Tech Stocks Hit Again After Weak Data – Nasdaq Off 1.35%

US tech stocks took another hit in trading yesterday after Consumer Confidence numbers came in a lot lower than expected. The Dow pushed 0.37% higher, but the tech‐heavy S&P and Nasdaq suffered, losing 0.47% and 1.35% respectively. Treasury yields took another tumble and are well off highs seen just a few weeks ago; the 2‐year lost 7.4 basis points to move down to 4.094%, and the benchmark 10‐year fell 10.6 basis points to 4.294%. Oil prices took a hard hit as demand concerns increased – Brent off 2.11% to $73.20 and WTI down 2.50% to $68.93 a barrel – whilst gold dipped 1.19% to $2,916.59 as more profit‐taking flow hit the market.

Treasury Yields Could Push the Dollar Lower

FX traders will be keeping a close eye on US Treasury yields over the following days, as they have taken a beating in the last week with US data continuing to come in below expectations. Last night’s weaker‐than‐expected US Consumer Confidence data led to the benchmark 10‐year yield hitting its lowest level in 10 weeks as investors piled into treasuries. The uncertainty regarding President Trump’s policies – and particularly his tariff plans – is now filtering strongly through to US markets, and the pressure on yields could flow through onto the dollar. The contrarian view, however, is that this is just a clear‐out move, and tariff threats from just a day or so ago could lead to inflationary pressures and see yields rebound strongly – and with it, the dollar. Once again for many, it looks like more headline volatility ahead!

Event Calendar Picks Up for Traders Today

The event calendar has been relatively bare so far this week, and the impact of last night’s Consumer Confidence number in the US shows how much traders are now looking for fundamental data to back up recent moves. The event calendar does pick up from today and increases as we move through the week. The initial focus in the Asian session today will be on Australian markets, with the key CPI data due out early in the day – the expectation is for a 2.6% increase for the year-on-year data, and anything off this will see strong moves in the Aussie. There is little on the calendar in Europe, but we do have more data out from the US once New York opens; New Home Sales data is due out early in the day, before we then have the usual weekly US Crude Oil Inventory data.

The post General Market Analysis – 26/02/25 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 1.35%, Shanghai Composite down 0.23%, Hang Seng down 0.74% ASX down 0.68%
• Commodities : Gold at $2953.35 (-0.33%), Silver at $32.65 (0.08%), Brent Oil at $74.7 (0.5%), WTI Oil at $71.8 (0.68%)
• Rates : US 10-year yield at 4.376, UK 10-year yield at 4.5640, Germany 10-year yield at 2.469

News & Data:

• (EUR) Belgian NBB Business Climate -12.3  to -12.9 expected

Markets Update:

Asia-Pacific markets declined on Tuesday after Wall Street’s overnight slump, driven by renewed trade tensions from Trump’s tariff policies. Investors also evaluated the Bank of Korea’s rate decision, which aimed to support a slowing economy. Japan’s Nikkei 225 led regional losses, dropping over 1%, while the Topix slipped 0.14%. However, major Japanese trading houses saw gains after Warren Buffett announced plans to increase Berkshire Hathaway’s stake in these firms.

South Korea’s Kospi fell 0.40%, and the small-cap Kosdaq declined 0.23%. The Bank of Korea cut interest rates from 3% to 2.75% in an effort to stimulate economic growth, weakening the Korean won slightly to 1,430.1 per dollar. Meanwhile, political uncertainty loomed as President Yoon Suk Yeol faced impeachment proceedings following his brief imposition of martial law in December.

China’s CSI 300 fell 0.40%, while Hong Kong’s Hang Seng Index dropped 0.62% amid escalating trade tensions with the U.S. The Hang Seng Tech Index, however, managed to recover earlier losses and traded flat. In Australia, the S&P/ASX 200 declined 0.80%, reflecting broader market weakness across the region.

In the U.S., markets struggled to rebound from last Friday’s sell-off. The S&P 500 lost 0.5%, closing at 5,983.25, while the Nasdaq Composite dropped 1.21% to 19,286.92. The Dow Jones Industrial Average edged up 33.19 points (0.08%) to 43,461.21. Sentiment remained fragile as Trump confirmed that tariffs on Canada and Mexico would take effect after a one-month delay, heightening trade war concerns.

Upcoming Events: 

• 03:00 PM GMT – USD CB Consumer Confidence
• 03:00 PM GMT – USD Richmond Manufacturing Index

The post Tuesday 25th February 2025: Asia-Pacific Markets Slide as Trade Tensions and Rate Cuts Weigh on Sentiment first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 25 February 2025

What happened in the Asia session?

Japan’s financial markets resumed trading on Tuesday following Monday’s closure in observance of the Emperor’s Birthday bank holiday. Demand for the yen has been robust since mid-February, causing USD/JPY to tumble almost 4% over this period. This currency pair found a near-term floor in the region of 149 on Monday and rebounded more than 0.5% to climb above the 150 mark. However, USD/JPY stalled around 150.30 before reversing abruptly to tumble towards 149.50 by midday in Asia.

What does it mean for the Europe & US sessions?

