IC Markets Europe Fundamental Forecast | 3 March 2025

What happened in the Asia session?

Manufacturing activity returned to expansion strongly in October and November but growth stalled noticeably over the last couple of months. January’s reading of 50.1 missed market estimates as it registered the slowest pace of expansion in four months. However, February’s MPI reading edged slightly higher to 50.8 to exceed the market forecast of 50.4. This improvement was led by the fastest rises in output and new orders for three months while employment signalled a noticeably milder drop. In addition, confidence in the outlook for this sector improved. Despite the better-than-anticipated PMI readings, WTI oil fizzled out around $70.60 per barrel before sliding lower towards the $70 mark by midday in Asia.

What does it mean for the Europe & US sessions?

Manufacturing activity in the Euro Area has deteriorated for over two and a half years to highlight the ongoing weakness in this sector. Meanwhile, inflationary pressures look set to moderate lower in February with both headline and core CPI edging lower. A combination of weaker manufacturing output and easing consumer inflation could drive the Euro lower during the European trading hours.

After expanding strongly for most parts of last year, manufacturing activity in the U.K. fell into contraction from October 2024 through January 2025 as sales weakened in both domestic and overseas markets while employment levels and unfinished business saw significant declines. Should this sector continue to contract in February, the pound could face strong headwinds at the start of the European trading session.

Canada’s manufacturing sector expanded strongly in the final quarter of 2024 with PMI output hitting 52.2 in December before easing slightly to 51.6 in January. Although expansion slowed, it marked the fifth consecutive month of growth but production and new orders increased at a weaker pace. However, the Loonie came under intense pressure last week due to the tariffs slapped on Canadian imports into the U.S. with USD/CAD rallying more than 2.1% over the last couple of weeks. This currency pair broke above 1.4400 last Thursday and it should remain supported as the new trading week gets underway.

The Dollar Index (DXY)

Key news events today

ISM Manufacturing PMI (3:00 pm GMT)

What can we expect from DXY today?

The Institute for Supply Management (ISM) will release February’’s manufacturing PMI report which is anticipated to show this sector expand for the second consecutive month. After contracting for nine consecutive months, manufacturing activity returned to expansion in January with sub-indices such as new orders and production leading the growth. Should this sector continue to grow for the second month in a row, it would highlight the momentum growth and raise confidence for a more sustained output in the coming months.

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 29 January.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and 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.
• December’s Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee will roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month and redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• In addition, the Committee will reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
• The next meeting runs from 18 to 19 March 2025.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

ISM Manufacturing PMI (3:00 pm GMT)

What can we expect from Gold today?

The Institute for Supply Management (ISM) will release February’’s manufacturing PMI report which is anticipated to show this sector expand for the second consecutive month. After contracting for nine consecutive months, manufacturing activity returned to expansion in January with sub-indices such as new orders and production leading the growth. Should this sector continue to grow for the second month in a row, it would highlight the momentum growth and raise confidence for a more sustained output in the coming months. This latest report could function as a near-term bullish catalyst for the greenback and potentially weigh on gold later today.

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?

Renewed demand for the greenback created intense headwinds for the Aussie as it tanked almost 2.5% last week, reversing sharply off 0.6400 to fall as low as 0.6192. This currency pair opened at 0.6209 on Monday and edged higher as Asian markets came online.

Central Bank Notes:

• The RBA reduced the cash rate by 25 basis points to bring it down to 4.10% on 18 January, 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?

The Kiwi tumbled nearly 2.5% as demand for the greenback picked up strongly causing it to dive under 0.5600 before closing at 0.5595 last Friday. This currency pair stabilized around 0.5600 at the beginning of Monday’s Asia session and it could retrace higher as the day progresses.

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

S&P Global Manufacturing PMI (12:30 am GMT)

What can we expect from JPY today?

Japan’s manufacturing sector deteriorated for the eighth month in a row as softer reductions in production and new orders posted a reading of 49.0 in February. In addition, employment levels stagnated, while optimism eased sharply – attributed mainly to weak sales and confidence in domestic and overseas markets. The yen weakened last week providing USD/JPY with a floor at around the region of 149. This currency pair could continue to edge higher on Monday as weaker manufacturing output could further dampen demand for the yen.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 24 January, by an 8-1 majority vote, to set 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 embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been at around 3% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned.
• Inflation expectations have risen moderately while underlying CPI inflation has been increasing gradually toward the price stability target of 2%. With wages continuing to rise, there has been an increase in moves to reflect higher costs, such as increased personnel expenses and distribution costs, in selling prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 March 2025.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

S&P Global Manufacturing PMI (9:00 am GMT)

Euro Area CPI (10:00 am GMT)

What can we expect from EUR today?

Manufacturing activity in the Euro Area has deteriorated for over two and a half years to highlight the ongoing weakness in this sector. Meanwhile, inflationary pressures look set to moderate lower in February with both headline and core CPI edging lower. A combination of weaker manufacturing output and easing consumer inflation could drive the Euro lower during the European trading hours.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 30 January to mark the fourth 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 2.90%, 3.15% and 2.75% respectively.
• The disinflation process is well on track and inflation is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027.
• 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 Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 6 March 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?

The ongoing implementation of trade tariffs by the U.S. on its major trading partners triggered a wave of demand for the greenback last week, causing USD/CHF to rally almost 1% last week. This currency pair reversed sharply off last week’s lows at 0.8912 to surge above the threshold of 0.9000 – it remained elevated as markets reopened on Monday and should continue to remain supported.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 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 20 March 2025.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

S&P Global Manufacturing PMI (9:30 am GMT)

What can we expect from GBP today?

After expanding strongly for most parts of last year, manufacturing activity in the U.K. fell into contraction from October 2024 through January 2025 as sales weakened in both domestic and overseas markets while employment levels and unfinished business saw significant declines. Should this sector continue to contract in February, the pound could face strong headwinds at the start of the European trading session.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 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.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• 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

S&P Global Manufacturing PMI (2:30 pm GMT)

What can we expect from CAD today?

