US Stocks Push Higher After Fed Minutes – S&P Up 0.25%

The major US stock indices edged higher again yesterday as investors digested the latest Federal Reserve meeting minutes and further updates from President Trump. The S&P 500 notched up another record close, adding 0.24% on the day, while the Dow and Nasdaq also moved higher, closing up 0.16% and 0.07% respectively.

US Treasury yields fell following the Fed minutes, with the rate-sensitive two-year dropping 3.8 basis points to 4.268%, and the benchmark 10-year falling 1.8 basis points to 4.533%. Oil prices continued to rise after comments from President Trump calling for a deal, with Brent crude up 0.32% to $76.08 and WTI gaining 0.46% to $72.18. Meanwhile, gold drifted lower, losing 0.09% to close the New York session at $2,932.80.

Gold Remains at a Pivotal Level

Gold is once again trading near all-time record levels, with the market divided on its next move. However, there is broad consensus that the next shift will be significant. Global market uncertainty has driven the precious metal to unprecedented highs, but investors are now seeking further catalysts to push it into fresh topside ranges and challenge the next psychological barrier at $3,000 an ounce.

Some analysts are questioning how much uncertainty has already been priced in and whether, as a clearer picture of the ‘new world’ global market under the Trump administration emerges, we might see profit-taking and a potential correction following the strong gains of recent months.

Event Calendar to Spur More Trading Today

The Asian session is likely to be the highlight in terms of macroeconomic updates and trading opportunities today. Australian markets will once again be the focus of investor attention, with employment data due early in the day. The market expects a 20,000 increase in jobs last month.

Just 30 minutes later, attention will turn to China for the latest Loan Prime Rate updates from the Bank of China, with rates expected to remain steady at 3.10% for the one-year term and 3.65% for the five-year term.

The European session offers little of significance to move the markets, but in the US, the usual weekly unemployment claims data and the Philly Fed Manufacturing Index will be released shortly after the New York open. Later in the session, US crude oil inventory numbers are also scheduled for release.

The post General Market Analysis – 20/02/25 first appeared on IC Markets | Official Blog.

The Australian Bureau of Statistics is set to release the latest employment data midway through the Asian trading session today, and foreign exchange traders are expecting to see some strong moves in the currency as it sits close to key technical levels. The market anticipates an increase of around 20,000 jobs over the last month, with the unemployment rate creeping slightly higher to 4.1% from 4.0%. Any significant deviation from these figures could result in a sharp movement in the Aussie Dollar.

The currency is sitting close to annual highs despite a rate cut from the Reserve Bank on Tuesday. A stronger employment change or a drop in the expected unemployment rate could see it break through resistance levels and reach new annual highs. Conversely, a weaker print or an increase in the unemployment rate would likely see it fall back into recent trading ranges.

Resistance Levels:

• Resistance 2: 0.6550 – Daily 200-Day Moving Average
• Resistance 1: 0.6374 – 2025 High and Trendline Resistance

Support Levels:

• Support 1: 0.6314 – Hourly 200-Day Moving Average
• Support 2: 0.6085 – 2025 Low and Trendline Support

The post Trade the Aussie Dollar on the Australian Employment Data first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.34%, Shanghai Composite up 0.65%, Hang Seng down 0.33% ASX down 0.76%
• Commodities : Gold at $2952.35 (0.13%), Silver at $33.35 (0.28%), Brent Oil at $76.4 (0.2%), WTI Oil at $72.7 (0.3%)
• Rates : US 10-year yield at 4.547, UK 10-year yield at 4.5575, Germany 10-year yield at 2.490

News & Data:

• (CAD) CPI m/m  0.1% to 0.1% expected
• (CAD) Median CPI y/y  2.7% to 2.5% expected
• (CAD) Trimed CPI y/y  2.7% to 2.6%expected

Markets Update:

Asia-Pacific stocks showed mixed performance on Wednesday after U.S. President Donald Trump proposed 25% tariffs on autos, semiconductors, and pharmaceutical imports. Japan’s Nikkei 225 dropped 0.38%, while the Topix index fell 0.31% as the country reported a two-year high trade deficit. However, business sentiment among Japanese manufacturers improved for the second consecutive month, with the Reuters Tankan index rising to 3 from 2 in January.

