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

Global Markets:

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

News & Data:

• (USD) New Home Sales 657K  to 679K expected
• (USD) Crude Oil Inventories -2.3M  to 2.5M expected

Markets Update:

Asia-Pacific markets were mixed on Thursday as key Wall Street indexes rose despite renewed tariff threats from U.S. President Donald Trump. Australia’s S&P/ASX 200 gained 0.35%, while Japan’s Nikkei 225 remained flat, and the Topix added 0.4%. South Korea’s Kospi dropped 0.82%, with the small-cap Kosdaq slipping 0.1%. Meanwhile, Hong Kong’s Hang Seng Index declined 0.18%, and China’s CSI 300 fell 0.2%.

Japanese retailer Seven & i Holdings saw its shares plummet over 10% after its founding family failed to secure financing for a proposed management buyout. The acquisition, valued at over 8 trillion yen ($53.69 billion), was reportedly abandoned, as per Yomiuri newspaper. This setback led to a sharp decline in investor confidence, further impacting the stock’s performance.

Trump announced plans to impose 25% tariffs on European Union imports, in addition to proceeding with previously postponed tariffs on Mexico and Canada. Goldman Sachs cautioned that markets might still be underestimating deep tariff risks. Kamakshya Trivedi, the bank’s head of global FX and EM strategy, warned that U.S. equities could decline further and the dollar could strengthen if Trump enforces broader tariffs.

Investors are closely watching Asian chip stocks after Nvidia reported strong fourth-quarter earnings, exceeding Wall Street expectations. The chipmaker also issued optimistic guidance, citing AI-driven growth. In the U.S., the S&P 500 ended slightly higher at 5,956.06, snapping a four-day losing streak. The Dow Jones dropped 188.04 points to 43,433.12, while the Nasdaq Composite edged up 0.26% to close at 19,075.26.

Upcoming Events: 

• 01:30 PM GMT – USD Prelim GDP q/q
• 01:30 PM GMT – USD Unemployment Claims

The post Thursday 27th February 2025: Asia Markets Mixed Amid Tariff Worries first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 27 February 2025

What happened in the Asia session?

With no major data releases, it was a fairly quiet session as the dollar index (DXY) edged higher towards 106.80 while spot prices for gold fell under $2,900/oz by midday in Asia. Crude oil prices remained under intense overhead pressures with WTI oil hovering above $68.50 per barrel as a potential peace deal between Russia and Ukraine lingers in the background.

What does it mean for the Europe & US sessions?

Switzerland’s economy expanded by 0.4% QoQ in the third quarter of 2024, slowing from a 0.6% growth rate in the previous quarter. Growth was supported by sectors such as real estate; professional and technical activities; public administration; and human health and social work. However, manufacturing activity contracted sharply. GDP growth is now anticipated to slow for the second consecutive quarter with a growth rate of just 0.2%, which could increase the overhead pressures on the franc and potentially provide a strong tailwind for USD/CHF during the European trading hours.

The Dollar Index (DXY)

Key news events today

GDP (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from DXY today?

After expanding at an annualized rate of 3.0% and 3.1% in the second and third quarters of 2024 respectively, the preliminary estimate by the Bureau of Economic Analysis (BEA) points to a slowdown in economic activity in the final quarter. GDP growth of just 2.3% is expected as fixed investment contracted for the first time since the first quarter of 2023 while both exports and imports contracted. Meanwhile, unemployment claims are anticipated to remain somewhat steady with a reading of 222k, marginally higher than the previous week’s figure of 219k. These macroeconomic data points are bound to inject higher volatility for the dollar later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 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

GDP (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from Gold today?

After expanding at an annualized rate of 3.0% and 3.1% in the second and third quarters of 2024 respectively, the preliminary estimate by the Bureau of Economic Analysis (BEA) points to a slowdown in economic activity in the final quarter. GDP growth of just 2.3% is expected as fixed investment contracted for the first time since the first quarter of 2023 while both exports and imports contracted. Meanwhile, unemployment claims are anticipated to remain somewhat steady with a reading of 222k, marginally higher than the previous week’s figure of 219k. These macroeconomic data points are bound to inject higher volatility for gold prices later today.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Wednesday’s monthly CPI indicator showed inflationary pressures appearing to be moderating in January, causing the Aussie to run out of steam. This currency pair reversed off its high at 0.6353 before tumbling towards 0.6300. Overhead pressures could continue to build and cause the Aussie to drift lower on Thursday.

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?