Canada’s manufacturing sector expanded strongly in the final quarter of 2024 with PMI output hitting 52.2 in December before easing slightly to 51.6 in January. Although expansion slowed, it marked the fifth consecutive month of growth but production and new orders increased at a weaker pace. However, the Loonie came under intense pressure last week due to the tariffs slapped on Canadian imports into the U.S. with USD/CAD rallying more than 2.1% over the last couple of weeks. This currency pair broke above 1.4400 last Thursday and it should remain supported as the new trading week gets underway.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 3% on 29 January; this marked the sixth 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.
• Past cuts to interest rates have started to boost the economy and the recent strengthening in both consumption and housing activity is expected to continue. However, business investment remains weak while the outlook for exports is being supported by new export capacity for oil and gas.
• The Bank forecasts GDP growth will strengthen in 2025 and now projects GDP will grow by 1.8% in both 2025 and 2026, somewhat higher than potential growth.
• The labour market remains soft, with the unemployment rate at 6.7% in December. Job growth has strengthened in recent months, after lagging growth in the labour force for more than a year. Wage pressures, which have proven sticky, are showing some signs of easing.
• CPI inflation remains close to 2%, with some volatility due to the temporary suspension of the GST/HST on some consumer products. Shelter price inflation is still elevated but it is easing gradually, as expected.
• A broad range of indicators, including surveys of inflation expectations and the distribution of price changes among components of the CPI, suggests that underlying inflation is close to 2% with forecasts that CPI inflation will be around the 2% target over the next two years.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate a further 25 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The cumulative reduction in the policy rate since last June is substantial as lower interest rates are boosting household spending and the economy is expected to strengthen gradually and inflation to stay close to target. However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 12 March 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

Caixin Manufacturing PMI (1:45 am GMT)

What can we expect from Oil today?

Manufacturing activity returned to expansion strongly in October and November but growth stalled noticeably over the last couple of months. January’s reading of 50.1 missed market estimates as it registered the slowest pace of expansion in four months. However, February’s MPI reading edged slightly higher to 50.8 to exceed the market forecast of 50.4. This improvement was led by the fastest rises in output and new orders for three months while employment signalled a noticeably milder drop. In addition, confidence in the outlook for this sector improved. Despite the better-than-anticipated PMI readings, WTI oil fizzled out around $70.60 per barrel before sliding lower towards the $70 mark by midday in Asia.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 3 March 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a Bearish continuation toward the 1st support.

Pivot: 107.64
Supporting reasons: Identified as a pullback resistance that aligns with the 38.2% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 106.09
Supporting reasons: Identified as an overlap support that aligns with the 38.2% Fibonacci retracement, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 109.45
Supporting reasons: Identified as a multi swing high resistance, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 1.0343
Supporting reasons: Identified as a pullback support that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where price could rebound.

1st support: 1.0225
Supporting reasons: Identified as a multi swing low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 1.0610
Supporting reasons: Identified as an overlap resistance that aligns close to the 127.2% Fibonacci extension and the 38.2% Fibonacci retracement, indicating a potential level where price could face selling pressure.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 155.65
Supporting reasons: Identified as a multi-swing low support, indicating a potential area where price could rebound.

1st support: 153.13
Supporting reasons: Identified as a swing low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 159.69
Supporting reasons: Identified as a pullback resistance,  indicating a potential level where price could face selling pressure.

EUR/GBP:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 0.8225
Supporting reasons: Identified as a swing low support, indicating a potential area where price could rebound.

1st support: 0.8166
Supporting reasons: Identified as a support that aligns with the 127.2% Fibonacci extension, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 0.8297
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bulish
Overall momentum of the chart: Bullish

Price could potentially drop further to the pivot in the short-term before bouncing from there and rising to the 1st resistance.

Pivot: 1.2501
Supporting reasons: Identified as a pullback support that aligns close to the 38.2% Fibonacci retracement, indicating a potential level where buyers could step in.

1st support: 1.2328
Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 1.2858
Supporting reasons: Identified as a pullback resistance, indicating a potential level that could cap further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation toward the 1st support.

Pivot: 189.69
Supporting reasons: Identified as an overlap resistance that aligns with the 50% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 184.54
Supporting reasons: Identified as a multi-swing low support that aligns close to the 100% Fibonacci projection, indicating a potential level where price could stabilize before continuing higher.

1st resistance: 194.72
Supporting reasons: Identified as an overlap resistance, indicating a potential level where price could face selling pressure.

USD/CHF:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a Bearish continuation toward the 1st support.

Pivot: 0.9035
Supporting reasons: Identified as a pullback resistance that aligns with the 50% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 0.8906
Supporting reasons: Identified as an overlap support,  indicating a potential level where price could face selling pressure.

1st resistance: 0.9171
Supporting reasons: Identified as a swing – high resistance, indicating a potential level where price could face selling pressure.

USD/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st resistance.

Pivot: 151.18
Supporting reasons: Identified as a pullback resistance that aligns with the 23.6% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 147.17
Supporting reasons: Identified as a pullback support that aligns with the 61.8% Fibonacci retracement and the 100% Fibonacci projection, suggesting a potential area where price could stabilize before resuming its upward movement.

1st resistance: 154.79
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential level where price could face selling pressure.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.4348

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 resume the uptrend. The presence of a green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 1.4239
Supporting reasons: Identified as a pullback support that aligns close to a 78.6% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.4537
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.

AUD/USD:

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: 0.6313

Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 0.6144

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

1st resistance: 0.6401
Supporting reasons: Identified as a swing-high resistance that aligns close to a 38.2% Fibonacci retracement, 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 towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.5687

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. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 0.5547

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

1st resistance: 0.5761

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

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 43,294.84

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

1st support: 41,777.16

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

1st resistance: 45,042.77

Supporting reasons: Identified as a multi-swing-high resistance, 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 towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 22,177.80

Supporting reasons: Identified as a swing-low support, indicating a potential area where buying interests could pick up to resume the uptrend. The presence of a green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 21,293.20

Supporting reasons: Identified as a multi-swing-low support that aligns with a confluence of Fibonacci levels i.e. the 23.6% and 38.2% retracements, indicating a key level where the price could stabilize once more.

1st resistance: 22,568.53
Supporting reasons: Identified as a resistance that aligns with a 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 5,819.28

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 5,673.33

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

1st resistance: 6,138.20

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.

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: 100,228.24

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: 83,663.24
Supporting reasons: Identified as a swing-low support that aligns close to a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once more.

1st resistance: 107,158.91
Supporting reasons: Identified as a multi-swing-high resistance that aligns close to the all-time high, 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: 2,813.23

Supporting reasons: Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 2,201.93
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 3,314.48
Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 68.82

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

1st support: 66.66
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 73.03
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bullish
Price could potentially make a bearish reversal off the pivot and fall toward the 1st support.

Pivot: 2879.45
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressure could emerge.

1st support: 2788.35
Supporting reasons: Identified as a pullback support that aligns with the 50% Fibonacci retracement, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 2952.32
Supporting reasons: Identified as a swing high resistance that aligns with the 161.8% Fibonacci extension, indicating a potential level where price could face selling pressure.

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The post Monday 3rd March 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 3 March 2025

What happened in the U.S. session?

The PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – has shown the headline figure accelerating from September through December while the core remained unchanged at an annual rate of 2.8%. Both metrics continue to remain well above the Fed’s target of 2% but inflationary pressures appear to have stalled in the latest report. Headline PCE moderated slightly to an annual rate of 2.5% from 2.6% while the core eased more noticeably from 2.9% to 2.6% in January, both matching market estimates. Despite the softer inflation print, demand for the dollar remained robust due to the ongoing concerns about global trade tariffs – the dollar index (DXY) climbed above 107.50 last Friday to gain nearly 1% on the week.

