Daily Market Outlook, February 5, 2026
Daily Market Outlook, February 5, 2026
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Thursday’s tape looked like a simultaneous bid for “broader growth” and a pullback in risk. Traders stepped away from megacap tech—long treated as a safe-haven trade thanks to steady earnings—and began leaning toward a wider set of companies tied to improving economic conditions. But that rotation was undermined by a sharp tech selloff in Asia, where valuation concerns and rising AI-related costs pushed MSCI’s Asian technology index to a sixth straight decline. Samsung and SoftBank weighed, while South Korea’s AI-heavy Kospi was hit hardest, sliding 3.5%. After the U.S. close, softer-than-hoped results from Alphabet, Qualcomm, and Arm pressured their shares in after-hours trading, dragging U.S. futures lower and setting Europe up for a choppy open. Oil prices climbed on reports of setbacks in U.S.–Iran nuclear talks, adding another macro complication. In rates and FX, the pound and euro edged down ahead of expected policy holds from the BoE and ECB. Elsewhere, the liquidation was brutal: silver plunged as much as 17% and gold fell 3.5% as both struggled to stabilise after a historic break, while bitcoin extended losses and briefly neared $70,000 as risk appetite faded.
Domestic markets anticipate a 7-2 vote from the UK MPC to maintain the Bank Rate at 3.75%, with dissent from Dhingra and Taylor. Guidance is expected to suggest ‘further easing’ but with limited ‘pace’ and ‘extent’. Focus will be on the divided Committee’s individual views in the minutes, likely reaffirming the hawkish stance despite softer CPI data and higher unemployment. The annual economic review indicates minimal slack, and wage disinflation doubts remain with pay settlements around 3.5%. Natural gas price spikes and exchange rate buoyancy may feature in discussions but have limited immediate impact on forecasts. Market outlook will hinge on labour market trends, with expectations for the next rate cut likely targeting April.
Thursday’s ECB meeting is unlikely to bring surprises, as no rate changes are expected, and recent commentary supports this outlook. The meeting will provide updates on macro and market developments since December, outlining risks for the year. Inflation remains subdued, with January headline inflation at 1.7% y/y and core inflation dipping to 2.2%. Growth is slightly ahead of expectations, supported by fiscal measures and eased monetary policy, but not enough to alter rate forecasts. Global uncertainties will likely be discussed during the press conference. EUR/USD has eased from its recent peak above 1.2000; concerns over a "strong" euro are overstated as the currency aligns with its long-run average, reflecting improved fundamentals.
Overnight Headlines
BoE Policy Decision Seen On Hold, Messaging and Projections In Focus
Fed’s Cook Says Central Bank Must Maintain Inflation Credibility
US, Iran Agree To Discuss Nuclear Issues Friday In Oman
Oil Fund Posts Largest Inflow Since 2020 As Iran Risk Simmers
Zelenskiy Asks Trump For More Arms To Force Putin To End The War
Australia Trade Bal Rises Less Than Expected In Dec As Exports Lag
TSMC Plans $17B Investment In 3nm Chip Production In Japan
Google Parent Alphabet Forecasts Sharp Surge In 2026 CapEX
Sony Hikes Profit Outlook After Resilient Holiday-Quarter Sales
Arm Holdings Shares Fall As Licensing Sales Miss Estimates
Meta Memo Says New Avocado Model ‘Most Capable’ To Date
Stellantis, VW Dial Up Pressure On EU To Defend Auto Industry
Canada To Scrap Electric Vehicle Rules In Win For Automakers
Chinese Provinces Set Lower Growth Targets For 2026
Xi Reasserts Taiwan Stance In Call With Trump, US Pushes Trade
UK PM Premiership In Crisis After Day Of Drama In Parliament
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)
EUR/USD: 1.1725-35 (2BLN), 1.1800 (2.3BLN), 1.1825-30 (1.7BLN)
1.1835-40 (550M), 1.1875-80 (785M), 1.1900 (373M). USD/CHF: 0.7750 (285M)
EUR/GBP: 0.8650 (573M), 0.8700 (226M)
GBP/USD:1.3490-1.3500 (797M), 1.3650 (157M), 1.3705 (230M)
AUD/USD: 0.6950 (426M), 0.7000 (501M), 0.7035-45 (348M)
NZD/USD: 0.5910 (400M)
CAD: 1.3630 (196M), 1.3640-50 (467M), 1.3675 (550M), 1.3790-1.3800 (530M)
USD/JPY: 156.00 (926M), 156.15-25 (685M), 158.00-15 (630M), 158.50 (980M)
EUR/JPY: 185.65 (390M). AUD/JPY: 105.50 (600M)
CFTC Positions as of January 30th:
.Equity fund speculators have increased their net short position in the S&P 500 CME by 20,307 contracts, bringing the total to 420,688. Meanwhile, equity fund managers have raised their net long position in the S&P 500 CME by 27,365 contracts, resulting in a total of 909,993 contracts.
Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 45,473 contracts, now totaling 2,091,046. Conversely, they have increased their net short position in CBOT US 10-year Treasury futures by 70,511 contracts, reaching 726,151 contracts. There has also been a reduction in the net short position for CBOT US 2-year Treasury futures by 6,123 contracts, now at 1,218,999. Furthermore, speculators have boosted the net short position in CBOT US UltraBond Treasury futures by 14,649 contracts, bringing it to 273,471. They have trimmed their net short position in CBOT US Treasury bonds futures by 14,903 contracts, which now stands at 8,167.
Bitcoin's net long position is recorded at 690 contracts. The Swiss franc has a net short position of -42,893 contracts, while the British pound shows a net short position of -16,162 contracts. The euro has a net long position of 132,134 contracts, and the Japanese yen has a net short position of -33,933 contracts.
Technical & Trade Views
SP500
Daily VWAP Beraish
Weekly VWAP Bearish
Above 6950 Target 7050
Below 6835 Target 6785
EURUSD
Daily VWAP Bearish
Weekly VWAP Bullish
Above 1.1950 Target 1.2150
Below 1.1840 Target 1.1750
GBPUSD
Daily VWAP Bearish
Weekly VWAP Bullish
Above 1.38 Target 13950
Below 1.3770 Target 1.3570
USDJPY
Daily VWAP Bullish
Weekly VWAP Bearish
Above 154.35 Target 157.50
Below 153.50 Target 151
XAUUSD
Daily VWAP Bearish
Weekly VWAP Bullish
Above 4850 Target 5100
Below 4400 Target 4200
BTCUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 76.5k Target 80.5k
Below 76k Target 62k
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Past performance is not indicative of future results.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!