In case you missed it, Trump announced 25% tariffs on imported autos late yesterday. This is weighing on European auto stocks today with notable losses for Mercedes-Benz Group and BMW exceeding 5%.

Technically, we can see in the 4 hour chart below that we have a strong support zone around the 22,223 level where we can also find a trendline for confluence. Overall, the market might stay on the defensive trading into the April 2nd event but that support is something the dip-buyers will be eyeing.

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

• Eurostoxx -1.1%
• Germany DAX -1.4%
• France CAC 40 -1.1%
• UK FTSE -0.6%
• Spain IBEX -0.9%
• Italy FTSE MIB -1.3%

It’s not looking pretty as European indices are eyeing another weekly decline this month. German stocks are hit the hardest this morning as auto tariffs are weighing especially. Germany sits just behind Mexico, Japan, South Korea, and Canada in terms of value of auto imports from the US. In case you missed it: Trump slaps a 25% tariff on all cars not made in the USA

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

• US auto tariffs impact global supply chains
• It is now about delivering a decisive response from the EU
• No country can achieve prosperity through imposing additional tariffs
• We will support EU efforts to find a solution through negotiations

Well, counter-tariffs are surely to be on the way once we move past 2 April. The escalation will keep risk sentiment in check in the short-term and will also keep a lid on any euro optimism in the meantime.

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

• A rate cut pause in April should be on the table.
• Inflation risks might be on the upside.

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

Global Markets:

•  Asian Stock Markets : Nikkei down 0.93%, Shanghai Composite up 0.33%, Hang Seng up 0.93% ASX down 0.38%
• Commodities : Gold at $3067.35 (0.60%), Silver at $34.3 (0.68%), Brent Oil at $73.05 (0.5%), WTI Oil at $69.6 (0.04%)
• Rates : US 10-year yield at 4.357, UK 10-year yield at 4.7300, Germany 10-year yield at 2.7895

News & Data:

• (USD) Core Durable Goods Orders m/m 0.7%  to 0.2% expected
• (USD) Durable Goods Orders m/m 0.9% to -1.1% expected

Markets Update:

Asia-Pacific markets showed mixed performance on Thursday, following Wall Street losses as investors reacted to U.S. President Donald Trump’s decision to impose 25% tariffs on auto imports.

Japan’s Nikkei 225 dropped 1.01% in its final hour of trading, while the broader Topix index declined 0.53%. In South Korea, the Kospi fell 1.19%, and the small-cap Kosdaq slipped 1.06%.

Hong Kong’s Hang Seng Index gained 0.87%, while China’s CSI 300 edged up 0.4%. India’s Nifty 50 opened 0.42% higher, and the BSE Sensex climbed 0.48%. Meanwhile, Australia’s S&P/ASX 200 closed 0.38% lower at 7,969.

U.S. futures dipped after key Wall Street indexes posted losses overnight. The S&P 500 declined 1.12% to close at 5,712.20, while the Dow Jones Industrial Average shed 132.71 points (0.31%) to finish at 42,454.79. The Nasdaq Composite, driven by weakness in tech stocks, tumbled 2.04% to 17,899.01 as Nvidia shares plummeted nearly 6%.

Upcoming Events: 

• 12:30 PM GMT – USD Final GDP q/q
• 12:30 PM GMT – USD Unemployment Claims

The post Thursday 27th March 2025: Asia-Pacific Markets Mixed as Wall Street Slumps Amid U.S. Tariff Concerns first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 27 March 2025

What happened in the Asia session?

With no major news during this session, the dollar index (DXY) continued drifting lower as it fell toward 104.30 by midday in Asia while spot prices for gold climbed strongly. This precious metal was ascending toward $3,040/oz, inching closer to the intraday all-time high of $3,057.57/oz that was formed last Thursday.

What does it mean for the Europe & US sessions?

After increasing for three straight weeks, the EIA inventories finally registered a drawdown of 3.3M barrels of crude – notably higher than the forecast of a 1.5M draw. This latest report marked only the second draw in nine weeks, highlighting weaker demand for crude oil in the United States. Coupled with mounting concerns about tighter global supply following the U.S. threat of tariffs on nations that buy Venezuelan crude, WTI oil jumped nearly 1.7% overnight before pulling back to notch a gain of 0.9%. This benchmark briefly surged past $70 per barrel before settling around $69.70. Tailwinds continue to build for this commodity with oil prices all but certain to record its third successive week of closing in the green.

