The eurozone current account seasonally adjusted balance was €14.6bn in December. This was above the forecast of €9.2bn.
The stronger-than-expected current account surplus from back in December 2025 gives us a bullish signal for the Euro. Coming in at €14.6 billion against a €9.2 billion forecast, it suggests the Eurozone’s export machine was running hotter than anticipated at the end of last year. This underlying strength should be a key factor in our currency positioning.
This view is reinforced by the latest manufacturing PMI data for January 2026, which showed a surprise expansion at 51.2, beating forecasts of a 49.8 contraction. This confirms the export strength we saw in December is carrying over into the new year. With core inflation also proving sticky at 2.6%, the case for a stronger Euro is building.
We should therefore consider buying call options on the Euro, specifically against the US dollar (EUR/USD), for the coming weeks. The unexpected economic resilience suggests the market may have been too pessimistic on the Euro’s prospects following the slowdown we observed in the third quarter of 2025. Look for options with expiry dates in March or April 2026 to capture this potential upward move.
This strength in the export sector also makes us bullish on European equities, particularly German and French names sensitive to global trade. We can express this view by buying futures or call options on the Euro Stoxx 50 index. Historically, periods of strong export performance, like we saw in the recovery phase of 2021, have directly led to rallies in these export-heavy indices.
The data also forces us to rethink expectations for the European Central Bank’s policy path. Any market pricing for imminent rate cuts now looks overly dovish and likely to be unwound. We should adjust interest rate derivative positions, as short-term rates like Euribor may now find a floor or even drift higher in the near term.