Bank of England (BoE) Chief Economist Huw Pill will deliver his closing remarks at the Agenda for Research Conference in London on Tuesday. Following this central bank’s decision to reduce the Bank Rate two weeks ago, traders will be paying close attention to any remarks on the current state and the outlook for Britain’s economy and how future monetary policy action could be tailored to adjust for significant changes in the economy.

Moving over to the U.S. inventories, the API stockpiles have experienced five consecutive weeks of higher-than-anticipated builds, averaging 4.3M 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

S&P/CS Composite-20 HPI (2:00 pm GMT)

CB Consumer Confidence (3:00 pm GMT)

Richmond Manufacturing Index (3:00 pm GMT)

What can we expect from DXY today?

The dollar is all but certain to face higher volatility on Tuesday as there is a trifecta of macroeconomic data that is scheduled for release later today. The S&P/Case-Shiller will drop its report on the 210-city Home Price Index (HPI) while the Conference Board releases its survey on consumer confidence for February. In addition, markets will also get a glimpse of the state of manufacturing activity in the Fifth Federal Reserve District, including states like Virginia and the Carolinas. After falling for three successive weeks, demand for the dollar has somewhat rekindled to provide a floor for the DXY as it stabilized around 106.20 to reverse and climb above 106.5 overnight. This index was edging higher towards 106.80 as Asian markets came online on Tuesday.

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

No major news events.

What can we expect from Gold today?

Spot prices for gold retreated slightly after recording a fresh high of $2,956.29/oz on Monday. This slight pullback could be attributed to some profit-taking amidst ongoing risk aversion due to U.S. trade policy uncertainties. Despite the pullback, gold remains in a strong uptrend, supported by a weaker U.S. dollar and persistent market concerns.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After marking three consecutive weeks of higher gains, the Aussie ran out of steam around 0.6410 as demand for the greenback reignited on Monday. This currency slid lower overnight and it edged lower towards 0.6330 at the beginning of the Asia session.

Central Bank Notes:

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

Despite retail sales rebounding strongly in the final quarter of 2024 as it jumped 0.9% QoQ, it failed to keep the Kiwi elevated on Monday. This currency pair reversed off Monday’s high of 0.5770 to fall quite sharply and it continued to drift lower on Tuesday, falling towards the 0.5700 mark.

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?

Japan’s financial markets resumed trading on Tuesday following Monday’s closure in observance of the Emperor’s Birthday bank holiday. Demand for the yen has been robust since mid-February, causing USD/JPY to tumble almost 4% over this period. This currency pair found a near-term floor in the region of 149 on Monday and rebounded more than 0.5% to climb above the 150 mark. However, USD/JPY stalled around 150.30 before reversing abruptly to tumble towards 149.50 by midday in Asia.

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?

Following a lacklustre business sentiment in Germany based on the latest ifo Business Climate survey that was released on Monday, the Euro stalled as it hit a ceiling at 1.0530. While companies became more optimistic about their outlook for the coming months, their assessment of the current business situation declined. Across industries, sentiment weakened among service providers, with growing scepticism particularly in the transport and logistics sector. Overhead pressures are likely to remain in place on Tuesday.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

With demand for the greenback rekindling on Monday, USD/CHF found its footing around 0.8960. This currency pair was rising steadily towards the threshold of 0.9000 as Asian markets came online.

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

BoE Chief Economist Pill’s Speech (2:00 pm GMT)

What can we expect from GBP today?

Bank of England (BoE) Chief Economist Huw Pill will deliver his closing remarks at the Agenda for Research Conference in London on Tuesday. Following this central bank’s decision to reduce the Bank Rate two weeks ago, traders will be paying close attention to any remarks on the current state and the outlook for Britain’s economy and how future monetary policy action could be tailored to adjust for significant changes in the economy.

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?

As demand for the greenback picked up on Monday, USD/CAD stabilized at around 1.4200 on Monday before climbing higher. This currency pair rose strongly past 1.4250 and it should remain elevated 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

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

Crude oil prices settled higher on Monday following a fresh round of U.S. sanctions on Iran, targeting industry participants such as brokers, tanker operators, and shippers who sell and transport Iranian petroleum. WTI oil rose more than 1.5% to hit an overnight high of $70.94 per barrel and the upward momentum has continued at the beginning of Tuesday’s Asia session. This benchmark looks all set to break above the $71 mark as the day progresses. Moving over to the U.S. inventories, the API stockpiles have experienced five consecutive weeks of higher-than-anticipated builds, averaging 4.3M 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

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 25 February 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 107.39
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressure could emerge.

1st support: 106.20
Supporting reasons: Identified as an overlap, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 108.41
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement, 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: 1.0600
Supporting reasons: Identified as a swing high resistance that aligns with the 78.6% 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: 0.8318
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 drop further to the pivot in the short term before bouncing from there and rising to the 1st resistance.

Pivot: 1.2564
Supporting reasons: Identified as an overlap support, indicating a potential area where buyers could step in.

1st support: 1.2367
Supporting reasons: Identified as an overlap support, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 1.2776
Supporting reasons: Identified as a multi-swing high resistance that aligns with the 100% Fibonacci projection and the 61.8% Fibonacci projection, 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, indicating a potential area where selling pressure could emerge.

