Global Markets:

•  Asian Stock Markets : Nikkei up 0.01%, Shanghai Composite down 0.29%, Hang Seng down 0.02% ASX up 0.07%
• Commodities : Gold at $3053.35 (0.60%), Silver at $33.7 (0.68%), Brent Oil at $71.35 (0.5%), WTI Oil at $68.1 (0.54%)
• Rates : US 10-year yield at 4.281, UK 10-year yield at 4.7120, Germany 10-year yield at 2.7650

News & Data:

• (CAD) Core Retail Sales m/m 0.2%  to -0.1% expected
• (CAD) Retail Sales m/m -0.6%  to -0.4% expected

Markets Update:

Asia-Pacific markets mostly traded higher on Monday as investors monitored the looming April 2 tariff deadline set by U.S. President Donald Trump. Australia’s S&P/ASX 200 dipped slightly by 0.07%. South Korea’s Kospi rose 0.13%, while the small-cap Kosdaq gained 0.74% after the country’s Constitutional Court dismissed the impeachment of Prime Minister Han Duck-soo. Japan’s Nikkei 225 inched up 0.14%, whereas the broader Topix slipped 0.24%. In China, Hong Kong’s Hang Seng Index rose 0.10%, while the mainland CSI 300 remained flat following Premier Li Qiang’s caution over “rising instability” and his call for open markets.

Meanwhile, U.S. stock futures pointed to further gains, suggesting a potential continuation of last week’s positive momentum. On Friday, major U.S. stock indexes rebounded after Trump hinted at possible “flexibility” regarding tariffs, though he reaffirmed the April 2 deadline for reciprocal measures. The S&P 500 edged up 0.08% to 5,667.56, breaking a four-week losing streak driven by trade tensions, recession concerns, and a selloff in tech stocks.

The Nasdaq Composite climbed 0.52% to 17,784.05, while the Dow Jones Industrial Average gained 32.03 points, or 0.08%, closing at 41,985.35. Investors remain cautious as trade policies and economic uncertainties continue to shape market movements.

Markets in Asia are reacting to global economic developments, with investors keeping a close eye on trade policies and geopolitical risks. As the tariff deadline nears, volatility could increase across global markets, affecting investor sentiment and future market trends.

Upcoming Events: 

• 01:45 PM GMT – USD Flash Manufacturing PMI
• 01:45 PM GMT – USD Flash Services PMI

The post Monday 24th March 2025: Asia-Pacific Markets cautious as U.S. Tariff Deadline Approaches first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 24 March 2025

What happened in the Asia session?

Business activity in Japan declined for the first time in five months as the Composite PMI tumbled from 52.0 in the previous month to 48.5 in March, based on flash estimates. Underlying data showed that this was partly due to a fresh fall in service sector activity, while manufacturing output declined at the quickest pace for a year. The reduction in overall activity coincided with a slight drop in composite new business, with firms noting that strong inflationary pressure had dampened sales and made some customers hesitant to commit to orders. Growth of new business slowed notably at services companies and fell solidly at goods producers. This marked the first drop in private sector activity since October and the sharpest contraction since February 2022. The yen sold off as weak PMI activity, combined with a potential slowdown in economic growth, may nudge the Bank of Japan towards another pause at its next meeting – USD/JPY was rising strongly towards 150 by midday in Asia.

What does it mean for the Europe & US sessions?

The flash PMI report for the Euro Area is once again expected to show a dichotomy between the manufacturing and services sectors. Although manufacturing activity has remained in contraction since mid-2022, there have been signs of improvement over the last couple of months. Should overall PMI activity be boosted by the latest fiscal plans by Germany and the other major European nations, the euro could climb above 1.0900 once again.