The Dollar Index (DXY)

Key news events today

GDP (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

The final reading for fourth quarter GDP in the U.S. is expected to show the economy expanding at an annual rate of 2.3% – the slowest pace of growth in three quarters. Personal consumption remained the main driver of growth while exports fell slightly less and imports declined slightly more than initially anticipated; compared to the third quarter. Meanwhile, unemployment claims have remained pretty stable over the last three weeks, averaging 222k. Lower and stable claims typically highlight a resilient labour market. The estimate of 225k for the latest reading points to another week of ‘robust’ labour market data. A strong set of macroeconomic results could provide a strong tailwind for the dollar later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 19 March 2025
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run but uncertainty around the economic outlook has increased; the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• GDP growth forecasts were revised downward for 2025 (1.7% vs. 2.1% in the December projection) while PCE inflation projections have been adjusted slightly higher for 2025, with core inflation expected to reach 2.5%, partly due to tariff-related pressures.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
• Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B while maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35B.
• The next meeting is scheduled for 6 to 7 May 2025.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

GDP (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

The final reading for fourth quarter GDP in the U.S. is expected to show the economy expanding at an annual rate of 2.3% – the slowest pace of growth in three quarters. Personal consumption remained the main driver of growth while exports fell slightly less and imports declined slightly more than initially anticipated; compared to the third quarter. Meanwhile, unemployment claims have remained pretty stable over the last three weeks, averaging 222k. Lower and stable claims typically highlight a resilient labour market. The estimate of 225k for the latest reading points to another week of ‘robust’ labour market data. A strong set of macroeconomic results could provide a strong tailwind for the dollar later today, potentially creating headwinds for gold prices.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After increasing to an annual rate of 2.5% in December 2024 and January this year, the monthly CPI eased marginally to 2.4% in February. Not only did the latest print moderate from a four-month high, it also came in lower than market forecasts of 2.5% with categories such as food; housing; and electricity all rising at a slower pace. Wednesday’s ‘soft’ inflation print sent the Aussie to fall under 0.6300, tumbling as low as 0.6279. Headwinds for this currency pair are likely to build further on Thursday.

Central Bank Notes:

• The RBA reduced the cash rate by 25 basis points to bring it down to 4.10% on 18 February, marking the first rate cut since November 2020.
• Financial conditions are restrictive, which is weighing on demand and is helping to bring down underlying inflation; growth in private demand has been subdued.
• Underlying inflation has moderated over the past three quarters with trimmed mean inflation easing to 3.2% over 2024 and it is expected to reach the 2–3% target range in early 2025, which is sooner than expected at the time of the November Statement.
• The unemployment rate declined a little in late 2024 to 4% with much of the strength in the labour market underpinned by strong employment growth, which has also bolstered household incomes.
• The announcement of tariffs between the United States and other major economies poses challenges to the global outlook but the scale and incidence of the tariffs and their effects remain highly uncertain – which may itself delay some investment until the outlook becomes clearer.
• Economic activity strengthened in China but growth there is still facing structural headwinds while domestic economic growth is forecast to pick up and the labour market is forecast to remain tight.
• If the cash rate follows the market path, underlying inflation is projected to be a little above 2.5% over most of the forecast period. The anticipated recovery of GDP growth and lingering tightness in labour market conditions are expected to sustain some upward pressure on inflation.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 1 April 2025.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Increased demand for the greenback drove the Kiwi to an overnight low of 0.5712. This currency pair edged slightly higher at the beginning of Thursday’s Asia session but overhead pressures remain.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 3.75% on 19 February, marking the fourth consecutive rate cut.
• The Committee assessed that annual consumer price inflation remains near the midpoint of the MPC’s 1 to 3% target band; inflation expectations are at target and core inflation continues to fall towards the target mid-point.
• Economic activity in New Zealand remains subdued and with spare productive capacity, domestic inflation pressures continue to ease. Price and wage-setting behaviours are adapting to a low-inflation environment while the price of imports has fallen, also contributing to lower headline inflation.
• Economic growth is expected to recover during 2025 as lower interest rates will encourage spending, although elevated global economic uncertainty is expected to weigh on business investment decisions. Higher prices for some key commodities and a lower exchange rate will increase export revenues and employment growth is expected to pick up in the second half of the year as the domestic economy recovers.
• Global economic growth is expected to remain subdued in the near term as geopolitics, including uncertainty about trade barriers, is likely to weaken global growth. Global economic activity is also likely to remain fragile over the medium term given increasing geoeconomic fragmentation.
• Consumer price inflation is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices. Nevertheless, the Committee is well placed to maintain price stability over the medium term.
• The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR. If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025.
• The next meeting is on 9 April 2025.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Overhead pressures for the yen remained firmly intact this week as USD/JPY rose 1% at its highest point on Tuesday. This currency pair remained elevated on Wednesday, hitting an overnight high of 150.74 before pulling back as Asian markets came online on Thursday, sliding toward the 150 level.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 March, by a unanimous vote, to maintain the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will continue its plan to reduce the amount of its monthly outright purchases of JGBs, aiming to reach about 3 trillion yen by January-March 2026.
• Japan’s economy has continued to recover moderately, with some sectors showing improvement. Exports and industrial production have remained relatively stable, while corporate profits continue on an improving trend and business sentiment maintains a favourable level.
• The employment and income situation has shown moderate improvement, with private consumption on a moderately increasing trend despite ongoing impacts from price rises.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 3.0-3.5% recently. Services prices continue to rise moderately, reflecting factors such as wage increases, while the effects of cost pass-through from past import price rises have diminished.
• Inflation expectations have continued to rise moderately, with underlying CPI inflation gradually increasing toward the price stability target of 2%. The virtuous cycle between wages and prices continues to strengthen, with businesses increasingly reflecting higher costs in selling prices.
• Japan’s economy is expected to maintain growth above its potential rate, supported by moderately growing overseas economies and the intensifying virtuous cycle from income to spending, underpinned by accommodative financial conditions.
• The next meeting is scheduled for 19 June 2025.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Demand for the euro has fizzled out since the middle of last week as it reversed from its highs of 1.0950 to shed over 2% at its lowest point on Wednesday. This currency pair dipped as low as 1.0732 before reversing to edge higher toward 1.0770 at the beginning of Thursday’s Asia session.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 6 March to mark the fifth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.65%, 2.90% and 2.50% respectively.
• The Council acknowledged that monetary policy was becoming meaningfully less restrictive, easing borrowing costs for businesses and households with inflation projected to average 2.3% in 2025, 1.9% in 2026, and 2.0% in 2027, while core inflation also neared the 2% target.
• Although domestic inflation remains elevated due to delayed wage and price adjustments, wage growth is moderating.
• Economic growth forecasts were revised downward to 0.9% for 2025 and 1.2% for 2026, reflecting weak exports and investment.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The ECB remains data-dependent and will adjust its policy as needed to ensure inflation stabilizes around its 2% medium-term target without committing to a specific rate path.
• The next meeting is on 17 April 2025.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