What does it mean for the Asia Session?

Japan’s manufacturing sector deteriorated for the eighth month in a row as softer reductions in production and new orders posted a reading of 49.0 in February. In addition, employment levels stagnated, while optimism eased sharply – attributed mainly to weak sales and confidence in domestic and overseas markets. The yen weakened last week providing USD/JPY with a floor at around the region of 149. This currency pair could continue to edge higher on Monday as weaker manufacturing output could further dampen demand for the yen.

Crude oil prices experienced significantly higher volatility as WTI oil swung wildly between $68.36 and $71.26 before closing flat on the week at $69.76 per barrel on Friday. This commodity will likely face further catalysts during the Asia session on Monday as China releases its Caixin Manufacturing PMI report. Manufacturing activity returned to expansion strongly in October and November but growth stalled noticeably over the last couple of months. January’s reading of 50.1 missed market estimates as it registered the slowest pace of expansion in four months. Should output for this sector continue to moderate lower, it could create strong headwinds for oil prices with China being the world’s largest import of crude oil. Any sustained slowdown in manufacturing is bound to impact oil imports.

The Dollar Index (DXY)

Key news events today

ISM Manufacturing PMI (3:00 pm GMT)

What can we expect from DXY today?

The Institute for Supply Management (ISM) will release February’’s manufacturing PMI report which is anticipated to show this sector expand for the second consecutive month. After contracting for nine consecutive months, manufacturing activity returned to expansion in January with sub-indices such as new orders and production leading the growth. Should this sector continue to grow for the second month in a row, it would highlight the momentum growth and raise confidence for a more sustained output in the coming months.

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 29 January.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and 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.
• December’s Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee will roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month and redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• In addition, the Committee will reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
• The next meeting runs from 18 to 19 March 2025.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

ISM Manufacturing PMI (3:00 pm GMT)

What can we expect from Gold today?

The Institute for Supply Management (ISM) will release February’’s manufacturing PMI report which is anticipated to show this sector expand for the second consecutive month. After contracting for nine consecutive months, manufacturing activity returned to expansion in January with sub-indices such as new orders and production leading the growth. Should this sector continue to grow for the second month in a row, it would highlight the momentum growth and raise confidence for a more sustained output in the coming months. This latest report could function as a near-term bullish catalyst for the greenback and potentially weigh on gold later today.

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?

Renewed demand for the greenback created intense headwinds for the Aussie as it tanked almost 2.5% last week, reversing sharply off 0.6400 to fall as low as 0.6192. This currency pair opened at 0.6209 on Monday and edged higher as Asian markets came online.

Central Bank Notes:

• The RBA reduced the cash rate by 25 basis points to bring it down to 4.10% on 18 January, 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?

The Kiwi tumbled nearly 2.5% as demand for the greenback picked up strongly causing it to dive under 0.5600 before closing at 0.5595 last Friday. This currency pair stabilized around 0.5600 at the beginning of Monday’s Asia session and it could retrace higher as the day progresses.

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

S&P Global Manufacturing PMI (12:30 am GMT)

What can we expect from JPY today?

Japan’s manufacturing sector deteriorated for the eighth month in a row as softer reductions in production and new orders posted a reading of 49.0 in February. In addition, employment levels stagnated, while optimism eased sharply – attributed mainly to weak sales and confidence in domestic and overseas markets. The yen weakened last week providing USD/JPY with a floor at around the region of 149. This currency pair could continue to edge higher on Monday as weaker manufacturing output could further dampen demand for the yen.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 24 January, by an 8-1 majority vote, to set 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 embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been at around 3% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned.
• Inflation expectations have risen moderately while underlying CPI inflation has been increasing gradually toward the price stability target of 2%. With wages continuing to rise, there has been an increase in moves to reflect higher costs, such as increased personnel expenses and distribution costs, in selling prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 March 2025.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

S&P Global Manufacturing PMI (9:00 am GMT)

Euro Area CPI (10:00 am GMT)

What can we expect from EUR today?

Manufacturing activity in the Euro Area has deteriorated for over two and a half years to highlight the ongoing weakness in this sector. Meanwhile, inflationary pressures look set to moderate lower in February with both headline and core CPI edging lower. A combination of weaker manufacturing output and easing consumer inflation could drive the Euro lower during the European trading hours.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 30 January to mark the fourth 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 2.90%, 3.15% and 2.75% respectively.
• The disinflation process is well on track and inflation is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027.
• 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 Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 6 March 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?

The ongoing implementation of trade tariffs by the U.S. on its major trading partners triggered a wave of demand for the greenback last week, causing USD/CHF to rally almost 1% last week. This currency pair reversed sharply off last week’s lows at 0.8912 to surge above the threshold of 0.9000 – it remained elevated as markets reopened on Monday and should continue to remain supported.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 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 20 March 2025.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

S&P Global Manufacturing PMI (9:30 am GMT)

What can we expect from GBP today?

After expanding strongly for most parts of last year, manufacturing activity in the U.K. fell into contraction from October 2024 through January 2025 as sales weakened in both domestic and overseas markets while employment levels and unfinished business saw significant declines. Should this sector continue to contract in February, the pound could face strong headwinds at the start of the European trading session.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 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.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• 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

S&P Global Manufacturing PMI (2:30 pm GMT)

What can we expect from CAD today?

Canada’s manufacturing sector expanded strongly in the final quarter of 2024 with PMI output hitting 52.2 in December before easing slightly to 51.6 in January. Although expansion slowed, it marked the fifth consecutive month of growth but production and new orders increased at a weaker pace. However, the Loonie came under intense pressure last week due to the tariffs slapped on Canadian imports into the U.S. with USD/CAD rallying more than 2.1% over the last couple of weeks. This currency pair broke above 1.4400 last Thursday and it should remain supported as the new trading week gets underway.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 3% on 29 January; this marked the sixth 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.
• Past cuts to interest rates have started to boost the economy and the recent strengthening in both consumption and housing activity is expected to continue. However, business investment remains weak while the outlook for exports is being supported by new export capacity for oil and gas.
• The Bank forecasts GDP growth will strengthen in 2025 and now projects GDP will grow by 1.8% in both 2025 and 2026, somewhat higher than potential growth.
• The labour market remains soft, with the unemployment rate at 6.7% in December. Job growth has strengthened in recent months, after lagging growth in the labour force for more than a year. Wage pressures, which have proven sticky, are showing some signs of easing.
• CPI inflation remains close to 2%, with some volatility due to the temporary suspension of the GST/HST on some consumer products. Shelter price inflation is still elevated but it is easing gradually, as expected.
• A broad range of indicators, including surveys of inflation expectations and the distribution of price changes among components of the CPI, suggests that underlying inflation is close to 2% with forecasts that CPI inflation will be around the 2% target over the next two years.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate a further 25 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The cumulative reduction in the policy rate since last June is substantial as lower interest rates are boosting household spending and the economy is expected to strengthen gradually and inflation to stay close to target. However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 12 March 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

Caixin Manufacturing PMI (1:45 am GMT)

What can we expect from Oil today?

