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• There’s a study coming out on tariffs on April 1st.
• Trump will decide what to do about tariffs after that.
• Discussed next stage of house reconciliation package.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Tariff Confusion Leaves Markets Guessing: March 4th vs. April 2nd?

Traders and investors are bracing for uncertainty as conflicting signals from the White House fuel speculation about whether the 25% tariffs on Mexico and Canada will take effect as scheduled on March 4th, or if they will be pushed to April 2nd.

During recent remarks, President Trump repeatedly referenced April 2nd as an important date when asked about the tariff situation. However, Commerce Secretary Howard Mutnick later clarified that the existing pause on tariffs for Canada and Mexico remains in place, adding to the confusion.

The key issue? No executive order has been issued to officially delay the tariffs, meaning that—as of now—they are still set to take effect next Tuesday, March 4th unless the administration takes affirmative action to extend the pause.

Market Reaction: Peso Volatility and Trader Uncertainty

The Mexican peso (USD/MXN) is already reacting, with traders pricing in the possibility of a delay. The currency has been hovering around key resistance at 20.42, just below the 2019-2020 high of 20.91.

If the March 4th deadline passes without action, we could see significant moves:

• If tariffs are imposed → Expect a sharp peso selloff, pushing USD/MXN higher toward resistance levels and likely above the 20.96 mark, the two year high of years 2019 and 2020..
• If a delay is confirmed → Peso could strengthen as traders unwind risk-off positions. Expect USD/MXN to decline.
• Naturally, there are additional factors to weigh in but keep an eye of what Trump will really do… The market is now confused about that.

This policy uncertainty leaves businesses, investors, and traders in limbo. With less than a week until the March 4th deadline, markets are preparing for a volatile start to next week—but all eyes remain on whether an official announcement from the White House clarifies the situation.

For now, the tariffs are still set to take effect—until the administration says otherwise.

This article was written by Itai Levitan at www.forexlive.com.

• Disinflationary process was well on track.
• Inflation was still expected to remain above target in the near term.
• Confidence in a timely and sutained convergence had increased.
• High levels of uncertainty, lingering upside risks to energy and food prices, a strong labour market and high negotiated wage increases called for caution.
• Potential future actions by the US Administration that might lead to a global economic slowdown.
• Oil and gas prices up to now did not suggest a major change to the baseline in the staff projections.
• It was relatively safe to make the assessment that monetary policy was still restrictive.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Headlines:

• The bond market moves to test another key level
• Gold down on the day, poised to snap weekly win streak
• Weekly update on interest rate expectations
• Spain February preliminary CPI +3.0% vs +3.0% y/y expected
• Switzerland Q4 GDP +0.2% vs +0.2% q/q expected
• Eurozone January M3 money supply +3.6% vs +3.8% y/y expected
• Eurozone February final consumer confidence -13.6 vs -13.6 prelim
• Japan’s new births fell again in 2024 for a ninth straight year
• China’s annual parliament, the “Two Sessions,” starts next week

Markets:

• USD and CAD lead, JPY lags on the day
• European equities lower; S&P 500 futures up 0.6%
• US 10-year yields up 5.5 bps to 4.303%
• Gold down 1.0% to $2,887.82
• WTI crude up 1.1% to $69.35
• Bitcoin up 2.3% to $86,465

We’re still in that month-end trading phase and it’s tough to scrutinise too much into the early day market moves amid the lack of headlines.

The dollar is keeping steadier across the board, with USD/JPY in particular leading the way in a push to 149.50-70 levels during the session. That is helped by a rebound in Treasury yields, with 10-year yields climbing back to 4.30% after testing its 200-day moving average of 4.24% on the week.

Besides that, most other dollar pairs are little changed though USD/CHF is also seen up 0.4% to 0.8980 despite European indices pulled lower today.

The overall risk mood is a better one though, with US futures pointing higher after Nvidia’s earnings beat. The chip giant is seeing shares up around 1% in pre-market trading now, helping to ease some of the concerns for equities earlier in the week.

In other markets, gold is down by roughly 1% as it continues to struggle after the break in the technical battle lines earlier this week here. The drop sees the precious metal now fall to $2,887 and is poised to end the weekly win streak of eight weeks for gold.

Looking ahead, the weekly US initial jobless claims is one to be wary of in terms of economic data releases. Otherwise, the focus will be on month-end flows as well as more Trump headlines before the final day of the week/month tomorrow.

This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 28/2/2025 first appeared on IC Markets | Official Blog.

• Prior -14.2
• Economic confidence 96.3 vs 96.0 expected
• Prior 95.2; revised to 95.3
• Industrial confidence -11.4 vs -12.0 expected
• Prior -12.9; revised to -12.7
• Services confidence 6.2 vs 6.8 expected
• Prior 6.6; revised to 6.7

Slight delay in the release by the source. Euro area economic sentiment sticks with the bounce in February with the reading here being the highest since September. That being said, overall conditions are still mostly subdued. A weaker services reading isn’t all too encouraging, even if accompanied by a better reading in the manufacturing sector. The latter is still very much in recession territory, no thanks to Germany.

This article was written by Justin Low at www.forexlive.com.