In South Korea, the Kospi surged 1.83%, and the small-cap Kosdaq gained 0.62%. Mainland China’s CSI 300 rose 0.42% in volatile trading, while Hong Kong’s Hang Seng declined 0.33%. Indian markets rebounded, with the Nifty 50 up 0.21% and the BSE Sensex climbing 0.38%. Meanwhile, Australia’s S&P/ASX 200 dropped 0.73% to 8,419.20 after the central bank cut interest rates by 25 basis points to 4.10%, marking its first reduction since November 2020.

New Zealand’s central bank cut interest rates by 50 basis points to 3.75% in line with expectations, marking its fourth consecutive cut amid slowing economic growth. Following the decision, the New Zealand dollar weakened 0.33% to 0.5719 against the U.S. dollar.

In the U.S., all three major indexes closed higher. The S&P 500 gained 0.24% to a record 6,129.58 after briefly touching 6,129.63. The Nasdaq Composite inched up 0.07% to 20,041.26, while the Dow Jones Industrial Average added 10 points to close at 44,556.34. The energy sector led the S&P 500 with a 1.9% gain, and tech stocks also advanced.

Upcoming Events: 

• 01:30 PM GMT – USD Housing Starts
• 01:30 PM GMT – USD Building Permits
• 07:00 PM GMT – USD FOMC Meeting Minutes

The post Wednesday 19th February 2025: Asia-Pacific Markets Mixed as U.S. Tariff Plans Weigh on Sentiment first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 19 February 2025

What happened in the Asia session?

As widely expected, the RBNZ moved ahead with its fourth consecutive rate cut by making a 50-basis point (bps) reduction in its Official Cash Rate (OCR). This latest move marked the third successive 50-bps cut since this central bank started its cutting cycle in August 2024. The OCR is now at its lowest level since late 2022 amidst rising unemployment, contracting economic growth, and cooling inflation. The Kiwi initially dived following the release of the statement, tumbling nearly 0.5% before reversing sharply. During his press conference, RBNZ Governor Adrian Orr expressed confidence that domestic inflation pressures would continue to ease and indicated more rate cuts might be on the horizon. He projected another 50 basis points reduction by mid-2025, around July, in two 25-bps steps which seems to have tempered market expectations of aggressive rate cuts this year.

What does it mean for the Europe & US sessions?

Following Tuesday’s Labour Force report which highlighted a mixed result, all focus will now be on consumer inflation in the United Kingdom. After moderating slightly lower in December 2024, headline and core CPI are expected to accelerate sharply in January. Headline CPI is anticipated to rise from an annual rate of 2.5% in the previous month to 2.8% while the core is expected to jump from 3.2% to 3.7%. Should inflationary pressures exceed market forecasts, demand for the pound will likely surge before the start of the European trading hours.

The Dollar Index (DXY)

Key news events today

FOMC Meeting Minutes (7:00 pm GMT)

What can we expect from DXY today?

The minutes from the FOMC meeting that took place from 28th to 29th January will be released later today. Markets will be provided with in-depth insights into the economic and financial conditions that influenced the Board of Governors of the Federal Reserve System’s unanimous vote to maintain the Federal Funds Rate in a target range of 4.25 to 4.50%. The greenback could receive further tailwinds in the latter part of Wednesday.

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 Bullish

Gold (XAU)

Key news events today

FOMC Meeting Minutes (7:00 pm GMT)

What can we expect from Gold today?

The minutes from the FOMC meeting that took place from 28th to 29th January will be released later today. Markets will be provided with in-depth insights into the economic and financial conditions that influenced the Board of Governors of the Federal Reserve System’s unanimous vote to maintain the Federal Funds Rate in a target range of 4.25 to 4.50%. Gold will likely experience some degree of volatility as the minutes are dropped.

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 making its first rate cut since November 2020 on Tuesday, the Aussie fell as low as 0.6334 on Tuesday. Combined with the RBNZ’s latest jumbo rate cut of 50 basis points (bps) on Wednesday, this currency pair will likely extend its downtrend as strong bearish sentiment for the Kiwi will also drag down the Aussie.

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

RBNZ Interest Rate Decision (1:00 am GMT)

RBNZ Press Conference (2:00 am GMT)

What can we expect from NZD today?