Crude oil prices experienced significantly higher volatility as WTI oil swung wildly between $68.36 and $71.26 before closing flat on the week at $69.76 per barrel on Friday. This commodity will likely face further catalysts during the Asia session on Monday as China releases its Caixin Manufacturing PMI report. Manufacturing activity returned to expansion strongly in October and November but growth stalled noticeably over the last couple of months. January’s reading of 50.1 missed market estimates as it registered the slowest pace of expansion in four months. Should output for this sector continue to moderate lower, it could create strong headwinds for oil prices with China being the world’s largest import of crude oil. Any sustained slowdown in manufacturing is bound to impact oil imports.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 3 March 2025 first appeared on IC Markets | Official Blog.

US Stocks Surge Higher to Close Out the Week – Nasdaq Up 1.6%

US stock indices finished the week on a positive note after inflation numbers came in as expected and President Trump and Zelenskiy clashed in a White House meeting. All three major indices finished the day up, with the Dow adding 1.39%, the S&P 1.59%, and the Nasdaq closing up 1.63%.

Treasury yields dipped to fresh multi-month lows as uncertainty concerns increased, with the 2-year notably dipping beneath the 4% level, closing down 8.5 basis points at 3.989%, and the 10-year off 7.2 basis points to 4.208%. The dollar pushed higher again, with the DXY adding another 0.34% to move up to 107.61 on the close.

Oil prices dropped, marking their first monthly loss since November, with Brent down 1.03% to $72.81 and WTI down 0.84% to $69.76. Meanwhile, gold fell further in response to the stronger dollar, losing 0.66% on the day to finish the week at $2,858.60.

US Data in Focus This Week

It is a big week ahead for US data, with investors focusing strongly on a raft of fundamental updates, culminating in the Non-Farm Payrolls on Friday. US data has shown strong signs of a turn in the last couple of weeks, and if this week’s numbers indicate a further slowdown in the economy, markets are expected to react accordingly.

US stocks had a strong close on Friday despite the increased uncertainty created by the White House clash. However, treasury yields dropped sharply, and the dollar gained ground on haven buying. Jobs data will be a major focus, with the ADP and weekly unemployment claims reports leading up to the NFP release. If signs of a slowing labor market emerge, Fed rate cut expectations could gain traction. This would raise the question of whether stocks can rally on potential rate cuts or decline further due to weakening fundamentals. Most traders expect a volatile week ahead, regardless of how the numbers unfold.

Busy Day to Start a Big Calendar Week

Traders anticipate heightened volatility in the week ahead, with a full macroeconomic event calendar, central bank updates, and geopolitical factors keeping them on their toes through to Friday’s close.

The first session of the day is relatively quiet, but things pick up later, with the EU CPI data due in the early London session, where a 2.5% increase is expected for the Core CPI, ahead of Thursday’s ECB rate decision.

Shortly after the New York open, the first major US data release of the week arrives with the Final Manufacturing PMI, followed by the more impactful ISM Manufacturing PMI (expected at 50.6) and the ISM Manufacturing Prices Index (expected at 56.2).

The post General Market Analysis – 03/03/25 first appeared on IC Markets | Official Blog.

It’s the first week of the month again, which means key US data releases, particularly job numbers, throughout the week. There are also several other important economic updates from the US and other jurisdictions. On top of that, we have the European Central Bank’s (ECB) rate decision and a host of updates from major central bank figures.

Given all of the above, traders anticipate that markets will remain active, with volatility expected to increase as we move through the week toward the two major calendar highlights: the ECB rate decision and US employment data.

Here is our usual day-by-day breakdown of the major risk events this week:

The Asian session is expected to be relatively quiet, but data releases begin with EU CPI data shortly after the London open. The first key US data arrives soon after the New York open, with the release of the Final Manufacturing PMI and ISM Manufacturing numbers.

The focus in Asia will be on Australian markets, with Retail Sales figures due alongside the Reserve Bank of Australia’s (RBA) Monetary Policy Meeting Minutes. There is little significant data for the rest of the day, but later sessions will feature speeches from key central bankers, including the Bank of Japan’s (BOJ) Ueda and the Federal Open Market Committee’s (FOMC) Williams.

Australian markets remain in focus early in the day, with GDP data set to be released during the Sydney session. Key Swiss CPI numbers are due at the European open, likely causing movement in the Swiss franc. However, traders expect greater market reactions once New York opens. The ADP Non-Farm Employment Change report is first up, followed by the Final Services PMI and ISM Services PMI data. Later in the day, the usual weekly Crude Oil Inventory report will be released.

New Zealand traders will be on alert as Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr is scheduled to speak early in the Asian session. In Europe, initial attention will be on the UK’s Construction PMI data before shifting to the highly anticipated ECB Rate Decision, followed by the ECB’s Statement and Press Conference. Shortly after the New York open, the US Weekly Unemployment Claims data will be released, followed by Canada’s Ivey PMI numbers.

As is typical for the first Friday of the month, the market’s primary focus will be on US employment data, with Non-Farm Payrolls (NFP) expected to come in around +156K. The first two sessions of the day are expected to be relatively quiet until US markets open. Canadian employment numbers are due at the same time, though they are likely to be overshadowed by the US data in terms of market impact. The action doesn’t end there, as several FOMC members, including Federal Reserve Chair Jerome Powell, are scheduled to speak later in the day.

The post The Week Ahead – Week Commencing 3 March 2025 first appeared on IC Markets | Official Blog.

IC Markets Global is committed to providing the best trading experience for our clients, and as part of this commitment, we are making important changes to the CHINA50 and XNGUSD instruments this weekend. These updates will involve transitioning to a new Liquidity Provider (LP), ensuring improved trading conditions and liquidity.

What You Need to Know

To facilitate a seamless transition, we will be applying Swaps/Financing adjustments on Friday. This will account for any Fair Value (Price) differences between the outgoing and incoming LPs. Additionally, the standard triple swap on CFDs, which normally takes place on Fridays, will also be included.

Key Updates and Implications:

• Compensation for Impacted Positions: Positions negatively affected by the Fair Value change will receive compensation through the swap.
• Adjustment for Benefiting Positions: Positions that gain from the Fair Value adjustment will be charged accordingly.
• No Net P/L Impact: These measures will ensure that your positions experience no net Profit/Loss impact due to the Fair Value change.

We encourage you to review your Pending, Stop Loss, and Take Profit orders and modify them if needed.

