Narrowly Mixed Dollar as Investors Await U.S. CPI Data Tomorrow
February 12, 2026
There were 227k new U.S. jobless insurance claims last week, down a bit from the last week of January but more or less aligned with what had been expected. The net takeaway from yesterday’s January jobs figures was that, excluding other policy considerations, better employment growth than seen during much of 2025 probably delays the next interest rate cut to around midyear. Unless forthcoming price data, including tomorrow’s CPI report, point to a faster-than-assumed approach of the Fed’s target, officials are unlikely to prioritize the employment mandate by jumping the gun on the next rate reduction.
In overnight financial market action through 13:30 GMT, the dollar had slid by 0.2% against the Swiss franc and 0.1% against euro and sterling, risen 0.2% relative to the yen, and was showing no net change against the Canadian and Australian currencies. (A number of officials from the Reserve Bank of Australia have made hawkish comments this week, and there was a rare Republican objection to tariff hikes that resulted in a House of Representatives vote against the administration’s declaration of a national emergency that had justified special tariff hikes against Canada). In Asian stock markets, those in South Korea and Taiwan rallied 3.1% and 1.9%, but the Hong Kong and Indian markets fell 0.9% 0.7%. Share prices in Germany and France had thus far made nice gains, and the major U.S. futures were flashing green on the screens. Bitcoin had recovered 1.1%, while silver, oil and gold prices were down 1.9%, 0.3% and 0.2%. The 10-year U.S. Treasury and British gilt yields were two basis points lower, while comparable German and Japanese yields were steady.
The National Bank of Serbia’s scheduled policy review ended with an expected decision to leave the policy interest rate benchmark unchanged at 5.75%. That’s been the level since September 2024 and lies 75 basis points beneath a prior peak of 6.5% that had been maintained from July 2023 until June 2024. Serbian CPI inflation of 2.7% now is below the central bank’s target midpoint of 3.0%, and in-target inflation is expected to be maintained this year. According to today’s statement, officials consider the current interest rate level appropriate especially in light of “heightened global uncertainty fuelled by geopolitical tensions and protectionism, which considerably affect commodity and financial markets, as well as investment and consumer confidence.” They also believe that “the ECB will probably keep its key rates on hold for a while.”
Several British data have been reported today:
- Real GDP was weak in the second half of 2025. Such posted 0.1% upticks in both the third and final quarters of the year, resulting in the lowest on-year advance in six quarter — just 1.0% in 4Q which was below the 1.3% average growth rate for all of 2025.
- Industrial production had been expected to be more or less flat in December but instead tumbled 0.9%, causing the change for the whole year to be just +0.2%. Factory output dropped 0.5% in December.
- Construction output also fell 0.5% on month and recorded a weaker-than-expected on-year drop of 0.3%.
- The house price balance index compiled by the Royal Institute of Chartered Surveyors improved to its best reading in seven months in January but was still negative at -10%.
- Britain’s merchandise trade deficit of GBP 22.72 billion in December was larger than those of GBP 23.6 billion in November and GBP 18.1 billion in December 2024.
- The combined goods and services trade deficit widened to GBP 4.34 billion in December from GBP 926 million a year earlier and to GBP 21.8 billion in 2025 from GBP 17.7 billion in 2024.
Germany’s current account surplus in December of EUR 16.1 billion was its largest in a half year. But the surplus in all of 2025 of EUR 197 billion was 20.6% smaller than the 2024 surplus. As a percentage of GDP, nevertheless and in spite of the U.S. tariffs, the surplus remain sizable at around 4.6% versus 5.8% in 2024.
Many countries reported price data this Thursday. Japanese domestic producer goods price inflation slowed to a 20-month low of 2.3% from 2.4% in December and 4.3% last April and May. Dutch consumer price inflation of 2.4% last month was at a 25-month low. In Hungary, where CPI inflation had crested at 25.7% three years ago, such printed last month at a 94-month low of 2.1%. Indian consumer price inflation in January of 2.75% was its highest in six months but within the central bank’s 2-4% target. Greek CPI inflation last month matched December’s 2.5% reading. In Lithuania, producer prices remained in deflationary territory with its most negative reading in 15 months (-3.9%).
Faced with sanctions, Russia’s current account surplus fell to $48.8 billion last year from $63.2 billion in 2024.
The U.S. federal budget deficit over the first four months of the current fiscal year total $697 billion, 17% lower than in the first third of the previous fiscal year. And just out: U.S. existing home sales plunged 8.4% last month to a 16-month low, no doubt impacted by the weather extremes afflicting many parts of the country.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: British GDP and trade deificit, India CPI, Japanese PPI, National Bank of Serbia, U.S. existing home sales
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