As widely expected, the RBNZ moved ahead with its fourth consecutive rate cut by making a 50-basis point (bps) reduction in its Official Cash Rate (OCR). This latest move marked the third successive 50-bps cut since this central bank started its cutting cycle in August 2024. The OCR is now at its lowest level since late 2022 amidst rising unemployment, contracting economic growth, and cooling inflation. The Kiwi initially dived following the release of the statement, tumbling nearly 0.5% before reversing sharply. During his press conference, RBNZ Governor Adrian Orr expressed confidence that domestic inflation pressures would continue to ease and indicated more rate cuts might be on the horizon. He projected another 50 basis points reduction by mid-2025, around July, in two 25-bps steps which seems to have tempered market expectations of aggressive rate cuts this year.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Demand for the greenback picked up on Tuesday as USD/JPY reversed off Tuesday’s lows at 151.20 to climb above 152. This currency pair was hovering around 151.90 at the beginning of the Asia session on Wednesday but should remain elevated as the day progresses.

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

No major news events.

What can we expect from EUR today?

Despite the ZEW Economic Sentiment index reporting a significant improvement for both the Euro Area and Germany on Tuesday, demand for the Euro remained frail as it hit a low of 1.0421. This currency pair found its footing around 1.0445 as Asian markets came online on Wednesday but overhead pressures remain intact.

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 Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the franc waned at the beginning of this week as USD/CHF reversed off Monday’s low of 0.8970 to rise strongly above the threshold of 0.9000. This currency pair reached an overnight high of 0.9038 and looks set to continue its upward momentum on Wednesday.

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

CPI (7:00 am GMT)

What can we expect from GBP today?

Following Tuesday’s Labour Force report which highlighted a mixed result, all focus will now be on consumer inflation. After moderating slightly lower in December 2024, headline and core CPI are expected to accelerate sharply in January. Headline CPI is anticipated to rise from an annual rate of 2.5% in the previous month to 2.8% while the core is expected to jump from 3.2% to 3.7%. Should inflationary pressures exceed market forecasts, demand for the pound will likely surge before the start of the European trading hours.

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

No major news events.

What can we expect from CAD today?

Despite consumer inflation rising noticeably in January as measured by median/trimmed/common-CPI, demand for the Loonie was tepid. USD/CAD stabilized at around 1.4150 at the beginning of the week before edging higher. This currency pair continued its slow but steady upward trend as it hit an overnight high of 1.4212.

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

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

Crude oil has seen a strong start to the week as prices rose 2% over the last couple of days as supply disruptions mounted in Russia’s southern Krasnodar region, reducing oil flows from Kazakhstan to world markets by Western producers while early negotiations between the U.S. and Russia to end the war in Ukraine capped gains. WTI oil hit an overnight high of $71.83 per barrel and this benchmark should remain elevated for most of Wednesday. Moving over to U.S. inventories, the API stockpiles have risen pronouncedly over the past three weeks which is a sign of weaker demand. Should these stockpiles continue to build even further, the recent gain in crude oil could be limited.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 19 February 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 reversal off the pivot and drop toward the 1st support.

Pivot: 107.41

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: 106.59
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 108.41
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any 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 rise toward the 1st resistance.

Pivot: 1.0420

Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound. The presence of the green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 1.0325

Supporting reasons: Identified as an overlap support that aligns with a 78.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 1.0517
Supporting reasons:  Identified as a multis-wing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 159.45

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

1st support: 157.72

Supporting reasons: Identified as a pullback support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where the price could find support once more.

1st resistance: 160.96
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 0.8272

Supporting reasons: Identified as an overlap support that aligns with the 127.2% Fibonacci extension, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 0.8224

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

1st resistance: 0.8310
Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement,  indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.2516

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

1st support: 1.2365

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

1st resistance: 1.2721
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 193.03

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

1st support: 189.61
Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 195.88
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 0.9058

Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.8971
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could find support once again.

1st resistance: 0.9091
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 151.23

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

1st support: 149.65
Supporting reasons: Identified as a swing-low support that aligns close to a 127.2% Fibonacci extension, indicating a potential level where the price could find support once more.

1st resistance: 153.25
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.

USD/CAD:

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: 1.4099
Supporting reasons: Identified as a swing-low support that aligns close to a 127.2% Fibonacci extension, indicating a potential level where buying interests could pick up to stage a minor rebound.

1st support: 1.4019
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 1.4213
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 0.6377

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

1st support: 0.6306

Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6416
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.5693

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

1st support: 0.5665

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

1st resistance: 0.5755

Supporting reasons: Identified as a pullback 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: 44,148.32

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 78.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 43,835.30

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

1st resistance: 44,978.36

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: 22,554.00

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

1st support: 21,927.70

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

1st resistance: 23,273.02
Supporting reasons: Identified as a resistance that aligns with a 100% 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: Bullish

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

Pivot: 6,099.00

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

1st support: 6,072.30

Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 6,176.46

Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 98,853.40

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

1st support: 92,857.02
Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 101,963.41
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.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 2,856.71

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

1st support: 2,472.17
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 again.