Service-producing businesses in the U.K. are once again predicted to pull up overall PMI activity as the manufacturing sector remains in contraction territory. Demand for the pound could receive a boost should PMI activity pick up strongly in March. Later on, Bank of England (BoE) Governor Andrew Bailey will be speaking about the U.K. economy at the University of Leicester Chancellor’s Distinguished Lecture Series in England where audience questions are expected. Following last week’s monetary policy announcement, Governor Bailey could shed further insights on future policy action by this central bank.

The Dollar Index (DXY)

Key news events today

Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

The flash report for Composite PMI is expected to show both the manufacturing and services sector expand in March, albeit at a slower pace. With the ongoing trade policy uncertainties lingering in the background and potentially escalating in the coming weeks, economic output in the U.S. could take a hit in the near-term. Demand for the greenback picked up last week, providing a floor for the DXY at around the 103.30 mark before climbing above 104 last Friday. Demand could continue to gain further traction as the new trading week gets underway.

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

Weak Bullish

Gold (XAU)

Key news events today

Composite PMI (1:45 pm GMT)

What can we expect from Gold today?

Spot prices for gold notched its latest intraday high last Thursday as it breached $3,050/oz. This precious metal hit $3,057.57/oz before pulling back to close at $3,022.94/oz on Friday. Demand continues to remain robust and any decline in prices could be an opportunity for long-term buyers to scoop up this commodity and send prices higher.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

Composite PMI (10:00 pm GMT 23rd March)

What can we expect from AUD today?

Composite PMI activity in Australia increased from 50.6 in the previous month to 51.3 in March, based on flash estimates. This latest report highlighted the strongest growth in private sector activity in seven months, buoyed by improvements in both manufacturing and services. The expansion in output was driven by higher new business growth, though export orders declined. With PMI activity expanding for the sixth successive month, the Aussie was buoyed as it climbed towards 0.6300 at the beginning of the Asia session.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

After falling sharply in the second half of last week, the Kiwi stabilized around 0.5730 as markets reopened on Monday. This currency pair climbed as high as 0.5750 as Asian markets came online, potentially lifted by the Aussie due to stronger-than-anticipated PMI data.

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

Weak Bullish

The Japanese Yen (JPY)

Key news events today

Composite PMI (12:30 am GMT)

What can we expect from JPY today?

Business activity in Japan declined for the first time in five months as the Composite PMI tumbled from 52.0 in the previous month to 48.5 in March, based on flash estimates. Underlying data showed that this was partly due to a fresh fall in service sector activity, while manufacturing output declined at the quickest pace for a year. The reduction in overall activity coincided with a slight drop in composite new business, with firms noting that strong inflationary pressure had dampened sales and made some customers hesitant to commit to orders. Growth of new business slowed notably at services companies and fell solidly at goods producers. This marked the first drop in private sector activity since October and the sharpest contraction since February 2022. The yen sold off as weak PMI activity, combined with a potential slowdown in economic growth, may nudge the Bank of Japan towards another pause at its next meeting – USD/JPY was rising strongly towards 150 by midday in Asia.

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

Composite PMI (9:00 am GMT)

What can we expect from EUR today?

The flash PMI report for the Euro Area is once again expected to show a dichotomy between the manufacturing and services sectors. Although manufacturing activity has remained in contraction since mid-2022, there have been signs of improvement over the last couple of months. Should overall PMI activity be boosted by the latest fiscal plans by Germany and the other major European nations, the euro could climb above 1.0900 once again.

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

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the franc waned last week as USD/CHF found a floor around 0.8750 before closing at 0.8832 last Friday. This currency pair was ascending towards 0.8850 at the beginning of the Asia session and it should remain elevated as the day progresses.

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

Medium Bullish

The Pound (GBP)

Key news events today

Composite PMI (9:30 am GMT)

BoE Gov Bailey’s Speech (6:00 pm GMT)

What can we expect from GBP today?