With demand for the franc and the greenback seemingly at equilibrium since last Thursday, USD/CHF has ranged sideways as it hovered above 0.8800 while running into headwinds at 0.8850 thus far. This currency pair looks set to extend this ‘neutral’ bias as the trading week comes to a close.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.50% to 0.25% on 20 March 2025, marking the fifth consecutive reduction.
• Underlying inflationary pressure has decreased further this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected, decreasing from 0.7% in November to 0.3% in February, primarily due to lower electricity prices.
• In the shorter term, the new conditional inflation forecast is slightly higher than December: 0.3% for Q2 2025, 0.4% for 2025 overall, and 0.8% for 2026 and 2027, based on the assumption that the SNB policy rate remains at 0.25% over the entire forecast horizon.
• GDP growth in Switzerland remains moderate, with the services sector continuing to show slightly stronger growth, while manufacturing faces challenges.
• The SNB anticipates GDP growth of around 1.0% to 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 19 June 2025.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

On Wednesday, consumer inflation in the U.K. moderated lower in February, with headline CPI easing from an annual rate of 3.0% in the previous month to 2.8% while the core eased from 3.7% to 3.5%. Although inflation continues to remain above the Bank of England’s (BoE) target of 2%, the latest print points to some signs of abating price pressures. The largest downward contribution came from prices of clothing which declined for the first time since October 2021, recreation and culture as well as in housing and utilities. The pound fell under 1.2900 to drop as low as 1.2870 before stabilizing around 1.2890 as Asian markets came online.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain the Bank Rate at 4.50% on 19 March 2025, while one member preferred to reduce it by 25 basis points (bps).
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation increased to 3.0% in January from 2.5% in December, slightly higher than expected in the February Report; domestic price and wage pressures are moderating, but remain somewhat elevated.
• Although global energy prices have fallen back recently, they remain higher than last year and CPI inflation is still projected to rise to around 3.75% in 2025 Q3. While CPI inflation is expected to fall back thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• While UK GDP growth estimates have been slightly stronger than expected at the time of the February Monetary Policy Report, business survey indicators generally continue to suggest weakness in growth and particularly in employment intentions. In recent quarters, subdued activity has been judged to reflect both demand and supply factors.
• The labour market had continued to ease, although it was still judged to be broadly in balance – some indicators of employment intentions had deteriorated markedly, to levels consistent with shrinking employment while other indicators, such as the number of vacancies, had not weakened to the same extent.
• Domestic price and wage pressures were moderating, but remained somewhat elevated. A range of indicators suggested that underlying pay growth had eased further in recent months, although annual growth in private sector regular average weekly earnings had picked up to 6.1% in the three months to January.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Demand for the Loonie initially increased on Wednesday causing USD/CAD to dip under 1.4250. This currency pair made an overnight low of 1.4235 before reversing sharply to momentarily surge past 1.4300.  The Loonie continues to face higher-than-usual volatility due to the ongoing trade policy uncertainties between the U.S. and Canada as well as the sudden surge in crude oil prices – Canada is one of the largest non-OPEC+ producing nations.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 2.75% on 12 March; this marked the seventh consecutive meeting where rates were reduced.
• The bank announced its plan to complete the normalization of its balance sheet, ending quantitative tightening, and will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy.
• The Governing Council noted that the economy grew more than expected in the fourth quarter of last year, spurred by past rate cuts but growth is now expected to slow at the turn of the year due to increasing trade conflict with the United States.
• Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.
• Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.
• While economic growth has come in stronger than expected, the pervasive uncertainty created by continuously changing U.S. tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest.
• While monetary policy cannot offset the impacts of a trade war, the Governing Council will carefully assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.
• The Council will also be closely monitoring inflation expectations and is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 16 April 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