We appreciate your understanding and cooperation as we continue to enhance your trading experience. If you require further assistance, please do not hesitate to contact our support team.

Kind regards,

IC Markets Global

The post Important Update: CHINA50 and XNGUSD Changes This Weekend first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.18%, Shanghai Composite down 0.40%, Hang Seng down 0.79% ASX up 0.33%
• Commodities : Gold at $2906.35 (-0.33%), Silver at $31.85 (-1.08%), Brent Oil at $72.37 (0.25%), WTI Oil at $68.58 (0.18%)
• Rates : US 10-year yield at 4.283, UK 10-year yield at 4.5010, Germany 10-year yield at 2.4380

News & Data:

• (USD) Prelim GDP q/q 2.3%  to 2.3% expected
• (USD) Unemployment Claims 242K  to 222K expected

Markets Update:

Asia-Pacific markets fell on Friday after U.S. President Donald Trump confirmed that tariffs on imports from Mexico and Canada would take effect next week. Australia’s S&P/ASX 200 dropped 1.15%, while Japan’s Nikkei 225 and Topix lost 2.81% and 1.87%, respectively. South Korea’s Kospi declined 3.15%, with the small-cap Kosdaq falling 3.20%. In China, Hong Kong’s Hang Seng Index slipped 2.34%, and the mainland’s CSI 300 edged down 0.62%. Indian markets also traded lower, with the Nifty 50 dropping 0.99%.

Bitcoin extended its recent decline, falling 1.79% to $82,811.12, marking a nearly 25% drop from its record high in January. Meanwhile, U.S. stocks also ended in the red. The S&P 500 slid 1.59% to 5,861.57, remaining negative for the week and month. The Nasdaq Composite fell 2.78% to 18,544.42, dragged down by Nvidia’s 8.5% drop. The Dow Jones Industrial Average lost 193.62 points, or 0.45%, closing at 43,239.50.

On Thursday, Trump announced that the previously postponed 25% tariffs on Mexico and Canada would be implemented on March 4, citing insufficient action to curb drug trafficking across borders. He also confirmed that China, already facing 10% U.S. tariffs, would be hit with an additional 10% tariff on the same date. These developments have fueled concerns over escalating trade tensions.

Global markets remain under pressure as investors react to rising tariffs and economic uncertainty. The latest trade policies continue to weigh on sentiment, driving losses across major stock indexes worldwide.

Upcoming Events: 

• 01:30 PM GMT – CAD GDP m/m
• 01:30 PM GMT – USD Core PCE Price Index m/m

The post Friday 28th February 2025: Global Markets Slide as U.S. Confirms Tariffs on Mexico, Canada, and China first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 28 February 2025

What happened in the Asia session?

The Tokyo core CPI had surged from an annual rate of 1.8% last October to 2.5% in January this year, highlighting the rising price pressures in Japan. However, February’s reading moderated lower to 2.2%, slowing from January’s 11-month high as it printed under market estimates of 2.3%. Despite showing some signs of easing, the latest result remains above the Bank of Japan’s 2% target for the fourth consecutive month, reinforcing a hawkish outlook on domestic monetary policy. Demand for the yen remained strong as USD/JPY hovered around 149.50 by midday in Asia.

What does it mean for the Europe & US sessions?

Consumer inflation, both headline and core, had accelerated from September through December in Germany. Headline CPI surged from an annual rate of 1.6% to 2.6% while the core jumped from 2.7% to 3.3%. However, inflationary pressures eased in January as both these metrics rose at a noticeably slower rate based on the preliminary estimates. Should the final result indicate price pressures moderating even lower, the Euro could face near-term headwinds.

After declining 0.2% in November, economic activity in Canada is expected to rebound in December with a growth of 0.3% over the previous month. Based on the preliminary estimates, sectors such as retail trade; manufacturing; and construction are anticipated to lead the expansion. However, the Loonie has come under intense pressure this week due to the tariffs slapped on Canadian imports into the U.S. with USD/CAD rallying more than 2.0% over the last couple of weeks. This currency pair broke above 1.4400 overnight and it looks to eclipse the 1.4500 level today.

The Dollar Index (DXY)

Key news events today

PCE Price Index (1:30 pm GMT)

Chicago PMI (2:45 pm GMT)

What can we expect from DXY today?

The PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – has shown the headline figure accelerating from September through December while the core remained unchanged at an annual rate of 2.8%. Both metrics continue to remain well above the Fed’s target of 2% and should January’s results come in hot once more, the dollar could see strong bids. Meanwhile, business activity in the Chicago area has been dire since the second half of 2022 with nearly every month indicating a contraction based on the Chicago PMI report. February’s PMI is expected to highlight the ongoing deterioration in this area, a result that could weigh on the greenback.

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 29 January.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and 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.
• December’s Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee will roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month and redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• In addition, the Committee will reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
• The next meeting runs from 18 to 19 March 2025.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

PCE Price Index (1:30 pm GMT)

Chicago PMI (2:45 pm GMT)

What can we expect from Gold today?

The PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – has shown the headline figure accelerating from September through December while the core remained unchanged at an annual rate of 2.8%. Both metrics continue to remain well above the Fed’s target of 2% and should January’s results come in hot once more, the dollar could see strong bids. Meanwhile, business activity in the Chicago area has been dire since the second half of 2022 with nearly every month indicating a contraction based on the Chicago PMI report. February’s PMI is expected to highlight the ongoing deterioration in this area, a result that could weigh on the greenback. Whatever the outcome, gold is likely to face higher volatility during the U.S. trading hours.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After hitting a high of 0.6400 last Friday, the Aussie ran out of steam and reversed sharply to dive over 2% this week. This currency pair slid lower towards 0.6220 as demand for the greenback intensified.

Central Bank Notes:

• The RBA reduced the cash rate by 25 basis points to bring it down to 4.10% on 18 January, 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

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

In a similar fashion to its Pacific neighbour, the Kiwi tumbled nearly 2.2% this week as it dropped to an overnight low of 0.5629. Extreme overhead pressures remain intact and this currency pair drifted towards 0.5600 at the beginning of the Asia session.

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

Tokyo Core CPI (11:30 pm GMT 27th February)

What can we expect from JPY today?

The Tokyo core CPI had surged from an annual rate of 1.8% last October to 2.5% in January this year, highlighting the rising price pressures in Japan. However, February’s reading moderated lower to 2.2%, slowing from January’s 11-month high as it printed under market estimates of 2.3%. Despite showing some signs of easing, the latest result remains above the Bank of Japan’s 2% target for the fourth consecutive month, reinforcing a hawkish outlook on domestic monetary policy. Demand for the yen remained strong as USD/JPY fell sharply towards 149 as Asian markets came online on Friday.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 24 January, by an 8-1 majority vote, to set 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 embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been at around 3% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned.
• Inflation expectations have risen moderately while underlying CPI inflation has been increasing gradually toward the price stability target of 2%. With wages continuing to rise, there has been an increase in moves to reflect higher costs, such as increased personnel expenses and distribution costs, in selling prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 March 2025.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

Germany CPI (Tentative)

What can we expect from EUR today?