1st resistance: 3,028.21
Supporting reasons: Identified as a pullback 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: 71.77

Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential level where selling pressures could intensify. 

1st support: 69.40
Supporting reasons: Identified as a swing-low support that aligns with a confluence of Fibonacci levels i.e. two 161.8% extensions, indicating a key level where the price could stabilize once more.

1st resistance: 73.78
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

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

Pivot: 2,936.87

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

1st support: 2,882.27

Supporting reasons: Identified as an overlap support that aligns close to a 100% Fibonacci projection, indicating a potential level where the price could find support once again.

1st resistance: 2,979.04

Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

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The post Wednesday 19th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 19 February 2025

In a surprise twist, the New York Empire State Manufacturing Index surged 18.3 points to +5.7 in February, easily surpassing market expectations of -1 and signalling a slight rebound in business activity across New York State. Sub-indices such as new orders and shipments saw moderate growth, while employment levels declined. On the inflation front, input costs rose at the fastest pace in nearly two years, while selling prices also increased noticeably. Finally, business optimism about the outlook dropped significantly, although firms expect conditions to improve over the next six months. This improvement in manufacturing activity provided a lift for the dollar index (DXY) as it hit an overnight high of 107.12 and the upward momentum should continue to grow on Wednesday.

What does it mean for the Asia Session?

As widely expected, the RBNZ moved ahead with its fourth consecutive rate cut by making a 50-basis point (bps) reduction in its Official Cash Rate (OCR). This latest move marked the third successive 50-bps cut since this central bank started its cutting cycle in August 2024. The OCR is now at its lowest level since late 2022 amidst rising unemployment, contracting economic growth, and cooling inflation. The Kiwi dived sharply following the release of the statement, tumbling nearly 0.5%. RBNZ Governor Adrian Orr’s press conference commences at 4:30 am GMT and should he convey further dovish outlook on future monetary policy action, downward pressures on the Kiwi will likely intensify.

The Dollar Index (DXY)

Key news events today

FOMC Meeting Minutes (7:00 pm GMT)

What can we expect from DXY today?

The minutes from the FOMC meeting that took place from 28th to 29th January will be released later today. Markets will be provided with in-depth insights into the economic and financial conditions that influenced the Board of Governors of the Federal Reserve System’s unanimous vote to maintain the Federal Funds Rate in a target range of 4.25 to 4.50%. The greenback could receive further tailwinds in the latter part of Wednesday.

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 Bullish

Gold (XAU)

Key news events today

FOMC Meeting Minutes (7:00 pm GMT)

What can we expect from Gold today?

The minutes from the FOMC meeting that took place from 28th to 29th January will be released later today. Markets will be provided with in-depth insights into the economic and financial conditions that influenced the Board of Governors of the Federal Reserve System’s unanimous vote to maintain the Federal Funds Rate in a target range of 4.25 to 4.50%. Gold will likely experience some degree of volatility as the minutes are dropped.

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 making its first rate cut since November 2020 on Tuesday, the Aussie fell as low as 0.6334 on Tuesday. Combined with the RBNZ’s latest jumbo rate cut of 50 basis points (bps) on Wednesday, this currency pair will likely extend its downtrend as strong bearish sentiment for the Kiwi will also drag down the Aussie.

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

RBNZ Interest Rate Decision (3:30 am GMT)

RBNZ Press Conference (4:30 am GMT)

What can we expect from NZD today?

As widely expected, the RBNZ moved ahead with its fourth consecutive rate cut by making a 50-basis point (bps) reduction in its Official Cash Rate (OCR). This latest move marked the third successive 50-bps cut since this central bank started its cutting cycle in August 2024. The OCR is now at its lowest level since late 2022 amidst rising unemployment, contracting economic growth, and cooling inflation. The Kiwi dived sharply following the release of the statement, tumbling nearly 0.5%. RBNZ Governor Adrian Orr’s press conference commences at 4:30 am GMT and should he convey further dovish outlook on future monetary policy action, downward pressures on the Kiwi will likely intensify.

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.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to ease monetary policy restraint further.
• The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR. If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025.
• The next meeting is on 9 April 2025.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Demand for the greenback picked up on Tuesday as USD/JPY reversed off Tuesday’s lows at 151.20 to climb above 152. This currency pair was hovering around 151.90 at the beginning of the Asia session on Wednesday but should remain elevated as the day progresses.