The recent gains in the Kiwi appear to have fizzled out this week as it fell under 0.5700 overnight. This currency pair was floating around this level as Asian markets came online and it is likely to be dragged lower by its Pacific neighbour, the Aussie.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Despite Wednesday’s core CPI data by the Bank of Japan (BoJ) which showed inflationary pressures accelerating for the third month in a row, demand for the yen faded as USD/JPY found a floor around the region of 149 before hitting an overnight high of 149.88. This currency pair retreated by the end of the U.S. session but it remained supported as Asian markets came online on Thursday, edging higher towards 149.50.

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?

Optimism surrounding defence spending amidst ongoing geopolitical tensions related to Ukraine’s mineral deal with the U.S. is viewed as bolstering investor confidence across Europe, functioning as an additional bullish catalyst for the Euro following the recent election results in Germany. This currency pair reached a high of 1.0528 on Wednesday before retreating slightly – it was hovering around 1.0480 at the beginning of Thursday’s Asia session.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 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

GDP (8:00 am GMT)

What can we expect from CHF today?

Switzerland’s economy expanded by 0.4% QoQ in the third quarter of 2024, slowing from a 0.6% growth rate in the previous quarter. Growth was supported by sectors such as real estate; professional and technical activities; public administration; and human health and social work. However, manufacturing activity contracted sharply. GDP growth is now anticipated to slow for the second consecutive quarter with a growth rate of just 0.2%, which could increase the overhead pressures on the franc and potentially provide a strong tailwind for USD/CHF during the European trading hours.

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

No major news events.

What can we expect from GBP today?

Higher demand for the pound lifted Cable above the 1.2700 mark on Wednesday but it failed to hold ground. This currency pair pulled back as Asian markets came online on Thursday as it edged lower towards 1.2650.

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?

The confirmation of tariffs on imports from Canada by U.S. President Donald Trump has weighed heavily on the Loonie this week. Strong tailwinds have caused USD/CAD to rise 1% this week as it climbed above 1.4300 – this currency pair is all but certain to notch its second consecutive week of higher gains.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Despite the API and EIA inventories registering a surprise drawdown in their respective reports, the higher-than-expected draws were inadequate to support oil prices once more. Coupled with a potential peace deal between Russia and Ukraine, prices continue to remain under pressure. WTI oil fell 0.7% as it hit an overnight low of $68.36 per barrel – this benchmark looks all set to register its sixth successive week of decline.  

Next 24 Hours Bias

Medium Bearish

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

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 106.20
Supporting reasons: Identified as a multi-swing low support, indicating a potential area where price could rebound.

1st support: 105.69
Supporting reasons: Identified as a support that aligns with the 161.8% Fibonacci extension, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 106.84
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.0442
Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where buyers could step in.

1st support: 1.0345
Supporting reasons: Identified as a pullback support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 1.0585
Supporting reasons: Identified as a multi-swing high resistance that aligns close to the 100% Fibonacci projection and the 161.8% Fibonacci extension, forming a Fibonacci confluence that could act as a key resistance level.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 155.94
Supporting reasons: Identified as a multi-swing low support, indicating a potential area where price could rebound.

1st support: 153.99
Supporting reasons: Identified as a support that aligns with the 127.2% Fibonacci extension, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 158.57
Supporting reasons: Identified as an overlap resistance that aligns with the 50% Fibonacci retracement, indicating a potential level where price could face selling pressure.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.8263
Supporting reasons: Identified as a multi-swing low support, indicating a potential area where price could rebound.

1st support: 0.8223
Supporting reasons: Identified as a swing-low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 0.8311
Supporting reasons: Identified as an overlap resistance that aligns with the 50% Fibonacci retracement, indicating a potential level that could cap 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 head towards the 1st resistance.

Pivot: 1.2623
Supporting reasons: Identified as an overlap support, indicating a potential area where price could rebound.

1st support: 1.2521
Supporting reasons: Identified as a pullback support, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 1.2719
Supporting reasons: Identified as an overlap resistance that aligns with the 100% Fibonacci projection and the 127.2% Fibonacci extension, forming a Fibonacci confluence that could act as a key resistance level.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

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

1st support: 188.43
Supporting reasons: Identified as a multi-swing low support, indicating a potential level where price could stabilize before continuing higher.

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

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.8901
Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement and the 78.6% Fibonacci projection, forming a strong Fibonacci confluence where price could find support.

1st support: 0.8800
Supporting reasons: Identified as a pullback support,  indicating a potential level where price could face selling pressure.

