Markets extended a rotation out of technology shares on Wednesday as disappointingly weak U.S. employment data raised questions about economic momentum heading into the final stretch of winter, while European inflation coming in below forecasts added to cross-border policy divergence themes.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
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New Zealand Employment Change for December 31, 2025: 0.5% q/q (0.2% q/q forecast; 0.0% q/q previous)
- New Zealand Unemployment Rate for December 31, 2025: 5.4% (5.3% forecast; 5.3% previous)
- Australia AIG Manufacturing Index for January 2026: -19.4 (-17.0 forecast; -18.0 previous)
- Australia S&P Global Services PMI Final for January 2026: 56.3 (56.0 forecast; 51.1 previous)
- New Zealand Global Dairy Trade Price Index for February 3, 2026: 6.7% (1.5% previous)
- Japan S&P Global Services PMI Final for January 2026: 53.7 (53.4 forecast; 51.6 previous)
- China RatingDog Services PMI for January 2026: 52.3 (51.5 forecast; 52.0 previous)
- Euro area HCOB Services PMI Final for January 2026: 51.6 (51.9 forecast; 52.4 previous)
- Germany HCOB Services PMI Final for January 2026: 52.4 (53.3 forecast; 52.7 previous)
- U.K. S&P Global Services PMI Final for January 2026: 54.0 (54.3 forecast; 51.4 previous)
- Euro area CPI Growth Rate Flash for January 2026: -0.5% m/m (-0.4% m/m forecast; 0.2% m/m previous); 1.7% y/y (1.8% y/y forecast; 1.9% y/y previous)
- Euro area PPI for December 2025: -0.3% m/m (0.2% m/m forecast; 0.5% m/m previous); -2.1% y/y (-2.0% y/y forecast; -1.7% y/y previous)
- U.S. MBA Mortgage Applications for January 30, 2026: -8.9% (-8.5% previous)
- U.S. MBA 30-Year Mortgage Rate for January 30, 2026: 6.21% (6.24% previous)
- ADP National Employment Report for January 2026: 22.0k (35.0k forecast; 41.0k previous)
- Canada S&P Global Services PMI for January 2026: 45.8 (47.0 forecast; 46.5 previous)
- U.S. S&P Global Services PMI Final for January 2026: 52.7 (52.5 forecast; 52.5 previous)
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U.S. ISM Services PMI for January 2026: 53.8 (54.3 forecast; 54.4 previous)
- U.S. ISM Services Employment for January 2026: 50.3 (52.0 forecast; 52.0 previous)
- U.S. ISM Services Prices for January 2026: 66.6 (64.0 forecast; 64.3 previous)
- U.S. EIA Crude Oil Stocks Change for January 30, 2026: -3.46M (-2.3M previous)
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Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay – Chart Faster With TradingView
Wednesday’s session delivered a complex story of sector rotation and data disappointment as traders navigated weak employment figures against a backdrop of persistent technology sector pressure and cooling inflation across the Atlantic.
The S&P 500 declined 0.2% to close around 6,899, marking its fourth consecutive session of losses as the index struggled to hold gains amid heavy selling in software and chipmaker stocks. The index’s weakness was concentrated in technology, with the Nasdaq 100 dropping 1.4% to its lowest level since mid-December after breaching its 100-day moving average. Advanced Micro Devices plunged 16% following an underwhelming outlook for the first quarter despite beating earnings estimates, highlighting elevated expectations in the artificial intelligence chip space. Software companies faced renewed selling pressure as concerns about AI disruption continued to weigh on traditional software business models.
The technology selloff reflected an ongoing momentum trade unwind, with a Goldman Sachs basket tracking high-beta momentum strategies tumbling 10% on the day. An equal-weighted version of the S&P 500 climbed 1%, underscoring the market’s shift toward broader participation and away from the concentrated mega-cap technology leadership that dominated recent years. Value stocks outperformed growth by the widest margin since 2022 as investors rotated into companies expected to benefit from improving economic fundamentals rather than lofty growth projections.
Bitcoin tumbled 3.5% to settle near $73,254, extending recent weakness as the cryptocurrency continued to underperform traditional risk assets. The digital asset’s decline likely reflected profit-taking after recent gains and ongoing uncertainty about regulatory developments.
WTI crude oil rallied 1.1% to close around $64.18 per barrel as traders parsed conflicting reports on the status of nuclear talks between the U.S. and Iran. The advance came despite earlier reports suggesting the negotiations had hit a snag, with prices recovering as it appeared diplomatic efforts remained on track. The EIA crude oil inventory report showed a drawdown of 3.46 million barrels, larger than the previous week’s decline, providing additional support for prices.