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

No major news events.

What can we expect from EUR today?

Despite the ZEW Economic Sentiment index reporting a significant improvement for both the Euro Area and Germany on Tuesday, demand for the Euro remained frail as it hit a low of 1.0421. This currency pair found its footing around 1.0445 as Asian markets came online on Wednesday but overhead pressures remain intact.

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 Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the franc waned at the beginning of this week as USD/CHF reversed off Monday’s low of 0.8970 to rise strongly above the threshold of 0.9000. This currency pair reached an overnight high of 0.9038 and looks set to continue its upward momentum on Wednesday.

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

CPI (7:00 am GMT)

What can we expect from GBP today?

Following Tuesday’s Labour Force report which highlighted a mixed result, all focus will now be on consumer inflation. After moderating slightly lower in December 2024, headline and core CPI are expected to accelerate sharply in January. Headline CPI is anticipated to rise from an annual rate of 2.5% in the previous month to 2.8% while the core is expected to jump from 3.2% to 3.7%. Should inflationary pressures exceed market forecasts, demand for the pound will likely surge before the start of the European trading hours.

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

No major news events.

What can we expect from CAD today?

Despite consumer inflation rising noticeably in January as measured by median/trimmed/common-CPI, demand for the Loonie was tepid. USD/CAD stabilized at around 1.4150 at the beginning of the week before edging higher. This currency pair continued its slow but steady upward trend as it hit an overnight high of 1.4212.

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

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

Crude oil has seen a strong start to the week as prices rose 2% over the last couple of days as supply disruptions mounted in Russia’s southern Krasnodar region, reducing oil flows from Kazakhstan to world markets by Western producers while early negotiations between the U.S. and Russia to end the war in Ukraine capped gains. WTI oil hit an overnight high of $71.83 per barrel and this benchmark should remain elevated for most of Wednesday. Moving over to U.S. inventories, the API stockpiles have risen pronouncedly over the past three weeks which is a sign of weaker demand. Should these stockpiles continue to build even further, the recent gain in crude oil could be limited.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 19 February 2025 first appeared on IC Markets | Official Blog.

Muted Start to the Trading Week for US Markets – S&P Up 0.24% to New High

US stock markets experienced a relatively quiet start to the trading week after a long weekend, as investors looked ahead to Fed minutes and further geopolitical uncertainty. The S&P managed to push higher to record a fresh closing high, finishing the day up 0.24%, while the Dow and Nasdaq both ended close to flat, up 0.02% and 0.07%, respectively.

Treasury yields saw more movement, appreciating across the curve, with the 2-year yield up 4.7 basis points to 4.306% and the 10-year yield up 7.4 basis points to 4.550%. The dollar also recovered more of last week’s losses, with the DXY up 0.23% to 107.05.

Oil prices jumped as traders priced in issues with the Ukrainian peace deal, with Brent up 0.78% to $75.81 and WTI rising 1.51% to $71.81. Gold pushed higher again on further tariff uncertainty, closing up 1.26% at $2,933.72, once again nearing record levels.

Markets Poised for Big Moves

Some investors believe we could see significant market movements over the coming months, with various products trading at sensitive levels that support this assumption. On one hand, global stock markets continue to push higher and close at record levels—the S&P last night and the DAX the night before are good examples. At the same time, gold, the world’s favourite haven trade, is also hitting record highs, leading some market participants to believe that something has to give—and when it does, it could be messy.

Investors are now seeking greater certainty, particularly from the new US administration. If policy implementation begins in the next few months, expect some of the aforementioned trades to either correct sharply or trend higher.

Central Banks and Geopolitics in Focus Today

It has been a relatively quiet start to the trading week so far, despite a rate cut from the RBA yesterday and some key data updates, but traders expect volatility to pick up today.

The Asian market will initially focus on Australia’s Wage Price Index data, before shifting across the Tasman to New Zealand for the RBNZ rate call and press conference. The European session brings another round of key UK data, with CPI figures expected to show a 2.8% year-on-year increase. The wait continues until late in the US trading session for the release of the FOMC Meeting Minutes. With central banks and geopolitical factors in focus, markets are bracing for an eventful session ahead.

The post General Market Analysis – 19/02/25 first appeared on IC Markets | Official Blog.