Service-producing businesses in the U.K. are once again predicted to pull up overall PMI activity as the manufacturing sector remains in contraction territory. Demand for the pound could receive a boost should PMI activity pick up strongly in March. Later on, Bank of England (BoE) Governor Andrew Bailey will be speaking about the U.K. economy at the University of Leicester Chancellor’s Distinguished Lecture Series in England where audience questions are expected. Following last week’s monetary policy announcement, Governor Bailey could shed further insights on future policy action by this central bank.

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 Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

After rising strongly in December with a growth of 2.6% MoM, retail sales in Canada declined 0.6% in January as sales were down in three out of the nine sub-sectors, led by decreases at motor vehicle and parts dealers. The Loonie weakened on Friday causing USD/CAD to hit a high of 1.4373 before closing at 1.4346. Combined with trade policy uncertainties between the U.S. and Canada, volatility for this currency pair is anticipated to remain elevated.

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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude oil prices face overhead pressures as a potential ceasefire between Russia and Ukraine, combined with global trade uncertainty, could lead to an increase in Russian oil to markets as global demand tapers off. WTI oil recorded its second successive week of closing in the green last Friday but prices were sliding lower as markets re-opened on Monday. This benchmark dipped under $68 per barrel as Asian markets came online and is expected to drift lower as the day progresses.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 24 March 2025 first appeared on IC Markets | Official Blog.

The week will begin with the release of flash services PMI and flash manufacturing PMI data for the eurozone, the U.K., and the U.S. Additionally, BoE Governor Andrew Bailey will speak about the U.K. economy at the University of Leicester’s Chancellor’s Distinguished Lecture Series in England. While audience questions are expected, market volatility is unlikely unless he provides new insights.

On Tuesday, Japan will release its monetary policy meeting minutes along with the BoJ core CPI y/y data. In the U.S., the focus will be on CB consumer confidence, new home sales data, and the Richmond manufacturing index.

Wednesday’s key highlight for Australia will be the CPI figures, while in the U.K., inflation data and the annual budget release will take center stage. In the U.S., durable goods orders m/m will also be released. On Thursday, the U.S. will publish its final GDP q/q figures along with pending home sales m/m.

Friday’s data releases include Tokyo’s core CPI y/y for Japan, retail sales data for the U.K., and GDP m/m for Canada. In the U.S., key reports will include the core PCE price index m./m, personal income and personal spending data, as well as revised University of Michigan consumer sentiment and inflation expectations.

Throughout the week, several FOMC members are expected to deliver remarks.

The PMI survey for the eurozone and the U.K. will be closely monitored, with the consensus pointing to an overall improvement in the data. Recently, optimism has grown among investors regarding Germany’s plans for significantly looser fiscal policy. Analysts from MUFG point out that such changes typically take time to be implemented, but they could boost business confidence in the meantime. However, uncertainty surrounding Trump’s proposed tariffs remains a challenge.

In the U.S., the consensus for CB consumer confidence is 94.2, down from the previous 98.3.

Recently, consumer sentiment has become increasingly important as it offers a clearer picture of the economy. Any further decline could signal weakening economic growth and influence future policy decisions.

According to ING analysts, the latest drop in consumer confidence can be attributed to growing household concerns over the impact of the Department of Government Efficiency’s spending cuts on jobs and entitlements. Additionally, uncertainty surrounding potential tariffs is raising fears of higher prices, which could reduce purchasing power and lower the standard of living.

Australia’s monthly CPI rose by 2.5% y/y in January, aligning with Westpac’s forecast and slightly below the market median of 2.6%. On a monthly basis, the CPI Indicator fell by 0.2%. The trimmed mean CPI for January increased to 2.8% y/y, slightly up from 2.7% in December.

Electricity prices rose by 8.9% in January as some Queensland households exhausted their $1,000 state rebate. Despite the third installment of the Commonwealth Energy Bill Relief Fund (except in Western Australia), the increase in electricity prices highlights the impact of the Queensland rebate ending.

