IC Markets Asia Fundamental Forecast | 13 February 2025

What happened in the U.S. session?

Consumer inflation in the U.S. surprised to the upside as January’s figures came in hot. On a monthly basis, both headline and core CPI rose higher than their respective estimates while on an annualized basis, headline CPI accelerated for the fourth successive month and the core marked its first month of acceleration since September. However, the backdrop of ongoing tariffs implementation by the U.S. and walk-backs by President Donald Trump are influencing the broader market sentiment. Demand for the dollar initially spiked causing the dollar index (DXY) to surge past 108.50 but it quickly reversed to tumble under 108 – this index was drifting lower towards 107.80 as Asian markets came online.

What does it mean for the Asia Session?

Inflation expectations moderated significantly lower since the first quarter of 2023, easing from 3.3% to as low as 2.0% in the third quarter of last year. However, this metric increased slightly in the final quarter of 2024 as it rose to 2.1%. Should inflation expectations tick higher in the latest report, it could provide the Kiwi with a near-term boost.

The Dollar Index (DXY)

Key news events today

PPI (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from DXY today?

Following the hot CPI result on Wednesday, traders will be keeping a close eye on the Producer Price Index (PPI) which measures wholesale inflation. Should wholesale prices also experience higher price pressures, demand for the dollar is likely to spike once more. Meanwhile, unemployment claims have been trending lower since December, a sign of labour market stability. Should claims also continue to edge lower, the dollar could receive a second bullish catalyst later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 29 January.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• December’s Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee will roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month and redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• In addition, the Committee will reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
• The next meeting runs from 18 to 19 March 2025.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

PPI (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from Gold today?

Following the hot CPI result on Wednesday, traders will be keeping a close eye on the Producer Price Index (PPI) which measures wholesale inflation. Should wholesale prices also experience higher price pressures, demand for the dollar is likely to spike once more. Meanwhile, unemployment claims have been trending lower since December, a sign of labour market stability. Should claims also continue to edge lower, the dollar could receive a second bullish catalyst later today. Whatever the outcome, volatility for gold will likely spike during the U.S. session.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie whipsawed on Wednesday as a hot CPI result of the U.S. initially sent it diving under 0.6250 to mark an overnight low of 0.6235. However, this currency pair reversed sharply and it bounced straight back up to recover the losses and was floating around 0.6280 at the beginning of the Asia session on Thursday.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• 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. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• 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 18 February 2025.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

Inflation Expectations (2:00 am GMT)

What can we expect from NZD today?

Inflation expectations moderated significantly lower since the first quarter of 2023, easing from 3.3% to as low as 2.0% in the third quarter of last year. However, this metric increased slightly in the final quarter of 2024 as it rose to 2.1%. Should inflation expectations tick higher in the latest report, it could provide the Kiwi with a near-term boost. 

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Fueled by a hot CPI print in the United States, USD/JPY rallied more than 1.5% on Wednesday as it surged past 154 to hit an overnight high of 154.79. Combined with the widening gap between the U.S. and Japanese bond yields, this currency pair will likely remain elevated to make a strong push towards 155 on Thursday.

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 Bullish

The Euro (EUR)

Key news events today

Industrial Production (10:00 am GMT)

What can we expect from EUR today?

Industrial activity in the Euro Area has been weak throughout 2024 as the manufacturing sector remained subdued. After growing 0.2% in October and November respectively, December’s figures point to a sharp decline of 0.6% to highlight the ongoing frailty of this sector. The Euro hit an overnight high of 1.0428 but could face headwinds if industrial production deteriorates more than the market consensus.

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

CPI (7:30 am GMT)

What can we expect from CHF today?

Inflationary pressures have dissipated significantly in Switzerland as both headline and core CPI eased under 1% in the fourth quarter of last year. January’s inflation figures are expected to show further disinflation, a result that will likely add further overhead pressures on the franc. USD/CHF has remained buoyed since the beginning of the year and softer inflation could drive this currency pair towards the 0.9200 level by the end of this week.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

GDP (7:00 am GMT)

What can we expect from GBP today?