Kiwi dollar traders anticipate a significant increase in volatility today as the currency comes into sharp focus ahead of the Reserve Bank of New Zealand’s latest interest rate decision. The market is fully pricing in a 50-basis-point rate cut, which has been well signposted by Reserve Bank Governor Adrian Orr. Any deviation from this expectation is likely to trigger substantial movement in the ‘flightless bird’.

As always, if the decision aligns with market forecasts, price action will be driven by the forward guidance provided in the accompanying statements and press conference. FX traders are bracing for strong moves, with NZD/USD currently hovering near key technical levels.

The Kiwi has been on the back foot for most of the year as the USD strengthened, but it has shown some recovery since hitting multi-year lows at the start of this month. It now sits near short-term resistance levels on the hourly chart, while also remaining relatively close to long-term support. A surprise in either the rate decision or policy guidance could trigger a significant breakout in either direction.

The market expects the RBNZ to maintain a dovish stance, with further rate cuts anticipated later in the year, albeit at a smaller scale. A less dovish tone could see recent highs quickly surpassed, whereas a more dovish stance could lead to a swift retest of early February’s lows.

Resistance 2: 0.5750 – 2025 High

Resistance 1: 0.5738 – Trendline Resistance

Support 1: 0.5676 – 200 Day Moving Average

Support 2: 0.5515 – 2025 Low and Trendline Support

The post Trade the Kiwi on the RBNZ Rate Decision first appeared on IC Markets | Official Blog.

The post Ex-Dividend 19/2/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.44%, Shanghai Composite down 0.25%, Hang Seng up 1.33% ASX down 0.66%
• Commodities : Gold at $2925.35 (0.53%), Silver at $33.95 (0.28%), Brent Oil at $75.4 (0.2%), WTI Oil at $71.7 (1.03%)
• Rates : US 10-year yield at 4.517, UK 10-year yield at 4.5275, Germany 10-year yield at 2.483

News & Data:

• (CAD) Housing Starts  240K to 251K expected

Markets Update:

Asia-Pacific markets mostly rose on Tuesday after Chinese President Xi Jinping expressed support for the private sector, encouraging businesses to showcase their strengths. Australia’s S&P/ASX 200 fell 0.58% following the Reserve Bank of Australia’s decision to cut interest rates by 25 basis points to 4.1%, the first cut in over four years. The Australian dollar strengthened 0.17% to 0.6342, while 10-year government bond yields dropped nearly 20 basis points since January 13 to 4.45%.

Japan’s Nikkei 225 climbed 0.66%, while the broader Topix index rose 0.61%. South Korea’s Kospi gained 0.59%, and the small-cap Kosdaq edged up 0.15%. China’s CSI 300 reversed losses to rise 0.4%, and Hong Kong’s Hang Seng index surged 2.05%, with the Hang Seng tech index jumping 3.04%. The gains followed Xi’s rare closed-door meeting, which reassured investors after the index’s over 2% drop on Monday.

India’s markets opened lower after the Nifty 50 snapped an eight-day losing streak with modest gains in the previous session. The index was down 0.2%, while the BSE Sensex declined 0.15%. Singapore is set to present its first budget under Prime Minister Lawrence Wong later in the day, with analysts anticipating increased support for households and businesses as the country prepares for a general election in November.

U.S. markets were closed for a public holiday, but stock futures were higher. Dow Jones Industrial Average futures gained 106 points or 0.2%, while S&P 500 and Nasdaq 100 futures each advanced 0.2%.

Upcoming Events: 

• 01:30 PM GMT – CAD CPI m/m
• 01:30 PM GMT – CAD Median CPI y/y
• 01:30 PM GMT – CAD Trimmed CPI y/my

The post Tuesday 18th February 2025: Asia-Pacific Markets Rise as China Signals Private Sector Support first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 18 February 2025

What happened in the Asia session?

As widely expected, the RBA moved ahead with its first interest rate cut making a 25-basis point (bps) reduction in its Cash Rate to bring it down to 4.10%. With inflation falling substantially since its peak in 2024 and private demand growth looking subdued, inflation is moving sustainably towards the target range of 2 to 3%. The Aussie initially spiked as high as 0.6367 before reversing sharply to fall towards 0.6330 by midday in Asia.

What does it mean for the Europe & US sessions?