Westpac’s forecast for February is 0.0% m/m and 2.5% y/y, as the month typically experiences seasonal softness. When seasonally adjusted, the forecast suggests a 0.2% monthly increase.

In the U.K., the consensus for CPI y/y is 2.9%, down slightly from the previous 3.0%, while core CPI y/y is expected to ease to 3.6% from 3.7%.

Headline CPI is projected to decline marginally, but the broader trend remains upward throughout 2024. With energy prices no longer providing deflationary relief, CPI is forecast to approach 4% in the second half of the year. Services inflation is expected to improve gradually, with a modest decline in February followed by further progress in the spring.

This week the U.K. will also reveal its annual budget, but this is less likely to influence the BoE’s policy in the short term. Last week, the BoE adopted a less dovish stance, emphasizing uncertainty regarding the continuation of quarterly rate cuts.

The BoE is still anticipated to deliver a rate cut in May, but it’s unclear if it will continue with cuts at a quarterly pace after that because inflation is expected to rise in Q3.

In the U.S., the consensus for core durable goods orders m/m is 0.4%, up from the previous 0.0%, while durable goods orders m/m are expected to decline by 0.6% after a 3.2% increase in the prior month.

Analysts from Wells Fargo note that in January, the U.S. experienced a record surge in industrial supply imports from Canada, which significantly impacted Q1 GDP growth estimates, with some projections even turning negative. Durable goods orders also rose by 3.2%, marking the third-largest monthly gain in three years.

Despite these strong figures, manufacturing sector sentiment remains cautious, as regional PMIs from the Federal Reserve banks indicate contraction in New York, Texas, Richmond, and Kansas City. This suggests that the surge in imports and orders may be driven by companies pulling forward supplies to mitigate potential tariff risks. However, recent improvements in core capital goods orders hint at a possible, albeit gradual, recovery in manufacturing activity.

The consensus for Tokyo core CPI y/y is 2.2%, unchanged from the previous reading.

Analysts at ING expect a slight decline in Tokyo inflation, mainly due to energy subsidies and stable fresh food prices. However, core inflation, which excludes fresh food and energy, is projected to remain steady at 1.9%.

As anticipated, the BoJ kept its interest rates unchanged at 0.50% and reiterated its belief that inflation will reach its target in the second half of its three-year forecast period. However, the Bank also acknowledged persistent uncertainties regarding the impact of foreign trade policies and exchange rate.

In the U.S., the consensus for the core PCE price index m/m is 0.3% vs. the previous 0.3%. Personal income m/m is expected to rise by 0.4%, down from the prior 0.9%, while personal spending m/m is forecast to increase by 0.6%, rebounding from -0.2% previously.

A 0.3% increase would push the y/y measure to around 2.75%, up from 2.65% in January and this could influence the Fed’s decision to maintain current interest rates, though Chair Powell has indicated that the central bank is willing to tolerate short-term inflation fluctuations and still intends to cut rates later this year.

Wall Street Journal’s Nick Timiraos pointed out that while CPI and PPI were softer in February compared to January, the components feeding into PCE were not.

This article was written by Gina Constantin at www.forexlive.com.

The overall risk mood is holding up so far with S&P 500 futures seen up 0.7%. That is helped by some overnight news on US tariffs here: White House is narrowing its approach to April 2 tariffs set – likely omitting a set

As we move closer to the 2 April deadline, expect there to be plenty of contradictions and volatility bouts with Trump surely to also offer his own takes on the tariffs implementation. For now, the latest headline is helping risk trades at the balance. That comes after a late recovery in Wall Street on Friday as well.

In FX, dollar pairs are more muted on the day as we slowly gear towards month-end and quarter-end. USD/JPY is the only decent mover, up 0.3% to 149.80 currently. Besides that, other major currencies aren’t doing a whole lot.

Coming up in the session ahead, euro area PMI data will put the spotlight on the euro. The estimates suggest a slight pick up in activity in March but I reckon the important detail will be to see how businesses are taking to the German debt brake reform and plans for increased spending.