Consumer inflation, both headline and core, had accelerated from September through December in Germany. Headline CPI surged from an annual rate of 1.6% to 2.6% while the core jumped from 2.7% to 3.3%. However, inflationary pressures eased in January as both these metrics rose at a noticeably slower rate based on the preliminary estimates. Should the final result indicate price pressures moderating even lower, the Euro could face near-term headwinds.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 30 January to mark the fourth 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 2.90%, 3.15% and 2.75% respectively.
• The disinflation process is well on track and inflation is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027.
• 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 Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 6 March 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?

As widely anticipated, Switzerland’s economy expanded by 0.2% in the final quarter of 2024 to register a second successive period of slower growth. It also marked the softest expansion since the second quarter of 2023 with sectors such as construction; trade and motor vehicle repair; and human health and social work displaying weak performances. Meanwhile, the mining and quarrying; and arts, entertainment, and recreation sectors contracted. Coupled with strong bids for the greenback, USD/CHF rallied 0.8% as it broke above the key threshold of 0.9000 overnight. This currency pair was floating around 0.8990 at the beginning of the Asia session and it should remain supported as the day progresses.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 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 20 March 2025.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

BoE Deputy Governor Ramsden’s Speech (7:00 am GMT)

What can we expect from GBP today?

Bank of England (BoE) Deputy Governor David Ramsden will deliver his speech on monetary policy in a world of geopolitical fragmentation at Stellenbosch University in South Africa where he could drop subtle clues regarding the outlook on future monetary policy. With demand for the greenback picking up strongly, Cable reversed off Thursday’s high at 1.2688 before diving under 1.2600. This currency pair was floating around 1.2600 as Asian markets came online on Friday.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 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.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• 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

GDP (1:30 pm GMT)

What can we expect from CAD today?

After declining 0.2% in November, economic activity in Canada is expected to rebound in December with a growth of 0.3% over the previous month. Based on the preliminary estimates, sectors such as retail trade; manufacturing; and construction are anticipated to lead the expansion. However, the Loonie has come under intense pressure this week due to the tariffs slapped on Canadian imports into the U.S. with USD/CAD rallying more than 2.0% over the last couple of weeks. This currency pair broke above 1.4400 overnight and it looks to eclipse the 1.4500 level today.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 3% on 29 January; this marked the sixth 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.
• Past cuts to interest rates have started to boost the economy and the recent strengthening in both consumption and housing activity is expected to continue. However, business investment remains weak while the outlook for exports is being supported by new export capacity for oil and gas.
• The Bank forecasts GDP growth will strengthen in 2025 and now projects GDP will grow by 1.8% in both 2025 and 2026, somewhat higher than potential growth.
• The labour market remains soft, with the unemployment rate at 6.7% in December. Job growth has strengthened in recent months, after lagging growth in the labour force for more than a year. Wage pressures, which have proven sticky, are showing some signs of easing.
• CPI inflation remains close to 2%, with some volatility due to the temporary suspension of the GST/HST on some consumer products. Shelter price inflation is still elevated but it is easing gradually, as expected.
• A broad range of indicators, including surveys of inflation expectations and the distribution of price changes among components of the CPI, suggests that underlying inflation is close to 2% with forecasts that CPI inflation will be around the 2% target over the next two years.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate a further 25 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The cumulative reduction in the policy rate since last June is substantial as lower interest rates are boosting household spending and the economy is expected to strengthen gradually and inflation to stay close to target. However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 12 March 2025.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Prices for crude oil experienced a shot in the arm as U.S. President Donald Trump revoked a licence granted to U.S. oil major Chevron Corporation to operate in Venezuela on Thursday, elevating supply concerns for this commodity. The Chevron licence revocation means the company will no longer be able to export Venezuelan crude and at the same time, if Venezuelan state oil company PDVSA exports oil previously exported by Chevron, U.S. refineries would be unable to buy it because of American sanctions. WTI oil surged more than 2.5% as it hit an overnight high of $70.54 per barrel and this bullish sentiment could remain in place on the final trading day of the week. This benchmark could very well buck a 5-week losing streak by the time U.S. markets come to a close.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 28 February 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially drop further to the pivot in the short term before bouncing from there and rising to the 1st resistance.

Pivot: 106.78
Supporting reasons: Identified as a pullback support, indicating a potential level where buyers could step in.

1st support: 106.14
Supporting reasons: Identified as a multi-swing low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 107.37
Supporting reasons: Identified as an overlap resistance that aligns with the 50% Fibonacci retracement, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a short-term rise toward the pivot before reversing and falling toward the 1st support.

Pivot: 1.0454
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressure could emerge.

1st support: 1.0325
Supporting reasons: Identified as an overlap support that aligns with the 161.8% Fibonacci extension that aligns with 161.8% Fibonacci extension, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 1.0532
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential level where price could face selling pressure.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 155.18
Supporting reasons: Identified as a multi-swing low support that aligns close to the 161.8% Fibonacci extension, indicating a potential area where price could rebound.

1st support: 154.03
Supporting reasons: Identified as a swing low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 156.09
Supporting reasons: Identified as a pullback resistance,  indicating a potential level where price could face selling pressure.

EUR/GBP:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 0.8239
Supporting reasons: Identified as a multi-swing low support that aligns with 161.8% Fibonacci extension, indicating a potential area where price could rebound.

1st support: 0.8224
Supporting reasons: Identified as a swing-low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 0.8272
Supporting reasons: Identified as a pullback resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a short-term rise toward the pivot before reversing and falling toward the 1st support.

Pivot: 1.2623
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressure could emerge.

1st support: 1.2521
Supporting reasons: Identified as a pullback support that aligns with the 50% Fibonacci retracement, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 1.2719
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a short-term rise toward the pivot before reversing and falling toward the 1st support.

Pivot: 190.68
Supporting reasons: Identified as an overlap resistance that aligns with the 50% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 187.10
Supporting reasons: Identified as a multi-swing low support, indicating a potential level where price could stabilize before continuing higher.

1st resistance: 193.06
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential level where price could face selling pressure.

USD/CHF:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a Bearish continuation toward the 1st support.

Pivot: 0.9000
Supporting reasons: Identified as an overlap resistance that aligns with the 38.2% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 0.8950
Supporting reasons: Identified as a pullback support,  indicating a potential level where price could face selling pressure.