The U.K. will release its Labour Force report where the claimant count is expected to spike from 700 in the previous month to 10K in January while the unemployment rate is forecasted to edge upwards from 4.4% to 4.5%. Should the labour market show significant signs of deterioration, the Pound is likely to face near-term headwinds. Later on, Bank of England (BoE) Governor Andrew Bailey will be participating in a panel discussion titled “Preserving and enhancing open financial markets” at an event hosted by Bruegel in Brussels. Following the decision to reduce the Official Bank Rate in early February, traders will be looking for further insights and clues from this central bank chief on the outlook for future monetary policy action.

The ZEW Economic Sentiment index for the Euro Area continues to highlight concerns and uncertainty in this region, particularly due to Germany’s sluggish GDP growth, rising inflationary pressures, and political instability. This index only rose by one point to 18 in January but February’s forecast points to a much stronger reading of 24.3. Should the ZEW sentiment exceed market expectations, the Euro could receive a strong tailwind during the European trading hours.

Consumer inflation in Canada has moderated significantly lower over the past few months as measured by median/trimmed/common-CPI. However, January’s estimates point to a slight increase in price pressures and should the latest CPI prints come in hot, the Loonie will likely receive a strong boost – a move that would heap overhead pressures on USD/CAD.

The Dollar Index (DXY)

Key news events today

Empire State Manufacturing Index (1:30 pm GMT)

What can we expect from DXY today?

The New York Empire State Manufacturing Index tumbled to -12.6 in January, falling from 2.1 in the previous month as it missed the forecasts of 3 increase. This marked a return to contraction for New York state’s manufacturing activity at the steepest rate since May 2024. February’s forecast points to a second consecutive month of contraction but at a much slower pace. Should this sector deteriorate more than market expectations, it could trigger a strong sell-off in the dollar.

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 Bullish

Gold (XAU)

Key news events today

Empire State Manufacturing Index (1:30 pm GMT)

What can we expect from Gold today?

The New York Empire State Manufacturing Index tumbled to -12.6 in January, falling from 2.1 in the previous month as it missed the forecasts of 3 increase. This marked a return to contraction for New York state’s manufacturing activity at the steepest rate since May 2024. February’s forecast points to a second consecutive month of contraction but at a much slower pace. Should this sector deteriorate more than market expectations, it could trigger a strong sell-off in the dollar and potentially lift gold prices even higher.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

RBA Interest Rate Decision (3:30 am GMT)

RBA Press Conference (4:30 am GMT)

What can we expect from AUD today?

As widely expected, the RBA moved ahead with its first interest rate cut making a 25-basis point (bps) reduction in its Cash Rate to bring it down to 4.10%. With inflation falling substantially since its peak in 2024 and private demand growth looking subdued, inflation is moving sustainably towards the target range of 2 to 3%. The Aussie initially spiked as high as 0.6367 before reversing sharply to fall towards 0.6330 by midday in Asia.

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 Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

With the RBA releasing its monetary policy statement and conducting a press conference during the Asia session on Tuesday, the Kiwi will no doubt be heavily influenced by the price action in the Aussie. Traders should be prepared for higher volatility.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some service sectors have continued to grow.
• Consistent with feedback from business visits, high-frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to ease monetary policy restraint further.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen appreciated for the third successive trading day as USD/JPY tumbled as low as 151.33 on Monday. This currency pair found its footing during the Asia session on Tuesday as it reversed off the lows to rise towards 151.80. However, any retracement to the upside could be limited and traders should watch out for a return of 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 Bullish

The Euro (EUR)

Key news events today

ZEW Economic Sentiment (10:00 am GMT)

What can we expect from EUR today?

The ZEW Economic Sentiment index for the Euro Area continues to highlight concerns and uncertainty in this region, particularly due to Germany’s sluggish GDP growth, rising inflationary pressures, and political instability. This index only rose by one point to 18 in January but February’s forecast points to a much stronger reading of 24.3. Should the ZEW sentiment exceed market expectations, the Euro could receive a strong tailwind 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 Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

After falling 1.3% towards the end of last week, USD/CHF stabilized on Monday as demand for the greenback returned. This currency pair found a floor around 0.8970 before rising 0.5% overnight and the upward momentum grew as Asian markets came online on Tuesday. USD/CHF broke above the threshold of 0.9000 and 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

Weak Bullish

The Pound (GBP)

Key news events today

Labour Force Report (7:00 am GMT)

BoE Gov Bailey’s Panel Discussion (9:30 am GMT)

What can we expect from GBP today?