After increasing for three straight weeks, the EIA inventories finally registered a drawdown of 3.3M barrels of crude – notably higher than the forecast of a 1.5M draw. This latest report marked only the second draw in nine weeks, highlighting weaker demand for crude oil in the United States. Coupled with mounting concerns about tighter global supply following the U.S. threat of tariffs on nations that buy Venezuelan crude, WTI oil jumped nearly 1.7% overnight before pulling back to notch a gain of 0.9%. This benchmark briefly surged past $70 per barrel before settling around $69.70. Tailwinds continue to build for this commodity with oil prices all but certain to record its third successive week of closing in the green.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 27 March 2025 first appeared on IC Markets | Official Blog.

“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!”

This will at least keep a lid on any optimism with regards to the euro heading into next week. The issue here isn’t so much so as this being just a verbal threat. It’s a case of the uncertainty presented as Trump can be erratic, so you never really know what to expect. That especially since the EU themselves are also taking a hard line in responding to tariffs.

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

• Escalate to de-escalate? Why US tariffs may be lower than feared
• Politico: EU tariffs could be as high as 20-25%
• Trump slaps a 25% tariff on all cars not made in the USA
• Recap of Trump’s 25% auto tariff on foreign-made cars starting April 2nd
• Trump has allowed a one-month tariff exemption for auto parts imports
• Trump said he may reduce tariffs on China to help facilitate TikTok US operations sale

The dollar was bid initially as Trump slapped tariffs on all foreign-made cars and light trucks not manufactured in the US. He also reaffirmed reciprocal tariffs to go into effect on 2 April and all of that weighed on market sentiment as well. But as we look towards European trading today, we are seeing calmer heads prevail – at least for now.

The dollar is lower across the board, though still in a modest position on the week. Meanwhile, S&P 500 futures are up 0.2% but it doesn’t take away from the struggle in Wall Street yesterday though. The index closed lower by 1.1%, paring back a decent chunk of the gains this week.

With regards to auto tariffs specifically, the ones hit the hardest will be automakers from Mexico, Japan, and South Korea. Canada is also near the top of the list.

So if you take that into consideration, there might be scope for Trump to dial back on the tariffs before next week’s actual implementation date. And even if not so, Trump’s tariffs implementations always tend to come with some caveats or delay of some sorts.

This time around, he’s been talking a big game about 2 April being “Liberation Day” though. So, we’ll see how much he will follow through on that.

If he does mean business, any market optimism here might be fleeting. US stocks are looking for a reprieve after four consecutive weeks of declines though. So, it may just be a temporary reprieve despite the barrage of tariff headlines this week.

For the dollar itself though, it’s a tricky one as the tariffs will continue to bite at the US economy as well in the short-term. Traders are now seeing ~62 bps of rate cuts by the Fed by year-end. That’s not too much changed from the ~60 bps at the start of the week.

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

• Daiwa cuts Tesla price target to $300, citing margin pressure and demand concerns
• Japan warns of “significant impact” from new U.S. tariffs
• European Central Bank’s Buch, de Guindos, Escrivsa, Schnabel all speak on Thursday
• China to extend stamp duty relief for offshore trading through end-2027
• Bank of England Monetary Policy Committee member Dhingra speaks on Thursday
• The USD has reversed its earlier Trump auto tariff gains, EUR/USD back above 1.0760
• Morgan Stanley revised its USD/yuan projection to 7.35 by mid-2025 (prior 7.5)
• China data: January – February Industrial profits -0.3% y/y (prior -3.3%)
• Goldman Sachs sees further upside for China stocks, but warns of near-term headwinds
• PBOC sets USD/ CNY reference rate for today at 7.1763 (vs. estimate at 7.2728)
• China’s major banks are speeding up (bad) property loan write-offs
• ICYMI – China’s life insurers could unleash powerful new gold demand
• Tokyo Exchange transport index stocks slammed lower after Trump’s new added 25% tariff
• ICYMI – Dallas Fed Energy Survey uncertainty index highest in five years
• Trump said he may reduce tariffs on China to help facilitate TikTok US operations sale
• UBS outlined three reasons to favor U.S. artificial intelligence firms over those of China
• Nomura: Retains Long JPY Bias – tariffs, BOJ, inflation
• Trump has allowed a one-month tariff exemption for auto parts imports
• Westpac sees April RBA meeting as ‘dead rubber’, still eyes May rate cut
• Recap of Trump’s 25% auto tariff on foreign-made cars starting April 2nd
• Goldman Sachs lifts gold forecast. Could get above US$4200 by end 2025 in extreme case
• The USD has risen after Trump’s announcement of 25% tariff on all autos not made in USA
• Trump slaps a 25% tariff on all cars not made in the USA
• ICYMI – Barclays slashed thier S&P 500 forecast
• ICYMI – The EU has asked for households to stockpile 72 hours of food amid war risks
• Forexlive Americas FX news wrap 26 Mar: Tariffs, inflation concerns rattle markets.USD up.
• Gamestop says it’ll raise USD1.3bn, a portion will be to buy Bitcoin
• US equity close: Sell now, wait for the news on auto tariffs later
• Trade ideas thread – Thursday, 27 March, insightful charts, technical analysis, ideas