1st resistance: 0.9048
Supporting reasons: Identified as a swing high resistance that aligns with the 161.8% Fibonacci extension, indicating a potential level where price could face selling pressure.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 148.83
Supporting reasons: Identified as a multi-swing low support that aligns with the 161.8% Fibonacci extension and the 78.6% Fibonacci projection, indicating a strong level where buyers could step in. 

1st support: 147.72
Supporting reasons: Identified as a support that aligns with the 161.8% Fibonacci extension, suggesting a potential area where price could stabilize before resuming its upward movement.

1st resistance: 150.97
Supporting reasons: Identified as a pullback resistance, indicating a potential level where price could face selling pressure.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.4407

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

1st support: 1.4317
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 1.4550
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish break through the pivot and could potentially fall towards the 1st support.

Pivot: 0.6240

Supporting reasons: Previously identified as a swing-low support where the strong bearish momentum has caused the price to break below this level.

1st support: 0.6185

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

1st resistance: 0.6260
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish break through the pivot and could potentially fall towards the 1st support.

Pivot: 0.5628

Supporting reasons: Previously identified as a swing-low support where the strong bearish momentum has caused the price to break below this level.

1st support: 0.5590

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

1st resistance: 0.5665

Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish break through the pivot and could potentially fall towards the 1st support.

Pivot: 43,364.19

Supporting reasons: Previously identified as a multi-swing-low support where the strong bearish momentum has caused the price to break below this level.

1st support: 42,879.91

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

1st resistance: 43,767.52

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

DE40 (DAX):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 22,163.30

Supporting reasons: Identified as a swing-low support that aligns with a confluence of Fibonacci levels i.e. a 23.6% retracement and a 78.6% projection, indicating a potential area where buying interests could pick up stage a minor rebound.

1st support: 21,695.40

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

1st resistance: 22,573.30
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: Bearish

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

Pivot: 5,840.10

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

1st support: 5,777.80

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

1st resistance: 5,910.50

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

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish break through the pivot and could potentially fall towards the 1st support.

Pivot: 84,295.47

Supporting reasons: Previously identified as a -swing-low support where the strong bearish momentum has caused the price to break below this level. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 76,679.93
Supporting reasons: Identified as a pullback support, indicating a potential level where the price could stabilize once more.

1st resistance: 86,424.63
Supporting reasons: Identified as an overlap 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 has made a bearish reversal close to the pivot and could potentially fall towards the 1st support.

Pivot: 2,401.82

Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 2,044.47
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 2,519.42
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 70.11

Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 67.22
Supporting reasons: Identified as a swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 71.08
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bullish
Price could potentially make a bearish reversal off the pivot and fall toward the 1st support.

Pivot: 2882.38
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressure could emerge.

1st support: 2829.20
Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 2923.62
Supporting reasons: Identified as an overlap resistance, indicating a potential level where price could face selling pressure.

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The post Friday 28th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 28 February 2025

What happened in the U.S. session?

After expanding at an annualized rate of 3.0% and 3.1% in the second and third quarters of 2024 respectively, the second estimate by the Bureau of Economic Analysis (BEA) pointed to a slowdown in economic activity in the final quarter. GDP increased at an annual rate of just 2.3% as fixed investment contracted for the first time since the first quarter of 2023 while both exports and imports contracted. Meanwhile, unemployment claims unexpectedly surged from 220k in the previous week to 242K in the latest reading, well above market expectations of 222k. marginally higher than the previous week’s figure of 219k. Despite a softer set of macroeconomic data, demand for the dollar intensified as the culmination of trade tariffs placed or to be placed on the trading partners of the U.S. functioned as a strong catalyst. The dollar index (DXY) jumped above 107 to hit an overnight high of 107.35.

What does it mean for the Asia Session?

The Tokyo core CPI had surged from an annual rate of 1.8% last October to 2.5% in January this year, highlighting the rising price pressures in Japan. However, February’s reading moderated lower to 2.2%, slowing from January’s 11-month high as it printed under market estimates of 2.3%. Despite showing some signs of easing, the latest result remains above the Bank of Japan’s 2% target for the fourth consecutive month, reinforcing a hawkish outlook on domestic monetary policy. Demand for the yen remained strong as USD/JPY fell sharply towards 149 as Asian markets came online.

The Dollar Index (DXY)

Key news events today

PCE Price Index (1:30 pm GMT)

Chicago PMI (2:45 pm GMT)

What can we expect from DXY today?

The PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – has shown the headline figure accelerating from September through December while the core remained unchanged at an annual rate of 2.8%. Both metrics continue to remain well above the Fed’s target of 2% and should January’s results come in hot once more, the dollar could see strong bids. Meanwhile, business activity in the Chicago area has been dire since the second half of 2022 with nearly every month indicating a contraction based on the Chicago PMI report. February’s PMI is expected to highlight the ongoing deterioration in this area, a result that could weigh on the greenback.

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 29 January.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and 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.
• December’s Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee will roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month and redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• In addition, the Committee will reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
• The next meeting runs from 18 to 19 March 2025.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

PCE Price Index (1:30 pm GMT)

Chicago PMI (2:45 pm GMT)

What can we expect from Gold today?

The PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – has shown the headline figure accelerating from September through December while the core remained unchanged at an annual rate of 2.8%. Both metrics continue to remain well above the Fed’s target of 2% and should January’s results come in hot once more, the dollar could see strong bids. Meanwhile, business activity in the Chicago area has been dire since the second half of 2022 with nearly every month indicating a contraction based on the Chicago PMI report. February’s PMI is expected to highlight the ongoing deterioration in this area, a result that could weigh on the greenback. Whatever the outcome, gold is likely to face higher volatility during the U.S. trading hours.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After hitting a high of 0.6400 last Friday, the Aussie ran out of steam and reversed sharply to dive over 2% this week. This currency pair slid lower towards 0.6220 as demand for the greenback intensified.

Central Bank Notes:

• The RBA reduced the cash rate by 25 basis points to bring it down to 4.10% on 18 January, 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

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

In a similar fashion to its Pacific neighbour, the Kiwi tumbled nearly 2.2% this week as it dropped to an overnight low of 0.5629. Extreme overhead pressures remain intact and this currency pair drifted towards 0.5600 at the beginning of the Asia session.

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

Tokyo Core CPI (11:30 pm GMT 27th February)

What can we expect from JPY today?

The Tokyo core CPI had surged from an annual rate of 1.8% last October to 2.5% in January this year, highlighting the rising price pressures in Japan. However, February’s reading moderated lower to 2.2%, slowing from January’s 11-month high as it printed under market estimates of 2.3%. Despite showing some signs of easing, the latest result remains above the Bank of Japan’s 2% target for the fourth consecutive month, reinforcing a hawkish outlook on domestic monetary policy. Demand for the yen remained strong as USD/JPY fell sharply towards 149 as Asian markets came online on Friday.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 24 January, by an 8-1 majority vote, to set 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 embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been at around 3% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned.
• Inflation expectations have risen moderately while underlying CPI inflation has been increasing gradually toward the price stability target of 2%. With wages continuing to rise, there has been an increase in moves to reflect higher costs, such as increased personnel expenses and distribution costs, in selling prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 March 2025.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

Germany CPI (Tentative)

What can we expect from EUR today?