1st support: 182.95
Supporting reasons: Identified as an overlap support that aligns with the 50% Fibonacci retracement, indicating a potential level where price could stabilize before continuing higher.

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

USD/CHF:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 0.9002
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressure could emerge.

1st support: 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 resistance: 0.9090
Supporting reasons: Identified as a pullback resistance, indicating a potential level where price could face selling pressure.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 149.28
Supporting reasons: Identified as a pullback support that aligns with the 161.8% Fibonacci extension, indicating a strong level where buyers could step in.

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: 151.19
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: 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: 1.4261

Supporting reasons: Identified as a pullback resistance that aligns with a 50% 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: 1.4156
Supporting reasons: Identified as a swing-low support, indicating a key level where the price could stabilize once more.

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

AUD/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.6323

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

Pivot: 0.5724

Supporting reasons: Identified as a pullback support, 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: 0.5693

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

1st resistance: 0.5761

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

US30 (DJIA):

Potential Direction: 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: 6,053.00

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

1st support: 5,985.10

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

1st resistance: 6,099.90

Supporting reasons: Identified as an overlap resistance that aligns close to 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: 94,196.75

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

1st support: 90,845.73
Supporting reasons: Identified as a multis-wing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 96,652.60
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8 Fibonacci retracement, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 2,622.94

Supporting reasons: Previously identified as a multi-swing-low support where the bearish momentum has caused the price to drop lower.

1st support: 2,360.08
Supporting reasons: Identified as a 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, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 71.85

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

1st support: 70.11
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 72.91
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

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

Pivot: 2953.33
Supporting reasons: Identified as a multi-swing high resistance that aligns with the 161.8% Fibonacci extension, 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: 2979.66
Supporting reasons: Identified as a resistance that aligns with the 161.8% Fibonacci extension, indicating a potential level where price could face selling pressure.

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The post Tuesday 25th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 25 February 2025

What happened in the U.S. session?

With no major data releases overnight, the dollar index (DXY) stabilized around 106.70 after falling as low as 106.12 on Monday while spot prices for gold retreated slightly after recording a fresh high of $2,956.29/oz. This slight pullback could be attributed to some profit-taking amidst ongoing risk aversion due to U.S. trade policy uncertainties. Despite the pullback, gold remains in a strong uptrend, supported by a weaker U.S. dollar and persistent market concerns.

What does it mean for the Asia Session?

Japan’s financial markets will resume trading on Tuesday following Monday’s closure in observance of the Emperor’s Birthday bank holiday. Demand for the yen has been robust since mid-February, causing USD/JPY to tumble almost 4% over this period. However, this currency pair found a near-term floor in the region of 149 on Monday and has since rebounded more than 0.5% to climb above the 150 mark. This weakness in the yen could be attributed to profit-taking following a strong appreciation for this currency.

The Dollar Index (DXY)

Key news events today

S&P/CS Composite-20 HPI (2:00 pm GMT)

CB Consumer Confidence (3:00 pm GMT)

Richmond Manufacturing Index (3:00 pm GMT)

What can we expect from DXY today?

The dollar is all but certain to face higher volatility on Tuesday as there is a trifecta of macroeconomic data that is scheduled for release later today. The S&P/Case-Shiller will drop its report on the 210-city Home Price Index (HPI) while the Conference Board releases its survey on consumer confidence for February. In addition, markets will also get a glimpse of the state of manufacturing activity in the Fifth Federal Reserve District, including states like Virginia and the Carolinas. After falling for three successive weeks, demand for the dollar has somewhat rekindled to provide a floor for the DXY as it stabilized around 106.20 to reverse and climb above 106.5 overnight. This index was edging higher towards 106.80 as Asian markets came online on Tuesday.

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

No major news events.

What can we expect from Gold today?

Spot prices for gold retreated slightly after recording a fresh high of $2,956.29/oz on Monday. This slight pullback could be attributed to some profit-taking amidst ongoing risk aversion due to U.S. trade policy uncertainties. Despite the pullback, gold remains in a strong uptrend, supported by a weaker U.S. dollar and persistent market concerns.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After marking three consecutive weeks of higher gains, the Aussie ran out of steam around 0.6410 as demand for the greenback reignited on Monday. This currency slid lower overnight and it edged lower towards 0.6330 at the beginning of the Asia session.

Central Bank Notes:

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

Despite retail sales rebounding strongly in the final quarter of 2024 as it jumped 0.9% QoQ, it failed to keep the Kiwi elevated on Monday. This currency pair reversed off Monday’s high of 0.5770 to fall quite sharply and it continued to drift lower on Tuesday, falling towards the 0.5700 mark.

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?

Japan’s financial markets will resume trading on Tuesday following Monday’s closure in observance of the Emperor’s Birthday bank holiday. Demand for the yen has been robust since mid-February, causing USD/JPY to tumble almost 4% over this period. However, this currency pair found a near-term floor in the region of 149 on Monday and has since rebounded more than 0.5% to climb above the 150 mark. This weakness in the yen could be attributed to profit-taking following a strong appreciation for this currency.

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?