At the balance, a more positive set of reports will not force the ECB to be pressured into acting in April. But policymakers could still decide to anyway given the balance with existing inflation pressures. As things stand, traders are pricing in a ~65% probability of a rate cut for next month.

0815 GMT – France March flash manufacturing, services, composite PMI0830 GMT – Germany March flash manufacturing, services, composite PMI0900 GMT – Eurozone March flash manufacturing, services, composite PMI0900 GMT – SNB total sight deposits w.e. 21 March0930 GMT – UK March flash manufacturing, services, composite PMI

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

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

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• Trade ideas thread – Monday, 24 March, insightful charts, technical analysis, ideas
• Turkey turmoil – short selling banned on Istanbul Stock Exchange
• Monday morning open levels – indicative forex prices – 24 March 2025
• Mark Carney calls April 28 election in Canada
• Newsquawk Week Ahead: US PCE, Global PMIs, UK CPI and Spring Statement, BoJ SoO
• Weekly Market Outlook (24-28 March)
• European officials concerned over relying on Fed for USD funding in times of mkt stress
• Trump revoking legal status of more than half a million migrants: US labor mkt implication
• Japan and China met on Saturday for talks on their economies
• NVIDIA’s Stock Analysis: AI-Based Orderflow Analysis Reveals Quiet Strengh

• While
  there were news items over the weekend:

  Mark Carney calls April 28 election in Canada

• Turkey turmoil – short selling banned on Istanbul Stock Exchange
• Trump revoking legal status of more than half a million migrants: US labor mkt implication
• Japan and China met on Saturday for talks on their economies

the
market-moving news early on Monday here in Asia (late on Sunday
afternoon US time) was that the White house said April 2 tariff plans
are being trimmed:

• Scales
  back April 2 tariff plan, focuses on targeted reciprocal levies
• Sectoral
  tariffs on cars, chips, pharma
  unlikely to be announced April 2
• Reciprocal
  tariffs still set to hit top trading partners including ‘Dirty 15’
  (China,
  the EU, Mexico, Vietnam, Ireland, Germany, Taiwan, Japan, South
  Korea, Canada, India, Thailand, Italy, Switzerland, and Malaysia, if
  you were wondering)

The
Wall Street Journal carried the report. The USD began to weaken soon
after. It was when Globex reopened for the week, though, with gaps
higher for US equity index futures, that FX accelerated. AUD was a
notable beneficiary, but EUR, GBP, NZD and CAD all gained. There
have been retracements since.

USD/JPY
traded higher, towards, but not hitting, 150. As the yen lost ground
we had some comments from Japan’s Finance Minister Kato, Bank of
Japan Deputy Governor Uchida, and Bank of Japan Governor Ueda that
have seen the yen stabilise weaker on the session.

We
had preliminary PMIs for March today from Australia and Japan, all
weakening from February.

The
People’s Bank of China set its reference rate for USD/CNY at the
weakest (for CNY) since January 20.

This is the ES (its a CFD that tracks ES) showing the opening gap for beginning of the week trade on the tariff ‘narrowing’ news. Gaps do tend to fill, so be wary.

—

In regional political news, South Korean Prime Minister Han Duck-soo, who was impeached late last year for his actions following the martial law imposition, had his impeachment overturned in a 7-1 vote by South Korea’s Constitutional Court today.

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

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 103.29
Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 101.79
Supporting reasons: Identified as a pullback support, indicating a potential area where the price could stabilize once again.

1st resistance: 105.78
Supporting reasons: Identified as a pullback resistance that aligns close to a confluence of Fibonacci levels i.e. the 38.2% and 61.8% retracements, indicating a potential level that could cap further upward movement. The presence of the red Ichimoku Cloud adds further significance to the strength of this resistance zone.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

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

Pivot: 1.0948
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 1.0675
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: 1.1110
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/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: 159.42
Supporting reasons: Identified as a pullback support that aligns with a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 155.51
Supporting reasons: Identified as a multi-swing-low support, indicating a potential area where the price could stabilize once again.