1st resistance: 0.8972
Supporting reasons: Identified as an overlap resistance, indicating a potential level where price could face selling pressure.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

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

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

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

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

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

Pivot: 1.4359

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

1st support: 1.4261
Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.4488
Supporting reasons: Identified as a swing-high resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.6323

Supporting reasons: Identified as an overlap resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The price continuing to trade within the downward channel adds further significance to the strength of the bearish momentum.

1st support: 0.6260

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

1st resistance: 0.6356
Supporting reasons: Identified as an overlap resistance that aligns with a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: 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: 0.5693

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify. The price continuing to trade within the downward channel adds further significance to the strength of the bearish momentum.

1st support: 0.5665

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

1st resistance: 0.5726

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

US30 (DJIA):

Potential Direction: 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: 43,840.73

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: 43,352.42

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

1st resistance: 44,395.00

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.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price has made a bearish reversal close to the pivot and could potentially pull back towards the 1st support.

Pivot: 22,867.00

Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area where selling pressures could intensify.

1st support: 22,163.30

Supporting reasons: Identified as a swing-low support that aligns with a 23.6% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 23,446.41
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.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 5,918.31

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 161.8% Fibonacci extension, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 5,843.10

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

1st resistance: 6,000.20

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.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 86,424.63

Supporting reasons: Identified as a pullback resistance that aligns with a 23.6% 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: 76,679.93
Supporting reasons: Identified as a pullback support, indicating a potential level where the price could stabilize once more.

1st resistance: 89,099.51
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 2,401.82

Supporting reasons: Identified as a pullback resistance that aligns with a 23.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

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

1st resistance: 2,519.42
Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 70.11

Supporting reasons: Identified as a pullback resistance that aligns with 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: 67.22
Supporting reasons: Identified as a swing-low support, indicating a key level where the price could stabilize once more.

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

XAU/USD (GOLD):

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

Pivot: 2929.13
Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 2882.38
Supporting reasons: Identified as an overlap support, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 2956.11
Supporting reasons: Identified as a swing high resistance, indicating a potential level where price could face selling pressure.

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

IC Markets Asia Fundamental Forecast | 27 February 2025

What happened in the U.S. session?

Sales of new single-family homes in the U.S. dropped 10.5% from the previous month to a seasonally adjusted annualized rate of 657k in January, falling short of market expectations of 680k to mark the lowest level in three months. Persistently high mortgage rates continued to dampen demand, while severe weather conditions, particularly in the South, added further pressure to the residential real estate market. However, demand for the greenback picked up as the dollar index (DXY) reversed off Wednesday’s low at 106.20 to reach an overnight high of 106.60.

What does it mean for the Asia Session?

The DXY continued to edge higher towards 106.80 while gold has run into near-term headwinds. After recording a high of $2,956.29 at the beginning of this week, this precious metal pulled back with spot prices drifting towards $2,900 – this price action could be attributed to profit-taking by investors and traders alike after a strong rally that commenced over Christmas in 2024.

The Dollar Index (DXY)

Key news events today

GDP (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from DXY today?

After expanding at an annualized rate of 3.0% and 3.1% in the second and third quarters of 2024 respectively, the preliminary estimate by the Bureau of Economic Analysis (BEA) points to a slowdown in economic activity in the final quarter. GDP growth of just 2.3% is expected as fixed investment contracted for the first time since the first quarter of 2023 while both exports and imports contracted. Meanwhile, unemployment claims are anticipated to remain somewhat steady with a reading of 222k, marginally higher than the previous week’s figure of 219k. These macroeconomic data points are bound to inject higher volatility for the dollar later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 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

GDP (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from Gold today?

After expanding at an annualized rate of 3.0% and 3.1% in the second and third quarters of 2024 respectively, the preliminary estimate by the Bureau of Economic Analysis (BEA) points to a slowdown in economic activity in the final quarter. GDP growth of just 2.3% is expected as fixed investment contracted for the first time since the first quarter of 2023 while both exports and imports contracted. Meanwhile, unemployment claims are anticipated to remain somewhat steady with a reading of 222k, marginally higher than the previous week’s figure of 219k. These macroeconomic data points are bound to inject higher volatility for gold prices later today.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Wednesday’s monthly CPI indicator showed inflationary pressures appearing to be moderating in January, causing the Aussie to run out of steam. This currency pair reversed off its high at 0.6353 before tumbling towards 0.6300. Overhead pressures could continue to build and cause the Aussie to drift lower on Thursday.

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?