Following a lacklustre business sentiment in Germany based on the latest ifo Business Climate survey that was released on Monday, the Euro stalled as it hit a ceiling at 1.0530. While companies became more optimistic about their outlook for the coming months, their assessment of the current business situation declined. Across industries, sentiment weakened among service providers, with growing scepticism particularly in the transport and logistics sector. Overhead pressures are likely to remain in place on Tuesday.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

With demand for the greenback rekindling on Monday, USD/CHF found its footing around 0.8960. This currency pair was rising steadily towards the threshold of 0.9000 as Asian markets came online.

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

BoE Chief Economist Pill’s Speech (2:00 pm GMT)

What can we expect from GBP today?

Bank of England (BoE) Chief Economist Huw Pill will deliver his closing remarks at the Agenda for Research Conference in London on Tuesday. Following this central bank’s decision to reduce the Bank Rate two weeks ago, traders will be paying close attention to any remarks on the current state and the outlook for Britain’s economy and how future monetary policy action could be tailored to adjust for significant changes in the economy.

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?

As demand for the greenback picked up on Monday, USD/CAD stabilized at around 1.4200 on Monday before climbing higher. This currency pair rose strongly past 1.4250 and it should remain elevated 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

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

Crude oil prices settled higher on Monday following a fresh round of U.S. sanctions on Iran, targeting industry participants such as brokers, tanker operators, and shippers who sell and transport Iranian petroleum. WTI oil rose more than 1.5% to hit an overnight high of $70.94 per barrel and the upward momentum has continued at the beginning of Tuesday’s Asia session. This benchmark looks all set to break above the $71 mark as the day progresses. Moving over to the U.S. inventories, the API stockpiles have experienced five consecutive weeks of higher-than-anticipated builds, averaging 4.3M 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

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 25 February 2025 first appeared on IC Markets | Official Blog.

Markets Hit by New Tariff Threat – Nasdaq Down 1.2%

Global markets were hit again yesterday as President Trump advised that tariffs will go ahead against Mexico and Canada in early March. Tech stocks led the way lower on the U.S. indices; the Nasdaq dropped 1.21%, followed by the S&P which fell 0.50%, whilst the Dow managed a 0.08% gain. U.S. Treasury yields drifted lower, with the two-year down 0.8 of a basis point to 4.166% and the ten-year down 1.6 basis points to 4.385%. The dollar was quiet on the index, with the DXY up just 0.06% to 106.77, although it made strong ground against the CAD and MXN. Oil prices pushed slightly higher off recent lows, with Brent up 0.21% to $74.78 and WTI up 0.47% to $70.81 a barrel, whilst gold pushed higher again, reaching $2,948.79 by the close.

Gold Pivotal at These Levels

Gold remains trading near all-time highs at the moment, and investors and traders alike feel that the next few weeks could be pivotal for the long-term trend of the world’s favourite precious metal. Gold’s relentless move higher over the last year has seen it climb 48% above its low in February 2024 and over 13% in 2025 alone. These moves have taken place during periods of both dollar strength and weakness, which has taken the traditional U.S. dollar side of the trade out of the equation; however, some traders are now looking back to basics and feel that this side of the trade could reassert itself. Bulls point to a recent spate of poor data from the U.S. that could push the dollar lower, alongside lower Treasury yields and increased expectations of Fed rate cuts, and believe that a $3,000 print is not out of the question in the coming months.

Conversely, some bears are beginning to emerge, feeling that this move may be overdone and that a change in market sentiment could alter last year’s dynamics, potentially leading to significant corrections. Most market players agree, however, that gold will be trading at a very different level in a few months’ time.

Traders Eye Up the First U.S. Data of the Week Today

The macroeconomic calendar is once again relatively quiet for the first couple of trading sessions today; however, that is set to change when we receive the first tier 1 U.S. data releases in the coming days. There is nothing on the dance card for traders in Asia today, and while we will hear from Buba President Joachim Nagel in the European session, most traders are focusing on the New York session for market-moving updates. First up, we have the S&P Composite HPI number early in the day, with the market expecting it to print at 4.3%. Later in the session, we have the CB Consumer Sentiment data, which will probably have the most impact on the market, especially if it prints at the expected 103.3 figure. The Richmond Manufacturing Index data is also due out at the same time, but that figure is expected to be overshadowed by the Consumer Sentiment data. Later in the day, we will also hear from FOMC members Michael Barr and Thomas Barkin.

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

The post Ex-Dividend 25/2/2025 first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 24 February 2025

What happened in the Asia session?

Consumer spending in New Zealand has been abysmal since 2022 as retail sales experienced only one period of growth in 11 quarters. However, sales rebounded strongly in the final quarter of 2024 as they jumped 0.9% with the biggest increases seen in categories such as electrical and electronic goods retailing; department stores; accommodation; and food and beverage services. This recent uptick in consumer spending could provide lift for the Kiwi as the new trading week gets underway – it was rising steadily towards 0.5770 by midday in Asia.

What does it mean for the Europe & US sessions?

