerns. In global markets, U.S. Treasury yields saw a decline as traders reacted to the robust job figures, with the yield on the 10-year note dropping to **3.45%**. The dollar experienced weakness, which could further support commodity prices. Meanwhile, Asian markets showed positive momentum, with investors optimistic about upcoming earnings and economic indicators. ## Overnight Global Markets - **Asia:** Asian equity markets rallied, with the Nikkei 225 up **1.78%** as investors welcomed the strong U.S. jobs report, viewing it as a sign of economic stability. The Hang Seng Index also saw gains as Chinese markets remained buoyed by expectations of fiscal stimulus amid ongoing inflationary pressures. - **Europe:** European markets opened with mixed signals as traders awaited the U.S. jobs report. The overall sentiment remains cautious, particularly in financial sectors facing potential headwinds from the looming regulatory landscape around AI and technology disruptions. ## Economic Data Today - **U.S. Job Openings and Labor Turnover Survey (JOLTS)** at **10:00 AM ET** - Expectation: **9.5 million** - This report will provide insights into labor market dynamics and could inform future Fed policy decisions. ## Fed & Central Banks The latest Fed commentary is focused on balancing inflation control with economic growth. The strong job data has prompted discussions around potential adjustments to interest rate strategies. Market participants are closely monitoring the JOLTS data for further clues on labor market health and its implications for monetary policy. Across the Atlantic, the European Central Bank (ECB) is facing pressures to tighten monetary policy amid rising wage growth, which is expected to pick up in the second half of the year. ## Rates & Currencies - Treasury yields have declined, with the 2-year note yielding around **4.25%** and the 10-year at **3.45%**. This drop reflects market sentiment adjusting to the strong jobs report and shifting expectations around the Fed's future actions. - The U.S. dollar has weakened against major currencies, with the Euro gaining ground, as traders reassess the Fed's trajectory in light of the labor market strength. - The weakened dollar is expected to provide support for equities and commodities, particularly as inflation remains a concern. ## Commodities - **Oil:** Prices have remained steady, driven by geopolitical tensions in the Middle East, particularly with rising U.S.-Iran tensions. The market is reacting to potential supply constraints amid increased demand forecasts. - **Gold:** Gold prices have seen a rally, trading higher as the dollar weakens and investors seek safe-haven assets in light of economic uncertainties. ## Macro Risks to Watch - The upcoming JOLTS data could significantly influence market sentiment and Fed rate expectations. - Continued geopolitical tensions, especially related to U.S.-Iran relations, could lead to volatility in oil prices. - The potential for a slowdown in consumer spending, as indicated by recent retail sales figures, poses a risk to economic growth and market stability. ## Positioning Implications Traders should prepare for possible volatility in response to today's JOLTS data. A strong report may lead to further adjustments in rate expectations, while a weak reading could reinforce calls for a more accommodative monetary stance. Investors might consider positioning in sectors that benefit from a weaker dollar, such as commodities, while staying cautious on equities that may be sensitive to interest rate changes.