The recent gains in the Kiwi appear to have fizzled out this week as it fell under 0.5700 overnight. This currency pair was floating around this level as Asian markets came online and it is likely to be dragged lower by its Pacific neighbour, the Aussie.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Despite Wednesday’s core CPI data by the Bank of Japan (BoJ) which showed inflationary pressures accelerating for the third month in a row, demand for the yen faded as USD/JPY found a floor around the region of 149 before hitting an overnight high of 149.88. This currency pair retreated by the end of the U.S. session but it remained supported as Asian markets came online on Thursday, edging higher towards 149.50.

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?

Optimism surrounding defence spending amidst ongoing geopolitical tensions related to Ukraine’s mineral deal with the U.S. is viewed as bolstering investor confidence across Europe, functioning as an additional bullish catalyst for the Euro following the recent election results in Germany. This currency pair reached a high of 1.0528 on Wednesday before retreating slightly – it was hovering around 1.0480 at the beginning of Thursday’s Asia session.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 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

GDP (8:00 am GMT)

What can we expect from CHF today?

Switzerland’s economy expanded by 0.4% QoQ in the third quarter of 2024, slowing from a 0.6% growth rate in the previous quarter. Growth was supported by sectors such as real estate; professional and technical activities; public administration; and human health and social work. However, manufacturing activity contracted sharply. GDP growth is now anticipated to slow for the second consecutive quarter with a growth rate of just 0.2%, which could increase the overhead pressures on the franc and potentially provide a strong tailwind for USD/CHF during the European trading hours.

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

No major news events.

What can we expect from GBP today?

Higher demand for the pound lifted Cable above the 1.2700 mark on Wednesday but it failed to hold ground. This currency pair pulled back as Asian markets came online on Thursday as it edged lower towards 1.2650.

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?

The confirmation of tariffs on imports from Canada by U.S. President Donald Trump has weighed heavily on the Loonie this week. Strong tailwinds have caused USD/CAD to rise 1% this week as it climbed above 1.4300 – this currency pair is all but certain to notch its second consecutive week of higher gains.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Despite the API and EIA inventories registering a surprise drawdown in their respective reports, the higher-than-expected draws were inadequate to support oil prices once more. Coupled with a potential peace deal between Russia and Ukraine, prices continue to remain under pressure. WTI oil fell 0.7% as it hit an overnight low of $68.36 per barrel – this benchmark looks all set to register its sixth successive week of decline.  

Next 24 Hours Bias

Medium Bearish

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

US Stocks Mixed Again on Tariff Threats – Dow Down 0.4%

US stock markets experienced another mixed trading day yesterday as fresh tariff threats from President Trump hit the newswires and his tax cut plan passed in Congress. The Dow dropped 0.43%, while the S&P closed near flat, up just 0.02%, and the Nasdaq gained 0.26%. Treasury yields fell further, with the 2-year yield losing 2.3 basis points to 4.072% and the 10-year yield down 4 basis points to 4.254%. The dollar regained some of its recent losses, with the DXY gaining 0.3% to move back up to 106.49. Oil prices continued to decline, reaching fresh annual lows, with Brent down 0.37% to $72.75 and WTI off 0.20% to $68.79. Meanwhile, gold experienced a rare quiet day, closing up just 0.07% at $2,916.54.

Fed Rate Cut Expectation Pulled into June

US markets have seen increased volatility over the past few weeks, and expectations for Federal Reserve rate cuts have shifted significantly from just a month ago. Previously, markets had been pricing in just one cut in September, but a sharp drop in recent data prints has now pushed expectations towards a potential rate cut as early as June, with another possible in September. However, market dynamics in recent weeks appear to have changed. Equities had previously rallied as yields decreased, but this is no longer the case. The benchmark 10-year yield has fallen by over 11% from its high this year, yet stocks have not responded as many investors had hoped. This has led some market participants to speculate that a larger correction could be on the horizon.

US Data in Focus for Traders Today

The macroeconomic calendar is busier today, with a strong focus on US data in the final session. The first half of the day sees little scheduled, but activity picks up once European markets open. Swiss GDP data and Spanish flash CPI figures are due shortly after the European open, and traders expect corresponding market movements. However, the main focus for most investors will come shortly after the New York open, with the release of US preliminary GDP data alongside the usual weekly unemployment claims update. Given recent disappointing data prints, investors will be watching closely to see whether GDP falls below the anticipated 2.3% increase or if weekly claims significantly deviate from the expected 222,000 figure. Durable goods orders data is also set for release at the same time, though the other reports are likely to dominate sentiment.