The British economy grew 0.1% MoM in November as it recovered from two consecutive months of contraction in September and October with the services sector acting as the largest contributor, driven by accommodation and food service activities; computer programming and consultancy; and telecommunications. This expansion, albeit soft, is expected to continue in December with a gain of 0.1% once more. Cable has reversed off its January low of 1.2100 as demand for the greenback faltered, lifting this currency pair above 1.2400 in the second week of February.

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?

After threats of tariffs imposed on Canadian imports into the U.S. faded, the Loonie has not seen much action as USD/CAD has hovered above the threshold of 1.4300 since the first week of February. This currency pair continues to range sideways but looks set to notch its second successive week of decline.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following a large increase in the API stockpiles, the EIA inventories recorded their third consecutive week of higher builds as nearly 4.1M barrels of crude were added to storage in the latest report on Wednesday, highlighting the ongoing demand weakness in the United States. Coupled with ceasefire hopes between Russia and Ukraine, geopolitical tensions in this region could ease after U.S. President Donald Trump spoke with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy about starting negotiations “immediately” to end the war in Ukraine. Following a strong rally of 3.2% at the beginning of this week, WTI oil reversed sharply to dive over 2.8% overnight – this benchmark was floating above $71 per barrel as Asian markets came online on Thursday.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 13 February 2025 first appeared on IC Markets | Official Blog.

US Markets Hit by Inflation Data – Dow Down 0.5%

US inflation data came in stronger than expected last night, adding to concerns that the FOMC will not be cutting interest rates anytime soon. The Dow tumbled 0.5%, the S&P lost 0.27%, while the Nasdaq managed a slight 0.03% gain. US Treasury yields surged higher once again, with the 2-year yield adding 7.2 basis points to reach 4.355% and the benchmark 10-year gaining 8.6 basis points to move up to 4.621%. The dollar initially spiked on the data but later gave up its gains, with the DXY finishing the day just 0.03% lower at 107.98.

Oil prices fell after reports that the US and Russia are exploring a deal to end the war in Ukraine, with Brent down 2.61% to $74.99 and WTI dropping 2.66% to $71.39 per barrel. Gold remained relatively flat, rising just 0.05% to $2,903.08 after an earlier decline following the US data release.

Gold in Focus for Traders – Are We Near a Top?

Gold prices have surged in recent weeks amid market uncertainty, primarily due to the new US government and potential tariff plans. However, some traders now believe that the rally may be overextended, as the precious metal has reached record highs on eight separate occasions this year.

US Treasury yields climbed higher again last night after inflation data suggested that Federal Reserve rate cuts may be delayed, or potentially not happen at all. The increased returns on dollar holdings could lead to a reduction in large gold positions. Additionally, markets appear to be reacting less dramatically to geopolitical developments, as traders adjust to the new US administration. This shift could trigger an unwinding of safe-haven flows that have contributed to gold’s recent surge.

While it is difficult to go against the prevailing trend, it is notable that many market participants are now looking for a potential top in the current environment.

Full Calendar Day Ahead for Traders

Financial markets are set for a busy day as traders continue to digest last night’s US inflation data while preparing for further economic updates throughout today’s sessions.

In the Asian session, New Zealand will be in focus as key inflation data is set for release midway through the day. Early in the European session, attention will turn to the UK, where GDP data is due, before shifting across the Channel to Switzerland for the release of key CPI figures shortly after.

Later, the spotlight will move back to the US, where more tier-one economic data is scheduled for release. The latest inflation figures will be published in the form of PPI data, while the weekly Unemployment Claims report will also be released at the same time.

The post General Market Analysis – 13/02/25 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 13/2/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.29%, Shanghai Composite up 0.01%, Hang Seng up 1.56% ASX up 0.6%
• Commodities : Gold at $2910.35 (-0.73%), Silver at $32.15 (-0.48%), Brent Oil at $76.19 (0.39%), WTI Oil at $73.00 (-0.43%)
• Rates : US 10-year yield at 4.4550, UK 10-year yield at 4.506, Germany 10-year yield at 2.427

News & Data:

• (CAD) Building Permits m/m  11.0% to 1.6% expected

Markets Update:

Asia-Pacific markets traded mixed on Wednesday as investors assessed the impact of U.S. President Donald Trump’s tariffs on regional economies. Meanwhile, U.S. Federal Reserve Chair Jerome Powell reiterated the central bank’s focus on controlling inflation and emphasized that policymakers were in no rush to lower interest rates.