• Prior +3.5%

The pace of broad money growth in the euro area continues to hold relatively stable, though the narrower aggregate M1 (currency in circulation and overnight deposits) did show a notable jump in growth to 2.7% in January – up from 1.8% in December.

This article was written by Justin Low at www.forexlive.com.

• Eurostoxx -0.9%
• Germany DAX -1.0%
• France CAC 40 -0.6%
• UK FTSE -0.3%
• Spain IBEX -1.0%
• Italy FTSE MIB -1.3%

This takes away a chunk of the gains from yesterday and creates a bit of a nervy situation going into the end to February trading tomorrow. Trump threatening tariffs is certainly a factor as he said that: “We’ll be announcing it (EU tariffs) very soon. It’ll be 25% generally speaking and that will be on cars and all other things.”

But the mood is somewhat helped by US futures at least keeping afloat today. S&P 500 futures are up 0.4%, Nasdaq futures up 0.4%, and Dow futures up 0.3%. Tech shares are the standout though, following Nvidia’s earnings beat overnight.

This article was written by Justin Low at www.forexlive.com.

• Prior +2.9%
• HICP +2.9% vs +2.8% y/y expected
• Prior +2.9%

The good news here is that core annual inflation is seen easing to 2.1%, down from 2.4% in January. That will fit into the ECB rate cut narrative for next month.

This article was written by Justin Low at www.forexlive.com.

• Prior was +0.4%
• GDP Y/Y +1.5% vs +1.6% expected
• Prior was +2.0%; revised to 1.9%

Growth was driven roughly equally by industry and the services sector.
On the expenditure side, both consumption and investment provided a
positive impulse.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

If anything, it’s a sign that this is a market that’s no longer that afraid – if at all – of tariff threats. A case of the boy who cried wolf perhaps. In this case being the man who cried tariffs. And with softer US economic data recently, traders are coming around to the idea that price pressures may not be that strong by the time tariffs do come to fruition. In other words, the Fed might have scope to cut rates further.

The chart above shows an interesting evolution in the market thinking and how it changed after Trump took office.

The run up in yields last October came as Trump became the favourite to win the presidential election. That was followed by another surge in December as he drummed up tariff threats and a trade war with China seemed imminent.

Fast forward to today and those threats are more words than actions. And traders are learning to sing to that tune despite Trump continuing to make headlines in the past two weeks.

The fact that we also saw Fed funds futures move to price in just one rate cut by the Fed for this year previously is also a factor keeping a lid on rates from pushing too far. And now when we’re running back the other way, it’s a double whammy for rates. Traders are now pricing in ~58 bps of rate cuts with the first one being in July.

Circling back to the 10-year yields chart above, we’ve now reached another critical point in the market pricing. A push to test the 200-day moving average (blue line) after the break of the 100-day moving average (red line) earlier this week.

If that level breaks, bond buyers will have more momentum to keep with the latest momentum. That could drive yields back to test the December low near 4.12% next.

But at this stage, a lot will hinge on more US economic data in the week(s) ahead. The non-farm payrolls release next week is going to be a major one in that regard.

In the meantime, we could be caught in a bit of a battle at this key level until traders find some catalyst to solidify their conviction. Or perhaps they may get carried away and price in another rate cut on their own volition before letting the data decide whether to bring things down a notch.

In any case, the technical backdrop above is the key thing to watch now in the bond market this week. That will determine whether the recent drive lower in yields can hold the course or be met with some pushback for now.

This article was written by Justin Low at www.forexlive.com.

If anything, it’s a sign that this is a market that’s no longer that afraid – if at all – of tariff threats. A case of the boy who cried wolf perhaps. In this case being the man who cried tariffs. And with softer US economic data recently, traders are coming around to the idea that price pressures may not be that strong by the time tariffs do come to fruition. In other words, the Fed might have scope to cut rates further.

The chart above shows an interesting evolution in the market thinking and how it changed after Trump took office.

The run up in yields last October came as Trump became the favourite to win the presidential election. That was followed by another surge in December as he drummed up tariff threats and a trade war with China seemed imminent.

Fast forward to today and those threats are more words than actions. And traders are learning to sing to that tune despite Trump continuing to make headlines in the past two weeks.

The fact that we also saw Fed funds futures move to price in just one rate cut by the Fed for this year previously is also a factor keeping a lid on rates from pushing too far. And now when we’re running back the other way, it’s a double whammy for rates. Traders are now pricing in ~58 bps of rate cuts with the first one being in July.

Circling back to the 10-year yields chart above, we’ve now reached another critical point in the market pricing. A push to test the 200-day moving average (blue line) after the break of the 100-day moving average (red line) earlier this week.

If that level breaks, bond buyers will have more momentum to keep with the latest momentum. That could drive yields back to test the December low near 4.12% next.

But at this stage, a lot will hinge on more US economic data in the week(s) ahead. The non-farm payrolls release next week is going to be a major one in that regard.

In the meantime, we could be caught in a bit of a battle at this key level until traders find some catalyst to solidify their conviction. Or perhaps they may get carried away and price in another rate cut on their own volition before letting the data decide whether to bring things down a notch.

In any case, the technical backdrop above is the key thing to watch now in the bond market this week. That will determine whether the recent drive lower in yields can hold the course or be met with some pushback for now.

This article was written by Justin Low at www.forexlive.com.