Business sentiment in Germany has remained subdued as evident in the ifo Business Climate survey. With elections taking place over the weekend, business sentiment could see an improvement in the coming months should the Christian Democratic and Christian Social Union parties win to form a majority coalition government. Meanwhile, the final reading for consumer inflation is expected to show headline CPI accelerating for the fifth month in a row while the core is anticipated to remain unchanged at an annual rate of 2.7% for the fifth consecutive month. A positive outcome from the German elections combined with higher price pressures are likely to keep the Euro elevated as the new trading week commences.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

With no major macroeconomic data scheduled for release on Monday, market sentiments are likely to be dominated by the backdrop of Friday’s soft economic results and tariff concerns. The DXY opened on Monday to swiftly fall towards 106.20 to resume the overarching downtrend that has been in place since mid-January.

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

No major news events.

What can we expect from Gold today?

Geopolitical tensions rescinded on Friday as a fading Middle East risk premium alongside uncertainty about a potential peace deal in Ukraine limited the gains in gold. Prices for spot gold recorded its latest high of $2,954.94/oz last Thursday before retreating away from this level to close at $2,935.89/oz on Friday. This precious metal resumed the pullback as markets opened on Monday, falling towards the $2,900 mark.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After marking three consecutive weeks of higher gains, the uptrend for the Aussie remains firmly in place. This currency pair was edging towards the 0.6400 mark as Asian markets came online and the rebound in New Zealand’s retail sales will likely provide a steady tailwind for the Asia Pacific currencies.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

Retail Sales (9:45 pm GMT 23rd February)

What can we expect from NZD today?

Consumer spending in New Zealand has been abysmal since 2022 as retail sales experienced only one period of growth in 11 quarters. However, sales rebounded strongly in the final quarter of 2024 as they jumped 0.9% with the biggest increases seen in categories such as electrical and electronic goods retailing; department stores; accommodation; and food and beverage services. This recent uptick in consumer spending could provide lift for the Kiwi as the new trading week gets underway.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

Emperor’s Birthday (Bank Holiday)

What can we expect from JPY today?

Japanese banks will be closed in observance of the Emperor’s Birthday where the yen could face lower liquidity and irregular volatility on the first trading day of the week. The yen has strengthened significantly since the second week of January with USD/JPY tumbling more than 6% over this period. After closing at 149.28 last Friday, this currency pair gapped marginally lower to open at 149.12 before filling that void and reversing to resume the downtrend.

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

Medium Bearish

The Euro (EUR)

Key news events today

Germany ifo Business Climate (9:00 am GMT)

CPI (10:00 am GMT)

What can we expect from EUR today?

Business sentiment in Germany has remained subdued as evident in the ifo Business Climate survey. With elections taking place over the weekend, business sentiment could see an improvement in the coming months should the Christian Democratic and Christian Social Union parties win to form a majority coalition government. Meanwhile, the final reading for consumer inflation is expected to show headline CPI accelerating for the fifth month in a row while the core is anticipated to remain unchanged at an annual rate of 2.7% for the fifth consecutive month. A positive outcome from the German elections combined with higher price pressures are likely to keep the Euro elevated as the new trading week commences.

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?

Demand for the franc has increased since the beginning of February as a potential ceasefire between Russia and Ukraine lifted sentiment in the Euro Area, causing many currencies to appreciate over this period. The appreciation franc had caused USD/CHF to tumble under the key threshold of 0.9000 last week and this currency pair was sliding lower towards 0.8950 at the beginning of the Asia session.

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?

A positive outcome from the German elections is likely to boost overall sentiment in the Euro Area and it would also lift major currencies in this economic region, including the pound. Cable was rallying strongly towards 1.2700 as Asian markets came online and it should remain elevated as the day progresses.

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?

Stronger-than-expected retail sales strengthened the Loonie last Friday as consumer spending surged from 0.2% in the previous month to 2.7% in December. It marked the sharpest rise in retail turnover since May of 2022 as USD/CAD tumbled as low as 1.4170 last Friday. Coupled with a frail greenback, this currency pair will likely remain under pressure 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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Despite rebounding strongly at the beginning of the week to rally more than 4% from trough to peak, crude oil prices reversed sharply last Friday as WTI oil dived 3% to erase all the initial gains. This benchmark closed at $70.37 per barrel as traders assessed a fading Middle East risk premium alongside uncertainty about a potential peace deal in Ukraine. Oil prices tumbled for the fifth consecutive week, the longest period of decline since October and November of 2023 when prices notched a 7-week losing streak. WTI oil gapped lower to open at $69.80 before rising strongly to fill that vacuum. Although this benchmark raced towards the $ 70.50 mark, overhead pressures remain firmly in place.

Next 24 Hours Bias

Medium Bearish

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

DXY (US Dollar Index):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a short-term rise toward the pivot before reversing and falling toward the 1st support. Also, price has crossed below the Ichimoku cloud, signaling a shift to the downside.

Pivot: 107.49
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressure could emerge.

1st support: 105.44
Supporting reasons: Identified as an overlap support that aligns with the 50% Fibonacci retracement and the 161.8% Fibonacci extension, forming a strong Fibonacci confluence where price could find support.

1st resistance: 108.67
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation toward the 1st resistance. Also, price has crossed above the Ichimoku cloud, signaling further upside potential.

Pivot: 1.0402
Supporting reasons: Identified as an overlap support, indicating a potential level where buyers could step in.