A
summary of the measures announced by Trump:

• a
  new 25% tariff on all cars and light trucks not manufactured in the
  United States

• will
  be on top of any existing tariffs

• the
  tariffs will remain in place throughout his 4-year term

• auto
  tariffs are set to take effect on April 2nd

• tariff
  collections begin April 3rd

• the
  administration is seeking approval for a tax deduction on interest
  payments for car loans—if the vehicle is made in America

• parts
  made in America but assembled into foreign-made cars will not be
  subject to tariffs

There
are more fine details, but those above cover the main points.

The
market response was to send the US dollar a little higher after the
news hit. Soon after Globex reopened for trade and US equity index
futures traded a little lower.

Japanese
auto exporters are, of course, going to be hit hard by the new
tariffs. Auto firms on the Tokyo exchange fell heavily.

EUR/USD
traded to lows around 1.0734 but soon recovered strongly. As I post
we’ve bounced to circa 1.0780. Yen recovered also, USD/JPY hitting
highs around 150.60 before dropping back to lows arpound 150.10 and
its not too far above there as I update.

GBP,
CAD, AUD and NZD have all risen smartly against the USD too.

Gold
have been a performer too, its back above US$3030 as I post.

Apart
from the tariff announcement news and data flow have been light.

This article was written by Eamonn Sheridan at www.forexlive.com.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise toward the 1st resistance.

Pivot: 104.00
Supporting reasons: Identified as an overlap support that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 103.22
Supporting reasons: Identified as a multi-swing-low support, indicating a potential area where the price could stabilize once again.

1st resistance: 105.26
Supporting reasons: Identified as a pullback resistance, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 1.0825
Supporting reasons: Identified as a swing-high resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the downward channel and red Ichimoku Cloud add further significance to the strength of the bearish momentum.

1st support: 1.0687
Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where the price could stabilize once more.

1st resistance: 1.0885
Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise toward the 1st resistance.

Pivot: 160.93
Supporting reasons: Identified as a multi-swing-low support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 160.29
Supporting reasons: Identified as a swing-low support that aligns close to a 127.2% Fibonacci extension, indicating a potential area where the price could stabilize once again.

1st resistance: 163.01
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bullish bounce off this level to rise toward the 1st resistance.

Pivot: 0.8337
Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 0.8310
Supporting reasons: Identified as a pullback support, indicating a potential area where the price could stabilize once more.

1st resistance: 0.8377
Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is trading close to the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 1.2876

Supporting reasons: Identified as a multi-swing-low support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 1.2779
Supporting reasons: Identified as a pullback support that aligns close to a confluence of Fibonacci levels i.e. the 23.6% and 50% retracements, acting as a potential level where the price could stabilize once again.

1st resistance: 1.3009
Supporting reasons: Identified as a swing-high resistance, indicating a potential level that could cap further upward movement.

GBP/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 193.37
Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend. The presence of the green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 192.26
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 194.90
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential level that could cap further upward movement.

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.8797

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 0.8758
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 0.8866
Supporting reasons: Identified as an overlap resistance that aligns with a confluence of Fibonacci levels i.e. the 23.6% and 38.2% retracements, indicating a potential level that could cap further upward movement.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price is falling toward the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 149.48

Supporting reasons: Identified as an overlap support that aligns close to a confluence of Fibonacci levels i.e. the 38.2% and 50% retracements, indicating a potential area where buying interests could pick up to resume the uptrend. The presence of the green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 148.26
Supporting reasons: Identified as a swing-low support that aligns with a 61.8% Fibonacci retracement, suggesting a potential area where the price could stabilize once more.

1st resistance: 151.29
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price has made a bearish reversal off the pivot and could potentially fall toward the 1st support.

Pivot: 1.4312

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify. The presence of the downward channel and red Ichimoku Cloud add further significance to the strength of the bearish momentum.

1st support: 1.4237
Supporting reasons: Identified as a pullback support that aligns with a 78.6% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.4383
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 0.6327
Supporting reasons: Identified as an overlap resistance that aligns with a confluence of Fibonacci levels i.e. the 50% retracement and the 78.6% projection, indicating a potential area where selling pressures could intensify.

