It was a difficult week across international markets: Hang Seng closing at 25,757.29 (-2.08%), ASX 200 closing at 8,851.00 (-3.80%), Nikkei 225 closing at 55,620.84 (-4.06%), DAX closing at 23,591.03 (-4.47%), CAC 40 closing at 7,993.49 (-4.90%), MSCI EM closing at 57.32 (-5.71%), FTSE 100 closing at 10,284.80 (-5.74%), Euro Stoxx 50 closing at 5,719.90 (-6.03%). European indices underperformed on average (-5.29%); Asia-Pacific lagged (-3.31% average); Emerging Markets (MSCI EM) moved -5.71%.

The biggest loser on the FX front was the Swiss Franc, falling 1.43% against the dollar — a headwind for unhedged holdings in that currency. The Swiss Franc is typically a safe-haven currency; its weakness against the dollar this week suggests broad USD strength rather than a classic risk-off flight, since true safe-haven demand would normally lift the Franc. Elsewhere: the British Pound lost 0.37%; the Japanese Yen lost 0.58% (Yen weakness keeping carry trades in play); the Australian Dollar lost 0.66% (AUD softness echoing China demand caution); the Euro lost 1.29% (Euro slide a headwind for unhedged EFA/FEZ holders).

Bank of Japan policy was the central story this week. The BOJ sits in a uniquely difficult position — the last major central bank still running near-zero rates, its every signal scrutinised for signs of normalisation. A hawkish lean strengthens the Yen and compresses returns for Japan exporters (a large share of the Nikkei), but boosts dollar-based ETF returns on unhedged Japan exposure. A dovish hold keeps the carry trade alive — cheap Yen borrowed to fund higher-yielding assets elsewhere — but that trade unwinds fast when BOJ surprises to the hawkish side, rippling into EM and risk assets globally.

On the data front: Germany Ifo Business Climate (February) beat at 88.6 vs. 88.4 expected. German business confidence ticking up is a tentative positive for European equities — but the index needs to sustain a move higher before it signals a genuine recovery in Europe's largest economy.

Next week's international calendar is active. The ECB rate decision is the marquee event — markets will parse every word of the statement and press conference for signals on the pace of cuts. A cut flags the ECB is prioritising growth over inflation vigilance, lifting European equities (EFA, FEZ) but likely weakening the Euro — a headwind for unhedged holders. A hold keeps EUR supported but pushes out the rate-cut tailwind for rate-sensitive sectors. Central bank decisions in particular can drive sharp simultaneous moves in equities, bonds, and currencies — size positions before the announcement, not after. Secondary releases to monitor: Japan GDP Final (Q4 2025, QoQ), China CPI (February, YoY).

It was a rough week for international markets. The best performer was Hang Seng (Asia-Pacific) at -2.1%, while Euro Stoxx 50 (Europe) was the weakest at -6.0%. European stocks slipped (-5.3% on average), dragged by ongoing weakness in the region's largest economies; Asia-Pacific declined (-3.3% average) — a soft week for the region; Emerging markets (MSCI EM) fell -5.7% — a cautious week for EM exposure.

Bank of Japan policy was the central story. BOJ signals drove Yen moves, which ripple through Japan ETF returns for dollar-based investors. the Swiss Franc weakened 1.4% against the dollar — a headwind for unhedged holdings in that currency.

Germany's Ifo Business Climate ticked up to 88.6 — a tentative sign Europe's largest economy may be stabilising. Not a recovery, but the direction is improving. The Bank of Japan's minutes showed growing internal debate about raising rates further. If the BOJ does hike, the Yen typically strengthens — good for dollar-based Japan investors, but exporters (a large chunk of Japan's market) can suffer. Eurozone inflation came in as expected at 1.7%. Inflation is on a cooling trend, giving the ECB room to cut rates later in the year — a quiet positive for European bonds and dividend-paying sectors.

ECB Interest Rate Decision is the key event next week. A cut signals the ECB is prioritising growth — positive for European equities (EFA, FEZ) but may weaken the Euro, creating a currency headwind for unhedged holders. A hold keeps EUR supported but delays the rate-cut tailwind for rate-sensitive sectors. Size positions before the announcement, not after.