In regional markets, Australia’s S&P/ASX 200 rose 0.5%, while Japan’s Nikkei 225 gained 0.23% after resuming trading post-holiday. However, the Topix dipped 0.2%. South Korea’s Kospi climbed 0.31%, whereas the small-cap Kosdaq declined 0.64%. Hong Kong’s Hang Seng Index surged 1.56%, but mainland China’s CSI 300 slipped 0.13% in volatile trading. India is set to release its January inflation data, with the Nifty 50 opening 0.94% lower and the BSE Sensex falling 0.97%. Investors also await SoftBank Group’s fiscal third-quarter earnings later today.

U.S. markets closed mixed overnight. The S&P 500 edged up 0.03% to 6,068.50, while the Nasdaq Composite dropped 0.36% to 19,643.86. The Dow Jones Industrial Average gained 123.24 points, or 0.28%, to 44,593.65. Powell’s testimony comes amid political uncertainty, as Trump pushes for tariffs on trading partners, creating uncertainty about the administration’s stance toward the Fed.

Powell reaffirmed that the current policy stance, with the benchmark Fed funds rate set between 4.25% and 4.5%, offers flexibility. The Federal Open Market Committee left rates unchanged in its late-January meeting, signaling a cautious approach to monetary policy amid ongoing economic and political uncertainties.

Upcoming Events: 

• 01:30 PM GMT – USD Core CPI m/m
• 01:30 PM GMT – USD CPI m/m
• 01:30 PM GMT – USD CPI y/y

The post Wednesday 12th February 2025: Asia-Pacific Markets Mixed as Investors Weigh Tariffs and Fed Policy  first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 12 February 2025

What happened in the Asia session?

Japanese markets reopened this morning following Tuesday’s closure in observance of National Foundation Day, signalling a resumption of regular liquidity for the yen. USD/JPY rose strongly as it surged from 152.40 towards 153.50, with the widening gap between the U.S. and Japanese bond yields continuing to drive speculative selling in the yen.

What does it mean for the Europe & US sessions?

Looking at U.S. crude oil inventories, the API stockpiles swelled for the fourth consecutive week, signalling weaker demand. More than 9M barrels of crude were added to storage in the latest report following an increase of 5M in the previous week. The EIA report is due for release on Wednesday and should inventories continue to build further, oil prices could likely face strong headwinds again. After hitting a high of $73.68 per barrel on Tuesday, WTI oil slipped under $73 by midday in Asia.

The Dollar Index (DXY)

Key news events today

CPI (1:30 pm GMT)

Fed Chair Powell Testimony (3:00 pm GMT)

What can we expect from DXY today?

After accelerating from an annual rate of 2.4% in September to 2.9% in December 2024, headline consumer inflation in the U.S. is now expected to ‘stall’ in January 2025. Forecasts point to headline CPI remaining unchanged from the previous month, highlighting dissipating price pressures in January. Should the overall result point to a soft CPI print, demand for the greenback could wane even further. After which, Federal Reserve Chair Jerome Powell resumes the second and final day of his testimony on Wednesday, this time before the House Financial Services Committee in Washington D.C. where he will first deliver a prepared statement before facing a question-and-answer session. Powell’s responses on monetary policy, inflation and the labour market are likely to increase market volatility, especially if there are any surprises or shifts from him.

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

CPI (1:30 pm GMT)

Fed Chair Powell Testimony (3:00 pm GMT)

What can we expect from Gold today?