1st support: 0.6262

Supporting reasons: Identified as a multi-swing-low support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6355
Supporting reasons: Identified as an overlap resistance that aligns with a confluence of Fibonacci levels i.e. the 78.6% retracement and the 78.6% projection, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 0.5762

Supporting reasons: Identified as a multi-swing-high resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.5712

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 50% Fibonacci retracement, suggesting a potential area where the price could stabilize once more.

1st resistance: 0.5783

Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 42,114.80

Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 41,410.00

Supporting reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 43,012.90

Supporting reasons: Identified as a swing-high resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support.

Pivot: 22,723.90

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 22,381.49

Supporting reasons: Identified as a multi-swing-low support that aligns with a confluence of Fibonacci levels i.e. the 100% projection and the 161.8% extension, indicating a key level where the price could stabilize once more.

1st resistance: 23,185.90
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price is trading close to the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 5,710.10

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 5,603.80

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 5,843.10

Supporting reasons: Identified as a swing-high resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 85,982.89

Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 81,319.71
Supporting reasons: Identified as a swing-low support that aligns with a 61.8% Fibonacci retracement, indicating a potential level where the price could stabilize once more.

1st resistance: 92,463.38
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling toward the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 1,949.48

Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 1,832.10
Supporting reasons: Identified as a multi-swing-low support that aligns with a 78.6% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 2,132.80
Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could rise towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 70.34

Supporting reasons: Identified as a multi-swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify. 

1st support: 68.75
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 71.86
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall toward the pivot and potentially make a bullish bounce off this level to rise toward the 1st resistance.

Pivot: 2,998.31
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend. The presence of the green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 2,954.94
Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, acting as a potential level where price could stabilize once again.

1st resistance: 3,051.82
Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

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The post Thursday 27th March 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 27 March 2025

What happened in the U.S. session?

After declining in November and December of 2024, new orders for durable goods rose strongly in January of this year. Orders jumped 3.2% MoM with the rebound driven by sectors such as transportation equipment and capital goods. In a surprise twist, orders unexpectedly increased $2.7B or 0.9% MoM to $289.3B in February 2025, beating forecasts of a 1% fall. This follows an upwardly revised 3.3% jump in January with sectors such as transportation equipment leading the gains once again. The dollar index (DXY) has gained 0.5% thus far this week to make an overnight high of 104.68 on Wednesday.

What does it mean for the Asia Session?

Demand for the greenback is likely to stay robust but pullbacks for the DXY should be anticipated along the way. This index dipped under 104.50 at the beginning of this session while spot prices for gold floated above $3,000/oz. Meanwhile, crude oil prices remain buoyed by mounting concerns about tighter global supply following the U.S. threat of tariffs on nations that buy Venezuelan crude – WTI oil could make another attempt to climb above $70 per barrel as the day progresses.

The Dollar Index (DXY)

Key news events today

GDP (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

The final reading for fourth quarter GDP in the U.S. is expected to show the economy expanding at an annual rate of 2.3% – the slowest pace of growth in three quarters. Personal consumption remained the main driver of growth while exports fell slightly less and imports declined slightly more than initially anticipated; compared to the third quarter. Meanwhile, unemployment claims have remained pretty stable over the last three weeks, averaging 222k. Lower and stable claims typically highlight a resilient labour market. The estimate of 225k for the latest reading points to another week of ‘robust’ labour market data. A strong set of macroeconomic results could provide a strong tailwind for the dollar later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 19 March 2025
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run but uncertainty around the economic outlook has increased; the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• GDP growth forecasts were revised downward for 2025 (1.7% vs. 2.1% in the December projection) while PCE inflation projections have been adjusted slightly higher for 2025, with core inflation expected to reach 2.5%, partly due to tariff-related pressures.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
• Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B while maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35B.
• The next meeting is scheduled for 6 to 7 May 2025.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

GDP (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

The final reading for fourth quarter GDP in the U.S. is expected to show the economy expanding at an annual rate of 2.3% – the slowest pace of growth in three quarters. Personal consumption remained the main driver of growth while exports fell slightly less and imports declined slightly more than initially anticipated; compared to the third quarter. Meanwhile, unemployment claims have remained pretty stable over the last three weeks, averaging 222k. Lower and stable claims typically highlight a resilient labour market. The estimate of 225k for the latest reading points to another week of ‘robust’ labour market data. A strong set of macroeconomic results could provide a strong tailwind for the dollar later today, potentially creating headwinds for gold prices.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After increasing to an annual rate of 2.5% in December 2024 and January this year, the monthly CPI eased marginally to 2.4% in February. Not only did the latest print moderate from a four-month high, it also came in lower than market forecasts of 2.5% with categories such as food; housing; and electricity all rising at a slower pace. Wednesday’s ‘soft’ inflation print sent the Aussie to fall under 0.6300, tumbling as low as 0.6279. Headwinds for this currency pair are likely to build further on Thursday.