Gold edged 0.2% higher to trade near $4,947, with the precious metal benefiting from safe-haven demand as equity markets weakened and geopolitical tensions persisted. The modest gain suggested cautious positioning ahead of Thursday’s slate of central bank decisions from the Bank of England and European Central Bank.
Treasury yields advanced slightly, with the 10-year yield rising 0.2% to approximately 4.285%. The muted reaction to the weak employment data likely reflected trader focus on the upcoming Friday jobs report, which should provide clearer signals about labor market trends following government shutdown distortions in previous months.
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FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Majors – Chart Faster with TradingView
The U.S. dollar experienced a volatile trading day on Wednesday, ultimately emerging as the best performing major currency despite session-to-session directional shifts that reflected changing risk sentiment and economic data flows.
During the Asian session, the dollar traded mixed and choppy with a net bearish lean heading into the London session. New Zealand employment data showed a modest uptick in job growth but also revealed a slight increase in the unemployment rate to 5.4%, while Australian services PMI data came in stronger than expected. The greenback’s early weakness possibly reflected counter currency strength and overnight positioning adjustments/caution ahead of the day’s heavy data schedule.
The London session brought a reversal as the dollar rebounded against major currencies on net, then pulled back slightly heading into the U.S. session. Euro area flash CPI data showed inflation slowing more than anticipated to 1.7% year-over-year, the lowest reading in several months and the first sub-2% print since mid-2025. The euro weakened on the softer inflation data as traders recalibrated expectations for ECB policy, though the dollar’s gains may have been tempered by its own domestic headwinds. European services PMI readings came in mixed, with some economies showing continued weakness in manufacturing alongside resilient services sectors.
During the U.S. session, the ADP report’s sharp miss briefly pulled the greenback down, but the slightly softer expansionary ISM Services reading brought the bulls roaring back around the 10:00 AM ET. This outcome combined with broad risk-aversion flows as U.S. equities sold off sharply was the likely driver for late session strength, enough for the U.S. dollar to close the day as the performing major currency on the session.
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Upcoming Potential Catalysts on the Economic Calendar
- Australia Balance of Trade for December 2025 at 12:30 am GMT
- Germany Factory Orders for December 2025 at 7:00 am GMT
- France Industrial Production for December 2025 at 7:45 am GMT
- Euro area HCOB Construction PMI for January 2026 at 8:30 am GMT
- U.K. New Car Sales for January 2026 at 9:00 am GMT
- S&P Global U.K. Construction PMI for January 2026 at 9:30 am GMT
- Euro area Retail Sales for December 2025 at 10:00 am GMT
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Bank of England Official Bank Rate for February 5, 2026 at 12:00 pm GMT
- MPC Meeting Minutes at 12:00 pm GMT
- BoE Monetary Policy Report at 12:00 pm GMT
- U.S. Challenger Job Cuts for January 2026 at 12:30 pm GMT
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European Central Bank Interest Rate Decision for February 5, 2026 at 1:15 pm GMT
- ECB Press Conference at 1:45 pm GMT
- U.S. Initial Jobless Claims for January 31, 2026 at 1:30 pm GMT
- ECB President Lagarde Speech at 3:15 pm GMT
- U.S. Fed Bostic Speech at 3:50 pm GMT
- U.S. Fed Balance Sheet for February 4, 2026 at 9:30 pm GMT
Thursday’s calendar presents significant volatility potential with simultaneous monetary policy decisions from the Bank of England and European Central Bank. Following Wednesday’s softer-than-expected euro area inflation data showing a return to below-target readings, markets will scrutinize ECB President Lagarde’s press conference for signals about the policy outlook. The central bank is widely expected to hold rates steady, but commentary about the pace and extent of future adjustments could move currency and bond markets significantly.
The Bank of England decision arrives against a backdrop of persistent inflation concerns in services and wage growth, though recent data showed some moderation. Markets will parse the MPC vote split and accompanying policy report for clues about the timing of potential rate cuts later in 2026.
In the U.S. session, weekly initial jobless claims data will provide another read on labor market conditions following Wednesday’s disappointing ADP report. With the government shutdown distortions now behind us, Thursday’s claims data should offer cleaner signals about the trend in layoffs and hiring. Any material deviation from expectations could spark volatility ahead of Friday’s comprehensive employment report, which remains the week’s most significant data point for Fed policy expectations.
Stay frosty out there, forex friends!
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