Consumer inflation, both headline and core, had accelerated from September through December in Germany. Headline CPI surged from an annual rate of 1.6% to 2.6% while the core jumped from 2.7% to 3.3%. However, inflationary pressures eased in January as both these metrics rose at a noticeably slower rate based on the preliminary estimates. Should the final result indicate price pressures moderating even lower, the Euro could face near-term headwinds.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 30 January to mark the fourth 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 2.90%, 3.15% and 2.75% respectively.
• The disinflation process is well on track and inflation is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027.
• 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 Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 6 March 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?

As widely anticipated, Switzerland’s economy expanded by 0.2% in the final quarter of 2024 to register a second successive period of slower growth. It also marked the softest expansion since the second quarter of 2023 with sectors such as construction; trade and motor vehicle repair; and human health and social work displaying weak performances. Meanwhile, the mining and quarrying; and arts, entertainment, and recreation sectors contracted. Coupled with strong bids for the greenback, USD/CHF rallied 0.8% as it broke above the key threshold of 0.9000 overnight. This currency pair was floating around 0.8990 at the beginning of the Asia session and it should remain supported as the day progresses.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 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 20 March 2025.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

BoE Deputy Governor Ramsden’s Speech (7:00 am GMT)

What can we expect from GBP today?

Bank of England (BoE) Deputy Governor David Ramsden will deliver his speech on monetary policy in a world of geopolitical fragmentation at Stellenbosch University in South Africa where he could drop subtle clues regarding the outlook on future monetary policy. With demand for the greenback picking up strongly, Cable reversed off Thursday’s high at 1.2688 before diving under 1.2600. This currency pair was floating around 1.2600 as Asian markets came online on Friday.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 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.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• 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

GDP (1:30 pm GMT)

What can we expect from CAD today?

After declining 0.2% in November, economic activity in Canada is expected to rebound in December with a growth of 0.3% over the previous month. Based on the preliminary estimates, sectors such as retail trade; manufacturing; and construction are anticipated to lead the expansion. However, the Loonie has come under intense pressure this week due to the tariffs slapped on Canadian imports into the U.S. with USD/CAD rallying more than 2.0% over the last couple of weeks. This currency pair broke above 1.4400 overnight and it looks to eclipse the 1.4500 level today.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 3% on 29 January; this marked the sixth 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.
• Past cuts to interest rates have started to boost the economy and the recent strengthening in both consumption and housing activity is expected to continue. However, business investment remains weak while the outlook for exports is being supported by new export capacity for oil and gas.
• The Bank forecasts GDP growth will strengthen in 2025 and now projects GDP will grow by 1.8% in both 2025 and 2026, somewhat higher than potential growth.
• The labour market remains soft, with the unemployment rate at 6.7% in December. Job growth has strengthened in recent months, after lagging growth in the labour force for more than a year. Wage pressures, which have proven sticky, are showing some signs of easing.
• CPI inflation remains close to 2%, with some volatility due to the temporary suspension of the GST/HST on some consumer products. Shelter price inflation is still elevated but it is easing gradually, as expected.
• A broad range of indicators, including surveys of inflation expectations and the distribution of price changes among components of the CPI, suggests that underlying inflation is close to 2% with forecasts that CPI inflation will be around the 2% target over the next two years.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate a further 25 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The cumulative reduction in the policy rate since last June is substantial as lower interest rates are boosting household spending and the economy is expected to strengthen gradually and inflation to stay close to target. However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 12 March 2025.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Prices for crude oil experienced a shot in the arm as U.S. President Donald Trump revoked a licence granted to U.S. oil major Chevron Corporation to operate in Venezuela on Thursday, elevating supply concerns for this commodity. The Chevron licence revocation means the company will no longer be able to export Venezuelan crude and at the same time, if Venezuelan state oil company PDVSA exports oil previously exported by Chevron, U.S. refineries would be unable to buy it because of American sanctions. WTI oil surged more than 2.5% as it hit an overnight high of $70.54 per barrel and this bullish sentiment could remain in place on the final trading day of the week. This benchmark could very well buck a 5-week losing streak by the time U.S. markets come to a close.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 28 February 2025 first appeared on IC Markets | Official Blog.

Tech Stocks Hammered on Tariff Update – Nasdaq Down 2.8%

US tech stocks took a hammering in trading yesterday as President Trump announced that tariffs will proceed in March, while Nvidia delivered a weaker-than-expected forecast in its quarterly update. The Nasdaq led the decline, closing 2.78% lower, followed by the S&P, which fell 1.59%, and the Dow, which closed 0.45% down.

The dollar surged on the tariff news, with the DXY gaining 0.67% on the day to reach 107.24. Meanwhile, treasury yields were more muted, with the 2-year yield rising just 0.3 basis points to 4.075% and the 10-year increasing by 2.8 basis points to 4.283%.

Oil prices jumped after President Trump revoked Chevron’s operating licence in Venezuela, with Brent crude rising 2.08% to $74.04 per barrel and WTI climbing 2.54% to $70.35. Gold fell in line with the stronger dollar and profit-taking flows, dropping 1.68% on the day to $2,867.63.

Dollar Leaps Back into Favour

The dollar recorded its strongest increase in two months yesterday as President Trump confirmed that tariffs would go ahead as planned in the coming days. The DXY surged 0.7%, climbing from near 106.50 to above 107.25, pushing several major currencies towards recent lows after having only recently hit annual highs.

Geopolitical developments were the key driver yesterday, but the focus will soon shift to fundamentals, with a crucial US inflation update due early in the New York session. If inflation data exceeds expectations and reinforces concerns about tariff-induced price pressures, the dollar could rise further and more aggressively.

Inflation Data in Focus Today

Traders and central banks will be closely watching inflation data updates today, with key figures set to be released across all three trading sessions.

In the Asian session, attention will be on Japanese markets as the Tokyo Core CPI data is released early in the day, with markets expecting a 2.3% year-on-year increase. The London session will see the release of German preliminary CPI data, with figures arriving throughout the morning as individual states report separately.

However, the main event will come with the opening of New York markets, when the Federal Reserve’s preferred inflation gauge, the PCE Price Index, is released. Markets anticipate a 0.3% increase, and the result is expected to dominate sentiment. Canadian GDP data will be published at the same time, but the US figure is likely to take precedence. Later in the session, the Chicago PMI numbers are also due, but again, the PCE data is expected to be the key market mover—especially if it deviates from expectations.

The post General Market Analysis – 28/02/25 first appeared on IC Markets | Official Blog.

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