1st support: 1.0293
Supporting reasons: Identified as a swing low support, indicating as a potential area where price could stabilize before continuing higher.

1st resistance: 1.0601
Supporting reasons: Identified as a swing high resistance that aligns with the 38.2% Fibonacci retracement 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 that aligns with the 61.8% Fibonacci projection, indicating a potential area where price could rebound.

1st support: 152.12
Supporting reasons: Identified as a swing low support that aligns with the 161.8% Fibonacci extension and 100% Fibonacci projection, forming a strong Fibonacci confluence where price could find support.

1st resistance: 159.79
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: 0.8358
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressure could emerge.

1st support: 0.8224
Supporting reasons: Identified as a multi-swing low support that aligns with the 161.8% Fibonacci extension and 78.6% Fibonacci projection, forming a strong Fibonacci confluence where price could find support.

1st resistance: 0.8462
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish
Factors contributing to the momentum: Price has crossed above the Ichimoku cloud, signaling further upside potential.

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

Pivot: 1.2501
Supporting reasons: Identified as a pullback support, indicating a potential area where buyers could step in.

1st support: 1.2362
Supporting reasons: Identified as a swing low support, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 1.2771
Supporting reasons: Identified as a multi-swing high resistance that aligns with the 100% Fibonacci projection and 50% Fibonacci retracement, forming a Fibonacci confluence that could act as a key resistance level.

GBP/JPY:

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: 187.05
Supporting reasons: Identified as a swing low support that aligns with the 78.6% Fibonacci projection, indicating a potential area where buyers could step in.

1st support: 182.95
Supporting reasons: Identified as a swing low support that aligns with the 161.8% Fibonacci extension, indicating a potential level where price could stabilize before continuing higher.

1st resistance: 194.68
Supporting reasons: Identified as an overlap 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: 0.8864
Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement and 100% Fibonacci projection, forming a strong Fibonacci confluence where price could find support.

1st support: 0.8763
Supporting reasons: Identified as an overlap support, indicating a potential level where price could stabilize before continuing higher.

1st resistance: 0.9045
Supporting reasons: Identified as a swing high resistance, indicating a potential level where price could face selling pressure.

USD/JPY:

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: 149.28
Supporting reasons: Identified as a pullback support that aligns with the 161.8% Fibonacci extension, indicating a strong level where buyers could step in.

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: 151.23
Supporting reasons: Identified as a pullback resistance, indicating a potential level where price could face selling pressure.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 1.4093

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

1st support: 1.3953
Supporting reasons: Identified as an overlap support that aligns with a 61.8% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.4279
Supporting reasons: Identified as a pullback resistance that aligns close to a 23.6% 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: 0.6313

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

1st support: 0.6144

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

1st resistance: 0.6448
Supporting reasons: Identified as an overlap 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: 0.5686

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

1st support: 0.5542

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

1st resistance: 0.5827

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

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 43,238.47

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

1st support: 41,777.16

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

1st resistance: 43,964.75

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

DE40 (DAX):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 21,877.50

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

1st support: 21,293.20

Supporting reasons: Identified as a multi-swing-low support that aligns with a confluence of Fibonacci levels i.e. the 38.2% and 50% retracements, indicating a key level where the price could stabilize once more.

1st resistance: 22,867.00
Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 5,937.54

Supporting reasons: Identified as a multi-swing-low support that aligns with a confluence of Fibonacci levels i.e. the 23.6% and 61.8% retracements, indicating a potential level where buying interests could pick up to resume the uptrend. The presence of the green Ichimoku Cloud adds further significance to the strength of the bullish momentum.

1st support: 5,818.22

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

1st resistance: 6,138.20

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

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 91,855.25

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

1st support: 73,240.64
Supporting reasons: Identified as a pullback support that aligns close to a 161.8% Fibonacci extension, indicating a potential level where the price could stabilize once more.

1st resistance: 101,963.41
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8 Fibonacci retracement, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 2,936.51

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

1st support: 2,347.98
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 3,311.17
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 69.62

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

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

1st resistance: 72.58
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish
Overall momentum of the chart: Bullish
Price could potentially drop further to the pivot in the short term before bouncing from there and rising to the 1st resistance. Additionally, price has crossed above the Ichimoku cloud, signaling further upside potential.

Pivot: 2867.02
Supporting reasons: Identified as a pullback support, indicating a potential area where buyers could step in.

1st support: 2790.27
Supporting reasons: Identified as a pullback support, acting as a potential level where price could stabilize before continuing higher.

1st resistance: 2953.33
Supporting reasons: Identified as a multi-swing high resistance that aligns with the 161.8% Fibonacci extension, forming a strong confluence level where price could face selling pressure.

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

IC Markets Asia Fundamental Forecast | 24 February 2025

What happened in the U.S. session?

The U.S. financial markets faced intense volatility last Friday as a combination of economic concerns and disappointing data triggered a sharp sell-off in the stock exchanges while the demand for the greenback rekindled. Weak-than-expected economic indicators such as the flash Composite PMI report and the University of Michigan’s Consumer Sentiment survey came in soft, particularly for the services sector which contracted for the first time in over two years in February. In addition, ongoing uncertainties surrounding President Donald Trump’s tariff policies, including potential new duties on lumber, cars, semiconductors and pharmaceuticals contributed to a jittery environment. The dollar index (DXY) stabilized at around 106.40 on Friday before edging higher to close at 106.64. However, this index still recorded its fourth successive week of decline.