1st resistance: 164.69
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

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: 0.8349
Supporting reasons: Identified as a pullback support that aligns with a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 0.8244
Supporting reasons: Identified as a swing-low support, indicating a potential area where the price could stabilize once more.

1st resistance: 0.8431
Supporting reasons: Identified as a swing-high resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

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

Pivot: 1.3046

Supporting reasons: Identified as an overlap resistance that aligns close to a 127.2% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 1.2776
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, acting as a potential level where the price could stabilize once again.

1st resistance: 1.3260
Supporting reasons: Identified as a pullback resistance, indicating a potential level that could cap further upward movement.

GBP/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price has made a bullish bounce off the pivot and could potentially rise toward the 1st resistance.

Pivot: 192.01

Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 187.05
Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 198.37
Supporting reasons: Identified as a swing-high resistance, indicating a potential level that could cap further upward movement.

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price has made a bullish bounce off the pivot and could potentially rise toward the 1st resistance.

Pivot: 0.8752

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

1st support: 0.8607
Supporting reasons: Identified as a pullback support that aligns close to a 127.2% Fibonacci extension, indicating a potential level where the price could stabilize once again.

1st resistance: 0.8915
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.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price has made a bullish bounce off the pivot and could potentially rise toward the 1st resistance.

Pivot: 146.90

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

1st support: 144.79
Supporting reasons: Identified as a pullback support, suggesting a potential area where the price could stabilize once more.

1st resistance: 151.23
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.

USD/CAD:

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: 1.4505

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: 1.4152
Supporting reasons: Identified as a swing-low support that aligns close to a 50% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.4735
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 is rising towards the pivot and it could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6401
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.

1st support: 0.6205

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 again.

1st resistance: 0.6537
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.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Neutral

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

Pivot: 0.5828

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

1st support: 0.5594

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

1st resistance: 0.5928

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.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price has made a bullish bounce off the pivot and could potentially rise toward the 1st resistance.

Pivot: 40,856.80

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

1st support: 40,210.06

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

1st resistance: 43,308.85

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

DE40 (DAX):

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: 22,177.80

Supporting reasons: Identified as a swing-low support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound. The presence of the green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 21,293.20

Supporting reasons: Identified as multi-swing low support that aligns close to a 38.2% Fibonacci retracement indicating a key level where the price could stabilize once more.

1st resistance: 23,358.91
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price has made a bullish bounce off the pivot and could potentially rise toward the 1st resistance.

Pivot: 5,528.60

Supporting reasons: Identified as a swing-low support that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound. 

1st support: 5,386.80

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

1st resistance: 5,868.70

Supporting reasons: Identified as a pullback 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: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 94,689.34

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

1st support: 73,176.19
Supporting reasons: Identified as a pullback support, indicating a potential level where the price could stabilize once more.

1st resistance: 107,885.04
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 2,645.94

Supporting reasons: Identified as a pullback resistance that aligns with a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1,849.60
Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 3,041.57
Supporting reasons: Identified as a pullback 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: Bearish

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

Pivot: 70.11

Supporting reasons: Identified as a swing-high resistance, indicating a potential area where selling pressures could intensify. 

1st support: 65.64
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 72.58
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.

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: 2,954.94
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 stage a rebound. The presence of the green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 2,790.01
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: 3,091.98
Supporting reasons: Identified as a resistance that aligns with the 61.8% Fibonacci projection, indicating a potential area that could halt any further upward movement.

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The post Monday 24th March 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 24 March 2025

What happened in the U.S. session?