After accelerating from an annual rate of 2.4% in September to 2.9% in December 2024, headline consumer inflation in the U.S. is expected to ‘stall’ in January 2025. Forecasts point to headline CPI remaining unchanged from the previous month, highlighting dissipating price pressures in January. Should the overall result point to a soft CPI print, demand for the greenback could wane even further. After which, Federal Reserve Chair Jerome Powell resumes the second and final day of his testimony on Wednesday, this time before the House Financial Services Committee in Washington D.C. where he will first deliver a prepared statement before facing a question-and-answer session. Powell’s responses on monetary policy, inflation and the labour market are likely to increase market volatility, especially if there are any surprises or shifts from him. Although spot prices for gold retreated from Monday’s record high, this precious metal is likely to see continued demand driven by safe-haven flows due to the newly imposed tariffs on steel and aluminium imports destined for the United States.

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?

Waning demand for the greenback kept the Aussie elevated overnight. This currency breached above 0.6300 as Asian markets came online on Wednesday and it could continue to edge higher as the day progresses.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• 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. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• 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 18 February 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?

Just like its Pacific neighbour, the Kiwi remained supported as it climbed above 0.5650 at the beginning of Wednesday’s Asia session. This currency pair should continue its upward momentum as demand for the dollar weakens.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Japanese markets reopened this morning following Tuesday’s closure in observance of National Foundation Day, signalling a resumption of regular liquidity for the yen. USD/JPY rose strongly as it surged from 152.40 towards 153.50, with the widening gap between the U.S. and Japanese bond yields continuing to drive speculative selling in the yen.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 24 January, by an 8-1 majority vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been at around 3% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned.
• Inflation expectations have risen moderately while underlying CPI inflation has been increasing gradually toward the price stability target of 2%. With wages continuing to rise, there has been an increase in moves to reflect higher costs, such as increased personnel expenses and distribution costs, in selling prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 March 2025.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro hit an overnight high of 1.0381 as demand for the greenback faltered. This currency pair pulled back slightly but it is likely to resume its ascend on Wednesday, especially if U.S. consumer inflation cools.

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?

The widening gap between the U.S. and Swiss bond yields continues to drive speculative selling in the franc, keeping USD/CHF above the 0.9100 mark. This currency pair reached an overnight high of 0.9140 and looks set to notch its fifth successive day of higher gains.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

During his speech at the University of Chicago Booth School of Business, Bank of England (BoE) Governor Andrew Bailey’s speech emphasized a cautious approach to further rate cuts as inflation expectations ticked up in recent months, although noting that this uptick should be temporary. Despite the guarded tone, the Pound appreciated as demand for the greenback faltered under rising concerns of a global trade war. Cable hit an overnight high of 1.2452 and is likely to 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

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Rising concerns of a global trade war have tempered demand for the U.S. dollar, driving USD/CAD towards 1.4300. This threshold has served as a key support since early January and a clean break below it could see further downside for this currency pair.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

EIA Crude Oil Inventories (3:30 pm GMT)

What can we expect from Oil today?

Crude oil prices rose strongly at the beginning of this week as U.S. sanctions imposed on Russia and Iran’s oil exports elevated concerns on supply disruptions for this commodity. WTI oil rallied more than 3% over this period to hit an overnight high of $73.68 per barrel but pulled back sharply as the API stockpiles swelled for the fourth consecutive week, a sign of weaker demand in the United States. More than 9M barrels of crude were added to storage in the latest report following an increase of 5M in the previous week. Should the EIA inventories continue to build further, oil prices could likely face strong headwinds again in the latter part of Wednesday.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 12 February 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bullish 

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

Pivot: 107.97

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

1st support: 107.14
Supporting reasons: Identified as an overlap support that aligns close to the 61.8% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 108.90
Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 1.0325

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

1st support: 1.0259

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

1st resistance: 1.0444
Supporting reasons:  Identified as an overlap resistance, indicating a potential area that could halt any further upward movement. 

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 157.13

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

1st support: 155.47

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

1st resistance: 159.41
Supporting reasons: Identified as a pullback resistance that aligns close to the 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 0.8372

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

1st support: 0.8270

Supporting reasons: Identified as an overlap support that aligns close to the 61.8% Fibonacci projection, indicating a potential level where price could find support once again.

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

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 1.2468

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

1st support: 1.2306

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

1st resistance: 1.2571
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 191.44

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

1st support: 189.22
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once again.