What does it mean for the Asia Session?

Consumer spending in New Zealand had been abysmal since 2022 as retail sales experienced only one period of growth in 11 quarters. However, sales rebounded strongly in the final quarter of 2024 as it jumped 0.9% with the biggest increases seen in categories such as electrical and electronic goods retailing; department stores; accommodation; and food and beverage services. This recent uptick in consumer spending could provide lift for the Kiwi as the new trading week gets underway.

In addition, Japanese banks will be closed in observance of the Emperor’s Birthday where the yen could face lower liquidity and irregular volatility on the first trading day of the week. The yen has strengthened significantly since the second week of January with USD/JPY tumbling more than 6% over this period. After closing at 149.28 last Friday, this currency pair gapped marginally lower to open at 149.12 before filling that void and reversing to resume the downtrend.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

With no major macroeconomic data scheduled for release on Monday, market sentiments are likely to be dominated by the backdrop of Friday’s soft economic results and tariff concerns. The DXY opened on Monday to swiftly fall towards 106.20 to resume the overarching downtrend that has been in place since mid-January.

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

No major news events.

What can we expect from Gold today?

Geopolitical tensions rescinded on Friday as a fading Middle East risk premium alongside uncertainty about a potential peace deal in Ukraine limited the gains in gold. Prices for spot gold recorded its latest high of $2,954.94/oz last Thursday before retreating away from this level to close at $2,935.89/oz on Friday. This precious metal resumed the pullback as markets opened on Monday, falling towards the $2,900 mark.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After marking three consecutive weeks of higher gains, the uptrend for the Aussie remains firmly in place. This currency pair was edging towards the 0.6400 mark as Asian markets came online and the rebound in New Zealand’s retail sales will likely provide a steady tailwind for the Asia Pacific currencies.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

Retail Sales (9:45 pm GMT 23rd February)

What can we expect from NZD today?

Consumer spending in New Zealand had been abysmal since 2022 as retail sales experienced only one period of growth in 11 quarters. However, sales rebounded strongly in the final quarter of 2024 as it jumped 0.9% with the biggest increases seen in categories such as electrical and electronic goods retailing; department stores; accommodation; and food and beverage services. This recent uptick in consumer spending could provide lift for the Kiwi as the new trading week gets underway.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

Emperor’s Birthday (Bank Holiday)

What can we expect from JPY today?

Japanese banks will be closed in observance of the Emperor’s Birthday where the yen could face lower liquidity and irregular volatility on the first trading day of the week. The yen has strengthened significantly since the second week of January with USD/JPY tumbling more than 6% over this period. After closing at 149.28 last Friday, this currency pair gapped marginally lower to open at 149.12 before filling that void and reversing to resume the downtrend.

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

Medium Bearish

The Euro (EUR)

Key news events today

Germany ifo Business Climate (9:00 am GMT)

CPI (10:00 am GMT)

What can we expect from EUR today?

Business sentiment in Germany has remained subdued as evident in the ifo Business Climate survey. With elections taking place over the weekend, business sentiment could see an improvement in the coming months should the Christian Democratic and Christian Social Union parties win to form a majority coalition government. Meanwhile, the final reading for consumer inflation is expected to show headline CPI accelerating for the fifth month in a row while the core is anticipated to remain unchanged at an annual rate of 2.7% for the fifth consecutive month. A positive outcome from the German elections combined with higher price pressures are likely to keep the Euro elevated as the new trading week commences.

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?

Demand for the franc has increased since the beginning of February as a potential ceasefire between Russia and Ukraine lifted sentiment in the Euro Area, causing many currencies to appreciate over this period. The appreciation franc had caused USD/CHF to tumble under the key threshold of 0.9000 last week and this currency pair was sliding lower towards 0.8950 at the beginning of the Asia session.

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?

A positive outcome from the German elections is likely to boost overall sentiment in the Euro Area and it would also lift major currencies in this economic region, including the pound. Cable was rallying strongly towards 1.2700 as Asian markets came online and it should remain elevated as the day progresses.

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?

Stronger-than-expected retail sales strengthened the Loonie last Friday as consumer spending surged from 0.2% in the previous month to 2.7% in December. It marked the sharpest rise in retail turnover since May of 2022 as USD/CAD tumbled as low as 1.4170 last Friday. Coupled with a frail greenback, this currency pair will likely remain under pressure 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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Despite rebounding strongly at the beginning of the week to rally more than 4% from trough to peak, crude oil prices reversed sharply last Friday as WTI oil dived 3% to erase all the initial gains. This benchmark closed at $70.37 per barrel as traders assessed a fading Middle East risk premium alongside uncertainty about a potential peace deal in Ukraine. Oil prices tumbled for the fifth consecutive week, the longest period of decline since October and November of 2023 where prices notched a 7-week losing streak. WTI oil gapped lower to open at $69.80 before rising strongly to fill that vacuum. Although this benchmark raced towards the $70.50-mark, overhead pressures remain firmly in place.