After rising strongly in December with a growth of 2.6% MoM, retail sales in Canada declined 0.6% in January as sales were down in three out of the nine sub-sectors, led by decreases at motor vehicle and parts dealers. The Loonie weakened on Friday causing USD/CAD to hit a high of 1.4373 before closing at 1.4346. Combined with trade policy uncertainties between the U.S. and Canada, volatility for this currency pair is anticipated to remain elevated.

What does it mean for the Asia Session?

Composite PMI activity in Australia increased from 50.6 in the previous month to 51.3 in March, based on flash estimates. This latest report highlighted the strongest growth in private sector activity in seven months, buoyed by improvements in both manufacturing and services. The expansion in output was driven by higher new business growth, though export orders declined. With PMI activity expanding for the sixth successive month, the Aussie was buoyed as it climbed towards 0.6300 at the beginning of this session.

The Dollar Index (DXY)

Key news events today

Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

The flash report for Composite PMI is expected to show both the manufacturing and services sector expand in March, albeit at a slower pace. With the ongoing trade policy uncertainties lingering in the background and potentially escalating in the coming weeks, economic output in the U.S. could take a hit in the near-term. Demand for the greenback picked up last week, providing a floor for the DXY at around the 103.30 mark before climbing above 104 last Friday. Demand could continue to gain further traction as the new trading week gets underway.

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 29 to 30 April 2025.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Composite PMI (1:45 pm GMT)

What can we expect from Gold today?

Spot prices for gold notched its latest intraday high last Thursday as it breached $3,050/oz. This precious metal hit $3,057.57/oz before pulling back to close at $3,022.94/oz on Friday. Demand continues to remain robust and any decline in prices could be an opportunity for long-term buyers to scoop up this commodity and send prices higher.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

Composite PMI (10:00 pm GMT 23rd March)

What can we expect from AUD today?

Composite PMI activity in Australia increased from 50.6 in the previous month to 51.3 in March, based on flash estimates. This latest report highlighted the strongest growth in private sector activity in seven months, buoyed by improvements in both manufacturing and services. The expansion in output was driven by higher new business growth, though export orders declined. With PMI activity expanding for the sixth successive month, the Aussie was buoyed as it climbed towards 0.6300 at the beginning of the Asia session.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

After falling sharply in the second half of last week, the Kiwi stabilized around 0.5730 as markets reopened on Monday. This currency pair climbed as high as 0.5750 as Asian markets came online, potentially lifted by the Aussie due to stronger-than-anticipated PMI data.

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

Weak Bullish

The Japanese Yen (JPY)

Key news events today

Composite PMI (12:30 am GMT)

What can we expect from JPY today?

Business activity in Japan declined for the first time in five months as the Composite PMI tumbled from 52.0 in the previous month to 48.5 in March, based on flash estimates. Underlying data showed that this was partly due to a fresh fall in service sector activity, while manufacturing output declined at the quickest pace for a year. The reduction in overall activity coincided with a slight drop in composite new business, with firms noting that strong inflationary pressure had dampened sales and made some customers hesitant to commit to orders. Growth of new business slowed notably at services companies and fell solidly at goods producers. This marked the first drop in private sector activity since October and the sharpest contraction since February 2022. The yen sold off as weak PMI activity, combined with a potential slowdown in economic growth, may nudge the Bank of Japan towards another pause at its next meeting – USD/JPY was rising strongly towards 150 following this news release.

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 percent 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

Composite PMI (9:00 am GMT)

What can we expect from EUR today?

The flash PMI report for the Euro Area is once again expected to show a dichotomy between the manufacturing and services sectors. Although manufacturing activity has remained in contraction since mid-2022, there have been signs of improvement over the last couple of months. Should overall PMI activity be boosted by the latest fiscal plans by Germany and the other major European nations, the euro could climb above 1.0900 once again.

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

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the franc waned last week as USD/CHF found a floor around 0.8750 before closing at 0.8832 last Friday. This currency pair was ascending towards 0.8850 at the beginning of the Asia session and it should remain elevated as the day progresses.