Central Bank Notes:

• The RBA reduced the cash rate by 25 basis points to bring it down to 4.10% on 18 February, marking the first rate cut since November 2020.
• Financial conditions are restrictive, which is weighing on demand and is helping to bring down underlying inflation; growth in private demand has been subdued.
• Underlying inflation has moderated over the past three quarters with trimmed mean inflation easing to 3.2% over 2024 and it is expected to reach the 2–3% target range in early 2025, which is sooner than expected at the time of the November Statement.
• The unemployment rate declined a little in late 2024 to 4% with much of the strength in the labour market underpinned by strong employment growth, which has also bolstered household incomes.
• The announcement of tariffs between the United States and other major economies poses challenges to the global outlook but the scale and incidence of the tariffs and their effects remain highly uncertain – which may itself delay some investment until the outlook becomes clearer.
• Economic activity strengthened in China but growth there is still facing structural headwinds while domestic economic growth is forecast to pick up and the labour market is forecast to remain tight.
• If the cash rate follows the market path, underlying inflation is projected to be a little above 2.5% over most of the forecast period. The anticipated recovery of GDP growth and lingering tightness in labour market conditions are expected to sustain some upward pressure on inflation.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 1 April 2025.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Increased demand for the greenback drove the Kiwi to an overnight low of 0.5712. This currency pair edged slightly higher at the beginning of Thursday’s Asia session but overhead pressures remain.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 3.75% on 19 February, marking the fourth consecutive rate cut.
• The Committee assessed that annual consumer price inflation remains near the midpoint of the MPC’s 1 to 3% target band; inflation expectations are at target and core inflation continues to fall towards the target mid-point.
• Economic activity in New Zealand remains subdued and with spare productive capacity, domestic inflation pressures continue to ease. Price and wage-setting behaviours are adapting to a low-inflation environment while the price of imports has fallen, also contributing to lower headline inflation.
• Economic growth is expected to recover during 2025 as lower interest rates will encourage spending, although elevated global economic uncertainty is expected to weigh on business investment decisions. Higher prices for some key commodities and a lower exchange rate will increase export revenues and employment growth is expected to pick up in the second half of the year as the domestic economy recovers.
• Global economic growth is expected to remain subdued in the near term as geopolitics, including uncertainty about trade barriers, is likely to weaken global growth. Global economic activity is also likely to remain fragile over the medium term given increasing geoeconomic fragmentation.
• Consumer price inflation is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices. Nevertheless, the Committee is well placed to maintain price stability over the medium term.
• The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR. If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025.
• The next meeting is on 9 April 2025.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Overhead pressures for the yen remained firmly intact this week as USD/JPY rose 1% at its highest point on Tuesday. This currency pair remained elevated on Wednesday, hitting an overnight high of 150.74 before pulling back as Asian markets came online on Thursday, sliding toward the 150 level.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 March, by a unanimous vote, to maintain the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will continue its plan to reduce the amount of its monthly outright purchases of JGBs, aiming to reach about 3 trillion yen by January-March 2026.
• Japan’s economy has continued to recover moderately, with some sectors showing improvement. Exports and industrial production have remained relatively stable, while corporate profits continue on an improving trend and business sentiment maintains a favourable level.
• The employment and income situation has shown moderate improvement, with private consumption on a moderately increasing trend despite ongoing impacts from price rises.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 3.0-3.5% recently. Services prices continue to rise moderately, reflecting factors such as wage increases, while the effects of cost pass-through from past import price rises have diminished.
• Inflation expectations have continued to rise moderately, with underlying CPI inflation gradually increasing toward the price stability target of 2%. The virtuous cycle between wages and prices continues to strengthen, with businesses increasingly reflecting higher costs in selling prices.
• Japan’s economy is expected to maintain growth above its potential rate, supported by moderately growing overseas economies and the intensifying virtuous cycle from income to spending, underpinned by accommodative financial conditions.
• The next meeting is scheduled for 19 June 2025.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Demand for the euro has fizzled out since the middle of last week as it reversed from its highs of 1.0950 to shed over 2% at its lowest point on Wednesday. This currency pair dipped as low as 1.0732 before reversing to edge higher toward 1.0770 at the beginning of Thursday’s Asia session.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 6 March to mark the fifth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.65%, 2.90% and 2.50% respectively.
• The Council acknowledged that monetary policy was becoming meaningfully less restrictive, easing borrowing costs for businesses and households with inflation projected to average 2.3% in 2025, 1.9% in 2026, and 2.0% in 2027, while core inflation also neared the 2% target.
• Although domestic inflation remains elevated due to delayed wage and price adjustments, wage growth is moderating.
• Economic growth forecasts were revised downward to 0.9% for 2025 and 1.2% for 2026, reflecting weak exports and investment.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The ECB remains data-dependent and will adjust its policy as needed to ensure inflation stabilizes around its 2% medium-term target without committing to a specific rate path.
• The next meeting is on 17 April 2025.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