Next 24 Hours Bias

Medium Bearish

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

US Markets Smashed as Data Falls – Nasdaq Down 2%

US stocks took a significant hit in trading on Friday as data once again increased investor concerns in the world’s biggest economy. All three major stock indices fell sharply on the day, with the S&P recording its biggest loss since mid-December by falling 1.71%, the Dow by 1.69%, and the Nasdaq by 2.20%. US Treasury yields also declined sharply after Services PMI figures came in well below expectations – the two‐year yield dropped by 7.6 basis points to 4.198%, and the ten‐year by 8.3 basis points to 4.431%. The dollar edged higher on the day as its haven status counteracted the immediate knee-jerk reaction, with the DXY closing up 0.1% at 106.61. Oil prices also fell considerably as investors priced in a more peaceful environment in the Middle East and increased US stockpiles, with Brent dropping 2.7% to $74.49 and WTI falling 3.1% to $70.38 a barrel, whilst gold had a relatively quiet day, declining just 0.1% to $2,936.38.

Dollar Poised for Big Moves Ahead This Week

The US dollar had a relatively quiet day on Friday, while other financial products experienced significant moves as it found itself caught between the ‘rock’ of poor data and the ‘hard place’ of haven flows. However, FX traders do not expect this situation to last long – and we have already seen decent moves on the Asian open this morning – as they believe we could be in for some good trending markets over the next few weeks. US Treasury yields took a hit on Friday, and it is unusual to see the dollar remain resilient given the magnitude of the moves in bonds. Consequently, traders feel there may be some catch-up later in the day when the US market opens. We have seen a good move in USD/JPY over the past week as it broke into fresh downside ranges, and traders are now looking to some of its contemporaries for similar moves. The euro will probably be at the top of the list given the potential stemming from the German election, but significant inflation data due later in the week could cause some of the other majors to breach technical levels and move sharply.

Quiet Calendar Day to Start the Week

The macroeconomic calendar appears rather sparse as the first trading day of the week begins. However, after substantial moves in New York on Friday and further geopolitical updates over the weekend, the next three sessions could be anything but quiet. We have already seen some gapping in the euro on the Asian open following a government change in Germany, and further updates from Europe’s largest economy are likely to result in more moves for the currency in the sessions ahead. Asian markets are set to open on the back foot today after the significant drops on Wall Street, and investors are hoping for some positive news to slow the momentum. However, with little on the event calendar throughout the trading day, any such update will have to come from the newswires rather than underlying economic fundamentals.

The post General Market Analysis – 24/02/25 first appeared on IC Markets | Official Blog.

The macroeconomic calendar is more subdued this week, but there are still some major events scheduled that could trigger significant market moves. The Asian Monday open looks vulnerable for euro traders, given that the German Federal Elections took place over the weekend, which could lead to heightened volatility in the first session of the week.

Data is relatively thin on the ground, although we do see more Tier 1 releases from the US this week, culminating with the Fed’s favourite inflation indicator, the Core PCE Price Index, on Friday. Additionally, Aussie-dollar traders will be paying close attention to the key CPI data when it is released midweek following last week’s ‘hawkish’ cut from the Reserve Bank of Australia.

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

It could be a lively opening session of the day for Euro traders, with results from the German Federal election set to filter through and liquidity should be thinner to add to the mix with Japanese markets on holiday. There is little else on the calendar during the other two sessions, apart from the German IFO data early in the London day, although expect the impact from that to be overshadowed by the election results.

Another quiet day on the macroeconomic calendar, with little to move the dial for both of the first two sessions of the day, although we do hear from Buba President Nagel during the Euro session. We do have the first key US data releases in the New York day, with CB Consumer Confidence number due out alongside the Richmond Manufacturing Index data.

Australian markets will be in focus early in the Asian session, with key inflation CPI data due out; focus will then move north to Japanese markets for more inflation data, this time the BOJ Core CPI number, although the Aussie date is expected to have more of an impact. Once again, there is little scheduled in the European day, but we have more US data once New York opens, with New Home Sales numbers due out as well as the usual weekly Crude Oil Inventory data.

The event calendar does pick up for the last couple of sessions of the day. There is nothing of note in the Asian session on Thursday, but once London opens we have both the Spanish CPI data due as well as Swiss GDP numbers. There is a big data dump from the US, with the Prelim GDP, Durable Goods and Weekly Unemployment Claims numbers all out at the same time early in the day. They are followed up later by the Pending Homes Sales update.

It should be a busy last few sessions of the week on Friday, with key data out in all three time zones. Tokyo CPI numbers will keep Yen traders on their toes in the Asian session before London opens and we have the key German Prelim CPI data out. However, the US session probably has the propensity to move the market the most of Friday (and maybe the pick of the bunch for the whole week), with Canadian GDP numbers out alongside the key US Core PCE Price Index number. These are followed up by the Chicago PMI numbers later in the day. And sharp-eyed traders will also notice that we have key Chinese Manufacturing and Non-Manufacturing numbers out over the weekend.

The post The Week Ahead – Week Commencing 24 February 2025 first appeared on IC Markets | Official Blog.