The post General Market Analysis – 27/02/25 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 27/2/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.58%, Shanghai Composite up 0.70%, Hang Seng up 3.14% ASX down 0.18%
• Commodities : Gold at $2931.35 (0.33%), Silver at $32.15 (1.08%), Brent Oil at $72.7 (0.5%), WTI Oil at $69.18 (0.38%)
• Rates : US 10-year yield at 4.327, UK 10-year yield at 4.5090, Germany 10-year yield at 2.4510

News & Data:

• (USD) CB Consumer Confidence 98.3  to 102.7 expected
• (USD) Richmond Manufacturing Index 6  to -3 expected

Markets Update:

Asia-Pacific markets had a mixed performance on Wednesday after key U.S. benchmarks fell overnight due to weaker-than-expected consumer confidence data. Hong Kong’s Hang Seng Index surged 2.38%, led by consumer and technology stocks, following the city’s announcement of a 1 billion Hong Kong dollar investment in AI research and development. The Hang Seng Tech Index jumped 3.63%, with JD.com, Xpeng, Alibaba, and Meituan posting significant gains.

Japan’s Nikkei 225 and Topix fell for the second consecutive day, losing 1.11% and 1.06%, respectively. South Korea’s Kospi remained flat, while the small-cap Kosdaq edged up 0.23%. In mainland China, the CSI300 index rose 0.37%. Meanwhile, Australia’s S&P/ASX 200 declined 0.32%, extending its losses. The country’s consumer price index increased by 2.5% year over year in January, in line with expectations.

In the U.S., investor concerns over economic growth and global trade weighed on markets. The S&P 500 slipped 0.47%, marking its fourth consecutive decline and closing at 5,955.25. The Nasdaq Composite dropped 1.35% to 19,026.39, led by a 2.8% fall in Nvidia’s shares. However, the Dow Jones Industrial Average bucked the trend, rising 0.37% or 159.95 points to close at 43,621.16.

With market uncertainty rising, investors sought safety in U.S. bonds. The benchmark 10-year Treasury yield fell below 4.3%, hitting its lowest level since December, reflecting cautious sentiment in the financial markets.

Upcoming Events: 

• 03:00 PM GMT – USD New Home Sales
• 03:30 PM GMT – USD Crude Oil Inventories

The post Wednesday 26th February 2025: Asia-Pacific Mixed as U.S. Stocks Slide first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 26 February 2025

What happened in the Asia session?

After accelerating from October’s low of 2.1% to as high as 2.5% in December, inflationary pressures in Australia appear to be moderating – the monthly CPI indicator remained unchanged at an annual rate of 2.5% in January. However, food prices increased the most in three months while housing inflation notched a five-month peak. The Aussie was hovering around 0.6320 by midday in Asia.

The Bank of Japan (BoJ) released its core CPI data for January where this metric is anticipated to accelerate for the third month in a row. After easing to an annual rate of 1.5% in October, the BoJ core CPI surged from 1.9% in the previous month to 2.2%, exceeding market forecasts of a 2.0% increase. Mounting inflationary pressures are likely to reinforce this central bank’s hawkish stance and raise the probability of another rate hike in March.

What does it mean for the Europe & US sessions?

Looking at U.S. oil stocks once again, the EIA inventories have experienced four successive weeks of higher-than-anticipated builds, averaging 5.2M barrels of crude per week. Should the latest report point to another week of increasing inventories, it could function as a near-term bearish catalyst for crude oil later today.

The Dollar Index (DXY)

Key news events today

New Home Sales (3:00 pm GMT)

What can we expect from DXY today?

Sales of new single-family homes rose by 3.6% MoM in December to a seasonally adjusted annualized rate of 698k, the most since September and firmly above market expectations of 670k. This upward momentum in home sales could continue in January as benchmark mortgage rates have eased from January’s high of 7.04% for the 30-year fixed-rate mortgage, potentially nudging would-be buyers from the sidelines. Stronger-than-expected sales could provide a much-needed lift for 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

Medium Bearish

Gold (XAU)

Key news events today

New Home Sales (3:00 pm GMT)

What can we expect from Gold today?

Sales of new single-family homes rose by 3.6% MoM in December to a seasonally adjusted annualized rate of 698k, the most since September and firmly above market expectations of 670k. This upward momentum in home sales could continue in January as benchmark mortgage rates have eased from January’s high of 7.04% for the 30-year fixed-rate mortgage, potentially nudging would-be buyers from the sidelines. Stronger-than-expected sales could provide a much-needed lift for the dollar and potentially place gold prices under pressure.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

CPI (12:30 am GMT)

What can we expect from AUD today?