With demand for the franc and the greenback seemingly at equilibrium since last Thursday, USD/CHF has ranged sideways as it hovered above 0.8800 while running into headwinds at 0.8850 thus far. This currency pair looks set to extend this ‘neutral’ bias as the trading week comes to a close.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.50% to 0.25% on 20 March 2025, marking the fifth consecutive reduction.
• Underlying inflationary pressure has decreased further this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected, decreasing from 0.7% in November to 0.3% in February, primarily due to lower electricity prices.
• In the shorter term, the new conditional inflation forecast is slightly higher than December: 0.3% for Q2 2025, 0.4% for 2025 overall, and 0.8% for 2026 and 2027, based on the assumption that the SNB policy rate remains at 0.25% over the entire forecast horizon.
• GDP growth in Switzerland remains moderate, with the services sector continuing to show slightly stronger growth, while manufacturing faces challenges.
• The SNB anticipates GDP growth of around 1.0% to 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 19 June 2025.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

On Wednesday, consumer inflation in the U.K. moderated lower in February, with headline CPI easing from an annual rate of 3.0% in the previous month to 2.8% while the core eased from 3.7% to 3.5%. Although inflation continues to remain above the Bank of England’s (BoE) target of 2%, the latest print points to some signs of abating price pressures. The largest downward contribution came from prices of clothing which declined for the first time since October 2021, recreation and culture as well as in housing and utilities. The pound fell under 1.2900 to drop as low as 1.2870 before stabilizing around 1.2890 as Asian markets came online.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain the Bank Rate at 4.50% on 19 March 2025, while one member preferred to reduce it by 25 basis points (bps).
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation increased to 3.0% in January from 2.5% in December, slightly higher than expected in the February Report; domestic price and wage pressures are moderating, but remain somewhat elevated.
• Although global energy prices have fallen back recently, they remain higher than last year and CPI inflation is still projected to rise to around 3.75% in 2025 Q3. While CPI inflation is expected to fall back thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• While UK GDP growth estimates have been slightly stronger than expected at the time of the February Monetary Policy Report, business survey indicators generally continue to suggest weakness in growth and particularly in employment intentions. In recent quarters, subdued activity has been judged to reflect both demand and supply factors.
• The labour market had continued to ease, although it was still judged to be broadly in balance – some indicators of employment intentions had deteriorated markedly, to levels consistent with shrinking employment while other indicators, such as the number of vacancies, had not weakened to the same extent.
• Domestic price and wage pressures were moderating, but remained somewhat elevated. A range of indicators suggested that underlying pay growth had eased further in recent months, although annual growth in private sector regular average weekly earnings had picked up to 6.1% in the three months to January.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Demand for the Loonie initially increased on Wednesday causing USD/CAD to dip under 1.4250. This currency pair made an overnight low of 1.4235 before reversing sharply to momentarily surge past 1.4300.  The Loonie continues to face higher-than-usual volatility due to the ongoing trade policy uncertainties between the U.S. and Canada as well as the sudden surge in crude oil prices – Canada is one of the largest non-OPEC+ producing nations.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 2.75% on 12 March; this marked the seventh consecutive meeting where rates were reduced.
• The bank announced its plan to complete the normalization of its balance sheet, ending quantitative tightening, and will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy.
• The Governing Council noted that the economy grew more than expected in the fourth quarter of last year, spurred by past rate cuts but growth is now expected to slow at the turn of the year due to increasing trade conflict with the United States.
• Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.
• Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.
• While economic growth has come in stronger than expected, the pervasive uncertainty created by continuously changing U.S. tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest.
• While monetary policy cannot offset the impacts of a trade war, the Governing Council will carefully assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.
• The Council will also be closely monitoring inflation expectations and is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 16 April 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

After increasing for three straight weeks, the EIA inventories finally registered a drawdown of 3.3M barrels of crude – notably higher than the forecast of a 1.5M draw. This latest report marked only the second draw in nine weeks, highlighting weaker demand for crude oil in the United States. Coupled with mounting concerns about tighter global supply following the U.S. threat of tariffs on nations that buy Venezuelan crude, WTI oil jumped nearly 1.7% overnight before pulling back to notch a gain of 0.9%. This benchmark briefly surged past $70 per barrel before settling around $69.70. Tailwinds continue to build for this commodity with oil prices all but certain to record its third successive week of closing in the green.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 27 March 2025 first appeared on IC Markets | Official Blog.

China’s Vice Premier Ding Xuexiang:

• Will strive to achieve full-year growth target
• Will implement more pro-active macro policies this year
• Improving trend in China’s economy has become more consolidated
• Will resolutely oppose protectionism
• There is a significant rise in uncertainties in the world
• Will prompt development of private firms
• Says will study issues concerning foreign companies
• Says welcomes foreign companies to invest in China

This article was written by Eamonn Sheridan at www.forexlive.com.