The Netherlands’ seasonally adjusted unemployment rate over a three-month period rose to 4.1% in February. It had been 4.0% in the previous period.
Looking back at the data from February 2025, the rise in Dutch unemployment to 4.1% was an early indicator of a softening labor market that we saw play out over the following year. At the time, this small increase was a signal that suggested potential headwinds for the Eurozone economy. This piece of data contributed to a shift in market expectations towards a more dovish European Central Bank throughout 2025.
Labor Market Signals And Policy Expectations
We now see that this trend did continue through mid-2025, but the latest figures for February 2026 show the Dutch unemployment rate has since improved, falling back to 3.8%. This recovery comes as recent Eurostat data shows Eurozone core inflation has cooled to 1.9%, comfortably within the ECB’s target range. The economic slowdown anticipated back then proved to be relatively mild and short-lived.
Given this recovery and the ECB’s recent shift to a neutral policy stance, traders should consider reducing hedges that were positioned for a significant economic downturn. We believe strategies like selling out-of-the-money puts on the AEX index could be favorable, as implied volatility has decreased from its late-2025 highs of over 22% to a more stable 15% today. The focus in the coming weeks should be on a stable to moderately growing European market, rather than the slowdown that the 2025 data first hinted at.