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

Medium Bullish

The Pound (GBP)

Key news events today

Composite PMI (9:30 am GMT)

BoE Gov Bailey’s Speech (6:00 pm GMT)

What can we expect from GBP today?

Service-producing businesses in the U.K. are once again predicted to pull up overall PMI activity as the manufacturing sector remains in contraction territory. Demand for the pound could receive a boost should PMI activity pick up strongly in March. Later on, Bank of England (BoE) Governor Andrew Bailey will be speaking about the U.K. economy at the University of Leicester Chancellor’s Distinguished Lecture Series in England where audience questions are expected. Following last week’s monetary policy announcement, Governor Bailey could shed further insights on future policy action by this central bank.

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 Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

After rising strongly in December with a growth of 2.6% MoM, retail sales in Canada declined 0.6% in January as sales were down in three out of the nine sub-sectors, led by decreases at motor vehicle and parts dealers. The Loonie weakened on Friday causing USD/CAD to hit a high of 1.4373 before closing at 1.4346. Combined with trade policy uncertainties between the U.S. and Canada, volatility for this currency pair is anticipated to remain elevated.

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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude oil prices face overhead pressures as a potential ceasefire between Russia and Ukraine, combined with global trade uncertainty, could lead to an increase in Russian oil to markets as global demand tapers off. WTI oil recorded its second successive week of closing in the green last Friday but prices were sliding lower as markets re-opened on Monday. This benchmark dipped under $68 per barrel as Asian markets came online and is expected to drift lower as the day progresses.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 24 March 2025 first appeared on IC Markets | Official Blog.

Westpac with the analysis. In brief:

• copper prices supported by by expectations of a tighter global supply
• U.S. copper premiums have jumped to 14% above London Metal Exchange prices, driven by the potential for 25% tariffs on the metal later this year
• has triggered a rush of copper shipments to the U.S.
• could result in supply shortages elsewhere in the global market

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

Malaysia is preparing to tighten its oversight of semiconductor exports, particularly shipments of high-end Nvidia AI chips, in response to U.S. pressure to prevent illicit flows to China. Trade Minister Zafrul Aziz said the U.S. has asked Malaysia to ensure chips only reach approved data centres, in line with Washington’s broader export controls aimed at restricting China’s access to advanced technology.

The move follows rising concerns over illegal rerouting of chips, highlighted by a recent $390 million fraud case in Singapore involving Nvidia chips believed to have passed through Malaysia. As a growing data centre hub attracting over $25 billion in investments from tech giants like Nvidia and Microsoft, Malaysia has formed a task force to improve regulation, led by Digital Minister Gobind Singh Deo.

Zafrul acknowledged the challenges of enforcement, citing the complexity of global supply chains, but noted that the U.S. is also pressing its own firms to tighten compliance with export restrictions.

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

Ant Group has developed AI models using Chinese-made chips from firms like Alibaba and Huawei, reducing training costs by around 20%, according to sources.

The company used a Mixture of Experts (MoE) approach, achieving performance close to Nvidia’s restricted H800 chips.

While Ant still uses some Nvidia and AMD hardware, it is increasingly turning to domestic alternatives.

This shift reflects China’s broader effort to build AI capabilities with local hardware in response to U.S. export controls.

Ant claims its models have even outperformed Meta’s in certain benchmarks, though these results have not been independently verified.

MoE models, known for their efficiency, are also being adopted by major players like Google and DeepSeek, underscoring a growing trend in AI development.

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

Morgan Stanley raises its 2025 GDP growth forecast for China by 50 bps to 4.5%

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

Japan finmin Kato: Important for currencies to move in stable manner reflecting fundamentals

• Will take appropriate action against excessive moves

Kato’s comments come as the yen is seeing another bout of weakness on the day:

The above is an hourly candle chart showing USD/JPY just under 150.00. That’s well loweeer than it shighs early thins year around 158.

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