1st resistance: 194.60
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 0.9011

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

1st support: 0.8902
Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 0.9181
Supporting reasons: Identified as a multi-swing high resistance that aligns with the 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 153.84

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

1st support: 151.36
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 155.29
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Neutral

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

Pivot: 1.4279
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where buying interests could pick up to stage a minor rebound.

1st support: 1.4178
Supporting reasons: Identified as a pullback support, indicating a key level where the price could stabilize once more.

1st resistance: 1.4404
Supporting reasons: Identified as an overlap 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 has made a bullish break through the pivot and could potentially rise towards the 1st resistance.

Pivot: 0.6292

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

1st support: 0.6225

Supporting reasons: Identified as a pullback support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6346
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 0.5590

Supporting reasons:  Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 0.5538

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

1st resistance: 0.5693

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

US30 (DJIA):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 44,618.56

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

1st support: 43,835.56

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

1st resistance: 44,978.36

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

DE40 (DAX):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 21,948.10

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

1st support: 21,528.30

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

1st resistance: 22,237.83
Supporting reasons: Identified as a resistance that aligns with a confluence of Fibonacci levels i.e. a 61.8% projection and a 161.8% extension, 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 has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 6,005.90

Supporting reasons: Identified as a multi-swing-low support that aligns with a 50% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 5,919.31

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

1st resistance: 6,099.90

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

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bearish break through this level to fall towards the 1st support.

Pivot: 94,852.52

Supporting reasons: Identified as a potential breakout level where the strong bearish momentum could drive the price lower.

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

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

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 2,855.60

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: 2,472.17
Supporting reasons: Identified as a swing-low support that aligns close to a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 3,028.21
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 73.85
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 71.19
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 75.99
Supporting reasons: Identified as a swing-high resistance that aligns with a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

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

Pivot: 2910.66

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

1st support: 2882.16

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

1st resistance: 2938.59

Supporting reasons: Identified as a resistance that aligns with the 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

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The post Wednesday 12th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 12 February 2025

What happened in the U.S. session?

Federal Reserve Chair Jerome Powell’s hearing before the Senate Banking Committee highlighted several key points such as policy flexibility, inflation and the strength of the U.S. economy. Powell emphasized that there is no rush to adjust the current stance of monetary policy, indicating a patient approach to policy adjustments as inflation continues to evade the Fed’s target of 2% while economic activity remains robust and the labour market showed resilience, despite some softness in recent months. Despite communicating a neutral outlook on future monetary policy action, the dollar index (DXY) drifted lower as the developments surrounding global trade tariffs overshadowed Powell’s testimony.

What does it mean for the Asia Session?

Japanese markets reopened this morning following Tuesday’s closure in observance of National Foundation Day, signalling a resumption of regular liquidity for the yen. USD/JPY rose strongly as it surged from 152.40 towards 153.50, with the widening gap between the U.S. and Japanese bond yields continuing to drive speculative selling in the yen.

The Dollar Index (DXY)

Key news events today

CPI (1:30 pm GMT)

Fed Chair Powell Testimony (3:00 pm GMT)

What can we expect from DXY today?

After accelerating from an annual rate of 2.4% in September to 2.9% in December 2024, headline consumer inflation in the U.S. is now expected to ‘stall’ in January 2025. Forecasts point to headline CPI remaining unchanged from the previous month, highlighting dissipating price pressures in January. Should the overall result point to a soft CPI print, demand for the greenback could wane even further. After which, Federal Reserve Chair Jerome Powell resumes the second and final day of his testimony on Wednesday, this time before the House Financial Services Committee in Washington D.C. where he will first deliver a prepared statement before facing a question-and-answer session. Powell’s responses on monetary policy, inflation and the labour market are likely to increase market volatility, especially if there are any surprises or shifts from him.

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

CPI (1:30 pm GMT)

Fed Chair Powell Testimony (3:00 pm GMT)

What can we expect from Gold today?