After accelerating from October’s low of 2.1% to as high as 2.5% in December, inflationary pressures in Australia appear to be moderating – the monthly CPI indicator remained unchanged at an annual rate of 2.5% in January. However, food prices increased the most in three months while housing inflation notched a five-month peak. The Aussie was hovering around 0.6320 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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

With no major data releases in New Zealand, the Kiwi will likely take cue from its Pacific neighbour following the release of January’s consumer inflation in Australia. This currency pair was floating around 0.5720 as Asian markets came online.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

BoJ Core CPI (5:00 am GMT)

What can we expect from JPY today?

The Bank of Japan (BoJ) released its core CPI data for January where this metric is anticipated to accelerate for the third month in a row. After easing to an annual rate of 1.5% in October, the BoJ core CPI surged from 1.9% in the previous month to 2.2%, exceeding market forecasts of a 2.0% increase. Mounting inflationary pressures are likely to reinforce this central bank’s hawkish stance and raise the probability of another rate hike in March.

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 Germany’s economy contracting by 0.2% QoQ in the second quarter of 2024 due primarily to declining exports and sluggish household consumption growth, the Euro remained well supported. The latest reading marked six consecutive quarters of contraction but the optimism brewing from the nation’s recent election results had overshadowed Tuesday’s poor GDP report. The Euro climbed above 1.0500 and it looks set to edge higher on Wednesday.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 30 January to mark the fourth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.90%, 3.15% and 2.75% respectively.
• The disinflation process is well on track and inflation is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 6 March 2025.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The franc saw strong inflows on Tuesday as USD/CHF fell over 0.5%, slipping towards 0.8900, as new tariffs imposed by the U.S. on Canada and Mexico triggered a demand for this safe-haven currency. Overhead pressures are mounting for this currency pair and a break below 0.8900 is inevitable.

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 Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Demand for the pound remained robust on Tuesday as Cable rose nearly 0.4%, gaining slightly more than 40 pips in the process. With no tariffs targeted towards the U.K. thus far, the pound will likely continue its upward ascent on Wednesday.

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

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

With U.S. President Donald Trump confirming that tariffs on imports from Canada and Mexico will proceed as planned, the Loonie has come under pressure providing a strong lift for USD/CAD. This currency pair has risen over the last three consecutive trading days as it hit an overnight high of 1.4317 and it should remain supported as the day progresses.

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

EIA Crude Oil Inventories (3:30 pm GMT)

What can we expect from Oil today?

Despite the API report highlighting a surprise draw of 0.64M barrels of crude to buck a 5-week streak of higher inventories, it was insufficient to support oil prices on Tuesday as WTI oil dived 2.8% to hit an overnight low of $68.68 per barrel. With U.S. President Donald Trump confirming that tariffs on imports from Canada and Mexico would proceed as planned, it raised concerns about a potential trade war, which could lead to slower global growth and potentially dampen demand for crude oil. Looking at U.S. oil stocks once again, the EIA inventories have experienced four successive weeks of higher-than-anticipated builds, averaging 5.2M barrels of crude per week. Should the latest report point to another week of increasing inventories, it could function as a near-term bearish catalyst for this commodity later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 26 February 2025 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 26/2/2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 106.20
Supporting reasons: Identified as a multi-swing low support, indicating a potential area where price could rebound.

1st support: 105.69
Supporting reasons: Identified as a support that aligns with the 161.8% Fibonacci extension, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 106.84
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.0442
Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where buyers could step in.

1st support: 1.0345
Supporting reasons: Identified as a pullback support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 1.0585
Supporting reasons: Identified as a multi-swing high resistance that aligns close to the 100% Fibonacci projection and the 161.8% Fibonacci extension, forming a Fibonacci confluence that could act as a key resistance level.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 155.94
Supporting reasons: Identified as a multi-swing low support, indicating a potential area where price could rebound.

1st support: 153.99
Supporting reasons: Identified as a support that aligns with the 127.2% Fibonacci extension, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 158.57
Supporting reasons: Identified as an overlap resistance that aligns with the 50% Fibonacci retracement, indicating a potential level where price could face selling pressure.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.8313
Supporting reasons: Identified as a pullback resistance that aligns with the 50% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 0.8263
Supporting reasons: Identified as a multi-swing low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 0.8357
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 1.2623
Supporting reasons: Identified as an overlap support, indicating a potential area where buyers could step in.

