Pips for Breakfast: February 20, 2026

Japan's inflation just dipped to 1.5%, which means the Bank of Japan's dreams of a normal interest rate environment are currently on life support.

On This Day

In 2020, equity markets hit all-time highs and everyone thought the year was going to be great for international travel. Forex traders spent the day arguing about swap rates, blissfully unaware that the world was about to go into a multi-year timeout.

The Play

The big ticket today is USD Advance GDP. If it hits the 3.0% forecast, the "higher for longer" narrative for the Fed isn't just a theory, it's a personality trait. Watch GBP/USD during the London session. Between Retail Sales and a heavy dose of Flash PMIs, Cable is going to be twitchy. If the UK data misses while US GDP beats, a Friday slide toward 1.2500 is the path of least resistance. Be careful with those 5pm EST closes. Liquidity tends to vanish, and spreads like to widen right when you're trying to sneak out for a drink.

What's on Deck

GBP Retail Sales (02:00 UTC): Forecast is 0.2%. If this comes in negative, the Pound might lose its footing before the PMIs even arrive.

Eurozone Flash PMIs (03:15 - 03:30 UTC): Keep a close eye on German Manufacturing. It's been hovering in the "sad" zone (under 50) for a while. A beat here could give EUR/USD a temporary reprieve.

UK Flash PMIs (04:30 UTC): Services are the engine here. A drop below 53.0 would suggest the UK consumer is finally feeling the pinch.

CAD Retail Sales (08:30 UTC): Expectations are low at -0.5%. If the Loonie survives this, it's only because the US GDP data is overshadowing it.

USD Advance GDP (08:30 UTC): The heavyweight champion of the day. A 3.0% print confirms the US economy is still the cleanest shirt in the dirty laundry basket.

The Data Behind the Patterns View Packages →

Quick Pips

USD/JPY: Inflation slowing to 1.5% gives the BoJ every excuse to stay boring. Prime Minister Takaichi is talking about fiscal sustainability, which is politician-speak for "we have a lot of debt and no easy way to fix it."

AUD/USD: The Aussie and Kiwi are nursing wounds from the Asia-Pacific session. Commodity currencies are struggling to find friends as global growth concerns linger.

USD/CAD: With Canadian retail sales expected to be soft, the Loonie is looking vulnerable. If US GDP knocks it out of the park, parity with the greenback is going to feel even further away.

Why Your P&L Cares

This week has been a masterclass in USD resilience. We saw the Yen try to rally on fiscal talk, only to get slapped down by cooling inflation data. It's a classic February theme. Trends that started in January often see a mid-month "vibe check" where markets question if they've gone too far.

Historically, this is the time of year when the "carry trade" gets tested. If US growth looks unstoppable today, the dollar stays king. If the GDP number misses, expect a violent "it's Friday and I want my profits" reversal across the board.

The Bottom Line

It's the final stretch. This week has been a grind, but the GDP print is the final boss. Once the 5pm EST bell rings, the shop is closed. Don't be the person holding a massive unhedged position over a weekend when geopolitical headlines love to drop.

Next week, we get the RBNZ interest rate decision and some heavy-hitting US inflation data to keep things spicy. For now, tighten those stops and get ready for the GDP volatility.

Have a profitable close and a restful weekend. You're fed.