The U.K. will release its Labour Force report where the claimant count is expected to spike from 700 in the previous month to 10K in January while the unemployment rate is forecasted to edge upwards from 4.4% to 4.5%. Should the labour market show significant signs of deterioration, the Pound is likely to face near-term headwinds. Later on, Bank of England (BoE) Governor Andrew Bailey will be participating in a panel discussion titled “Preserving and enhancing open financial markets” at an event hosted by Bruegel in Brussels. Following the decision to reduce the Official Bank Rate in early February, traders will be looking for further insights and clues from this central bank chief on the outlook for future monetary policy action.

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

CPI (1:30 pm GMT)

What can we expect from CAD today?

Consumer inflation in Canada has moderated significantly lower over the past few months as measured by median/trimmed/common-CPI. However, January’s estimates point to a slight increase in price pressures and should the latest CPI prints come in hot, the Loonie will likely receive a strong boost – a move that would heap overhead pressures on USD/CAD.

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

No major news events.

What can we expect from Oil today?

Oil prices were lifted on Monday following a drone attack on the Kropotkinskaya pipeline pumping station in Russia’s southern Krasnodar region, reducing oil flows from Kazakhstan to world markets by Western producers. Although similar drone attacks in the past have had limited disruption impacts on Russian crude exports, the rising frequency of those attacks is a growing concern. WTI oil rose 0.8% in early trading on Tuesday as this benchmark climbed above $71 per barrel – crude prices are likely to be supported in the near term following this latest disruption on oil flows.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 18 February 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 reversal off the pivot and drop toward  the 1st support

Pivot: 107.39

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

1st support: 1056.58
Supporting reasons: Identified as an overlap support that aligns close to the 78.6% Fibonacci projection, indicating a potential level where price could find support once more.

1st resistance: 108.38
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any 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 rise toward the 1st resistance 

Pivot: 1.0421

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

1st support: 1.0325

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 1.0607
Supporting reasons:  Identified as an overlap resistance that aligns with the 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement. 

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 159.45

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

1st support: 157.72

Supporting reasons: Identified as a pullback support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 161.77
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reversal off the pivot and fall toward the 1st support

Pivot: 0.8319

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

1st support: 0.8272

Supporting reasons: Identified as an overlap support that aligns with the 127.2% Fibonacci extension, indicating a potential level where price could find support once again.

1st resistance: 0.8368
Supporting reasons: Identified as an overlap resistance,  indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.2516

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

1st support: 1.2372

Supporting reasons: Identified as an overlap support, indicating a potential level where price could stabilize once more.

1st resistance: 1.2718
Supporting reasons: Identified as an overlap resistance that aligns close to the 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 193.03

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

1st support: 189.61
Supporting reasons: Identified as a pullback support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 195.88
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 0.8974

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

1st support: 0.8901
Supporting reasons: Identified as an overlap support that aligns with the 161.8% Fibonacci extension, indicating a potential level where price could find support once again.

1st resistance: 0.9091
Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 151.227

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

1st support: 149.53
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once more.

1st resistance: 153.25
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

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: 1.4261
Supporting reasons: Identified as a pullback resistance that aligns with a 50% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 1.4099
Supporting reasons: Identified as a swing-low support that aligns close to a 127.2% Fibonacci extension, indicating a key level where the price could stabilize once more.

1st resistance: 1.4359
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

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: 0.6306

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

1st support: 0.6225

Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6377
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

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: 0.5701

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

1st support: 0.5665

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

1st resistance: 0.5755

Supporting reasons: Identified as a pullback 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: 44,148.32

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 78.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 43,835.30

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

1st resistance: 44,978.36

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: 22,554.00

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

1st support: 21,927.70

Supporting reasons: Identified as a pullback support, indicating a key level where the price could stabilize once more.

1st resistance: 23,273.02
Supporting reasons: Identified as a resistance that aligns with a 100% 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: Bullish

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

Pivot: 6,099.00

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

1st support: 6,072.30

Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 6,176.46

Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 98,853.40

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

1st support: 92,857.02
Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 101,963.41
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.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 2,856.71

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

1st support: 2,472.17
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 again.

1st resistance: 3,028.21
Supporting reasons: Identified as a pullback 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 could rise towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 71.75

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

1st support: 69.40
Supporting reasons: Identified as a swing-low support that aligns with a confluence of Fibonacci levels i.e. two 161.8% extensions, indicating a key level where the price could stabilize once more.

1st resistance: 73.78
Supporting reasons: Identified as a swing-high resistance, 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: 2917.37

Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 2873.31

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 2942.98

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

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The post Tuesday 18th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.