1st support: 1.2521
Supporting reasons: Identified as a pullback support, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 1.2719
Supporting reasons: Identified as an overlap resistance that aligns with the 100% Fibonacci projection and the 127.2% Fibonacci extension, forming a Fibonacci confluence that could act as a key resistance level.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

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

1st support: 187.74
Supporting reasons: Identified as a swing low support, indicating a potential level where price could stabilize before continuing higher.

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

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.8901
Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement and the 78.6% Fibonacci projection, forming a strong Fibonacci confluence where price could find support.

1st support: 0.8799
Supporting reasons: Identified as a pullback support,  indicating a potential level where price could face selling pressure.

1st resistance: 0.8972
Supporting reasons: Identified as an overlap resistance, indicating a potential level where price could face selling pressure.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 148.83
Supporting reasons: Identified as an overlap support that aligns with the 161.8% Fibonacci extension, indicating a strong level where buyers could step in. Additionally, The RSI is displaying bearish divergence versus price, suggesting that a reversal might occur soon, which could indicate a weakening of the bullish momentum.

1st support: 146.90
Supporting reasons: Identified as a pullback support that aligns with the 100% Fibonacci projection, suggesting a potential area where price could stabilize before resuming its upward movement.

1st resistance: 150.93
Supporting reasons: Identified as a pullback resistance, indicating a potential level where price could face selling pressure.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

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

Pivot: 1.4359

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

1st support: 1.4261
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 1.4488
Supporting reasons: Identified as a swing-high resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

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: 0.6323

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

1st support: 0.6260

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

1st resistance: 0.6402
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 could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.5693

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

1st support: 0.5665

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

1st resistance: 0.5750

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

US30 (DJIA):

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: 43,840.73

Supporting reasons: Identified as a pullback resistance that aligns close to a 23.6% 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: 43,352.42

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

1st resistance: 44,395.00

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

DE40 (DAX):

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: 22,867.00

Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area where selling pressures could intensify.

1st support: 22,163.30

Supporting reasons: Identified as a swing-low support that aligns with a 23.6% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 23,446.41
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.

US500 (S&P 500): 

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: 6,043.80

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

1st support: 5,918.31

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

1st resistance: 6,097.10

Supporting reasons: Identified as an overlap resistance that aligns with a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 90,732.57

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: 86,424.63
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 94,030.59
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.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 2,622.94

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

1st support: 2,360.08
Supporting reasons: Identified as a multi-swing-low support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 2,855.60
Supporting reasons: Identified as a multi-swing high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 70.11

Supporting reasons: Identified as a pullback resistance that aligns close to a 23.6% 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: 67.22
Supporting reasons: Identified as a swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 71.08
Supporting reasons: Identified as a swing-high resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

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

Pivot: 2929.13
Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area where selling pressure could emerge.

1st support: 2882.38
Supporting reasons: Identified as an overlap support, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 2956.116
Supporting reasons: Identified as a swing high resistance, indicating a potential level where price could face selling pressure.

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The post Wednesday 26th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 26 February 2025

What happened in the U.S. session?

The backdrop of the ongoing trade tensions between the U.S. and its major trading partners is sapping confidence among American consumers as the Conference Board’s latest survey highlighted this pessimism. The index dropped sharply from 105.3 in the previous month to 98.3 in February to mark the third consecutive month of decline as views of current labour market conditions weakened. Consumers also became pessimistic about future business conditions and less optimistic about future income. Demand for the greenback waned on Tuesday as the dollar index (DXY) fell nearly 0.5% to hit an overnight low of 106.18. This index stabilized around 106.20 at the beginning of Wednesday’s Asia session but overhead pressures remain intact,

What does it mean for the Asia Session?

After accelerating from October’s low of 2.1% to as high as 2.5% in December, inflationary pressures in Australia appear to be moderating – the monthly CPI indicator remained unchanged at an annual rate of 2.5% in January. However, food prices increased the most in three months while housing inflation notched a five-month peak. The Aussie was hovering around 0.6330 following the release of this inflation metric and it is likely to remain supported as the day progresses.

The Bank of Japan (BoJ) will release its core CPI data for January where this metric is anticipated to accelerate for the third month in a row. After easing to an annual rate of 1.5% in October, the BoJ core CPI is forecast to increase to 2.0%. Should inflationary pressures continue to press higher, it reinforces this central bank’s stance on its hawkish tilt and raises the probability of another rate hike in March. Demand for the yen has been robust driving USD/JPY under 149 overnight.

