Calm before the storm? – North American session Market wrap for February 17

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After yesterday's very dull session, US traders came back but haven't really turned the volatility trough around.

Except for commodities and precious metals, which lost a few percentage points in today's action, as risk premiums related to US-Iran developments keep unwinding, there hasn't been much.

Markets received a bunch of data to trade on, including the Canadian CPI, UK Employment, EU Surveys, and Central Bank speeches.

Yet, most directional attempts saw profit-taking and mean reversion.

With the latest turn towards duration, as seen in the past week's bounce in US Treasuries, the 10-Year Yield is now right around 4%.

Reactions here could be pretty interesting, particularly since the same level has been rejected about a dozen times since the peak of the hike cycle. Keep in mind that the level did get breached on a few occasions, but never consistently.

The 10-Year Yield is forming a bizzarely shaped Head & Shoulders formation which would be pointing to a 2.50% level if it were to materialize. It could also drag quite some implications for Markets as this would be seen as a swift turn towards quality.

However, it looks far and not so precise for now so keep an eye on this chart.

Its 50-Month MA will also come as support – Very interesting times ahead for Treasuries and the US Dollar

Read More:

• US Dollar Index (DXY) tries to break 2026 downtrend despite 14-Year record bear positioning
• Traders are looking for direction – Dow Jones and US Index Outlook
• Gold & Precious Metals slide: Iran diplomacy and Lunar New Year drain liquidity

The sharp turn in commodities is now looking pretty clear – A typical unwinding of geopolitical risk-premium.

Fading it could be slightly dangerous as long as US-Iran talks keep sending more positive developments – Nevertheless, with a few more days of retracements in Metals and Oil, some interesting re-entry points could be reached.

On the other side of the performance spectrum, European Equities have shined despite the pretty nasty EU Surveys overnight. Some odds for cuts are getting slightly repriced but for now, they are still quite far.

But the most interesting point of view is the fact that they could be further from the AI repricing sagging US stock performance as of late. European Stocks are defensive, closer to manufacturing, and could see a more gradual gain from the AI – Similarly to the HALO trade developing in Markets.

Except for the Pound which got heavily battered (The Brits love this expression) after the poor UK Labour report, FX performance remained very rangebound.

This is particularly the case when looking at the latest Dollar pump-and-dump – Go check our latest analysis if you haven't done so!

The calendar is absolutely packed again for this evening and tomorrow's action.

This evening welcomes the RBNZ Rate Decision which will mark the debut for Governor Anna Breman – An important day for NZD traders (FX aficionados should be close attention)

The Pound will once again be on the menu with UK CPI, and this doesn't mention the rest.

I invite you to check out our Calendar to learn more.

Safe Trades!

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