The Dollar Index (DXY)

Key news events today

New Home Sales (3:00 pm GMT)

What can we expect from DXY today?

Sales of new single-family homes rose by 3.6% MoM in December to a seasonally adjusted annualized rate of 698k, the most since September and firmly above market expectations of 670k. This upward momentum in home sales could continue in January as benchmark mortgage rates have eased from January’s high of 7.04% for the 30-year fixed-rate mortgage, potentially nudging would-be buyers from the sidelines. Stronger-than-expected sales could provide a much-needed lift for 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

Medium Bearish

Gold (XAU)

Key news events today

New Home Sales (3:00 pm GMT)

What can we expect from Gold today?

Sales of new single-family homes rose by 3.6% MoM in December to a seasonally adjusted annualized rate of 698k, the most since September and firmly above market expectations of 670k. This upward momentum in home sales could continue in January as benchmark mortgage rates have eased from January’s high of 7.04% for the 30-year fixed-rate mortgage, potentially nudging would-be buyers from the sidelines. Stronger-than-expected sales could provide a much-needed lift for the dollar and potentially place gold prices under pressure.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

CPI (12:30 am GMT)

What can we expect from AUD today?

After accelerating from October’s low of 2.1% to as high as 2.5% in December, inflationary pressures in Australia appear to be moderating – the monthly CPI indicator remained unchanged at an annual rate of 2.5% in January. However, food prices increased the most in three months while housing inflation notched a five-month peak. The Aussie was hovering around 0.6330 following the release of this inflation metric and it is likely to remain supported as the day progresses.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

With no major data releases in New Zealand, the Kiwi will likely take cue from its Pacific neighbour following the release of January’s consumer inflation in Australia. This currency pair was floating around 0.5720 as Asian markets came online.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

BoJ Core CPI (5:00 am GMT)

What can we expect from JPY today?

The Bank of Japan (BoJ) will release its core CPI data for January where this metric is anticipated to accelerate for the third month in a row. After easing to an annual rate of 1.5% in October, the BoJ core CPI is forecast to increase to 2.0%. Should inflationary pressures continue to press higher, it reinforces this central bank’s stance on its hawkish tilt and raises the probability of another rate hike in March. Demand for the yen has been robust driving USD/JPY under 149 overnight.

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 Germany’s economy contracting by 0.2% QoQ in the second quarter of 2024 due primarily to declining exports and sluggish household consumption growth, the Euro remained well supported. The latest reading marked six consecutive quarters of contraction but the optimism brewing from the nation’s recent election results had overshadowed Tuesday’s poor GDP report. The Euro climbed above 1.0500 and it looks set to edge higher on Wednesday.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 30 January to mark the fourth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.90%, 3.15% and 2.75% respectively.
• The disinflation process is well on track and inflation is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 6 March 2025.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The franc saw strong inflows on Tuesday as USD/CHF fell over 0.5%, slipping towards 0.8900, as new tariffs imposed by the U.S. on Canada and Mexico triggered a demand for this safe-haven currency. Overhead pressures are mounting for this currency pair and a break below 0.8900 is inevitable.

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 Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Demand for the pound remained robust on Tuesday as Cable rose nearly 0.4%, gaining slightly more than 40 pips in the process. With no tariffs targeted towards the U.K. thus far, the pound will likely continue its upward ascent on Wednesday.

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

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

With U.S. President Donald Trump confirming that tariffs on imports from Canada and Mexico will proceed as planned, the Loonie has come under pressure providing a strong lift for USD/CAD. This currency pair has risen over the last three consecutive trading days as it hit an overnight high of 1.4317 and it should remain supported as the day progresses.

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

EIA Crude Oil Inventories (3:30 pm GMT)

What can we expect from Oil today?

Despite the API report highlighting a surprise draw of 0.64M barrels of crude to buck a 5-week streak of higher inventories, it was insufficient to support oil prices on Tuesday as WTI oil dived 2.8% to hit an overnight low of $68.68 per barrel. With U.S. President Donald Trump confirming that tariffs on imports from Canada and Mexico would proceed as planned, it raised concerns about a potential trade war, which could lead to slower global growth and potentially dampen demand for crude oil. Looking at U.S. oil stocks once again, the EIA inventories have experienced four successive weeks of higher-than-anticipated builds, averaging 5.2M barrels of crude per week. Should the latest report point to another week of increasing inventories, it could function as a near-term bearish catalyst for this commodity later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 26 February 2025 first appeared on IC Markets | Official Blog.