After accelerating from an annual rate of 2.4% in September to 2.9% in December 2024, headline consumer inflation in the U.S. is expected to ‘stall’ in January 2025. Forecasts point to headline CPI remaining unchanged from the previous month, highlighting dissipating price pressures in January. Should the overall result point to a soft CPI print, demand for the greenback could wane even further. After which, Federal Reserve Chair Jerome Powell resumes the second and final day of his testimony on Wednesday, this time before the House Financial Services Committee in Washington D.C. where he will first deliver a prepared statement before facing a question-and-answer session. Powell’s responses on monetary policy, inflation and the labour market are likely to increase market volatility, especially if there are any surprises or shifts from him. Although spot prices for gold retreated from Monday’s record high, this precious metal is likely to see continued demand driven by safe-haven flows due to the newly imposed tariffs on steel and aluminium imports destined for the United States.

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?

Waning demand for the greenback kept the Aussie elevated overnight. This currency breached above 0.6300 as Asian markets came online on Wednesday and it could continue to edge higher as the day progresses.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• 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. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• 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 18 February 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?

Just like its Pacific neighbour, the Kiwi remained supported as it climbed above 0.5650 at the beginning of Wednesday’s Asia session. This currency pair should continue its upward momentum as demand for the dollar weakens.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Japanese markets reopened this morning following Tuesday’s closure in observance of National Foundation Day, signalling a resumption of regular liquidity for the yen. USD/JPY rose strongly as it surged from 152.40 towards 153.50, with the widening gap between the U.S. and Japanese bond yields continuing to drive speculative selling in the yen.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 24 January, by an 8-1 majority vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been at around 3% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned.
• Inflation expectations have risen moderately while underlying CPI inflation has been increasing gradually toward the price stability target of 2%. With wages continuing to rise, there has been an increase in moves to reflect higher costs, such as increased personnel expenses and distribution costs, in selling prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 March 2025.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro hit an overnight high of 1.0381 as demand for the greenback faltered. This currency pair pulled back slightly but it is likely to resume its ascend on Wednesday, especially if U.S. consumer inflation cools.

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?

The widening gap between the U.S. and Swiss bond yields continues to drive speculative selling in the franc, keeping USD/CHF above the 0.9100 mark. This currency pair reached an overnight high of 0.9140 and looks set to notch its fifth successive day of higher gains.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

During his speech at the University of Chicago Booth School of Business, Bank of England (BoE) Governor Andrew Bailey’s speech emphasized a cautious approach to further rate cuts as inflation expectations ticked up in recent months, although noting that this uptick should be temporary. Despite the guarded tone, the Pound appreciated as demand for the greenback faltered under rising concerns of a global trade war. Cable hit an overnight high of 1.2452 and is likely to 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

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Rising concerns of a global trade war have tempered demand for the U.S. dollar, driving USD/CAD towards 1.4300. This threshold has served as a key support since early January and a clean break below it could see further downside for this currency pair.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

EIA Crude Oil Inventories (3:30 pm GMT)

What can we expect from Oil today?

Crude oil prices rose strongly at the beginning of this week as U.S. sanctions imposed on Russia and Iran’s oil exports elevated concerns on supply disruptions for this commodity. WTI oil rallied more than 3% over this period to hit an overnight high of $73.68 per barrel but pulled back sharply as the API stockpiles swelled for the fourth consecutive week, a sign of weaker demand in the United States. More than 9M barrels of crude were added to storage in the latest report following an increase of 5M in the previous week. Should the EIA inventories continue to build further, oil prices could likely face strong headwinds again in the latter part of Wednesday.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Asia Fundamental Forecast | 12 February 2025 first appeared on IC Markets | Official Blog.

Foreign exchange traders are preparing for a busy final session today, with the key US CPI data due to come out early in a New York session that is likely to be preceded by relatively quiet days in both Asia and Europe. Expectations are for a 0.3% month-on-month increase for the CPI and Core CPI numbers and a 2.9% increase for the year-on-year data. Anything off those prints should see big moves in the market, and anything more than 0.2% will see large moves. Stronger data will put the Fed under pressure to pull interest rate expectations further down the track and will see the dollar take off, whilst weaker prints will see a continuation of recent dollar weakness and pull rate cut expectations in.

Cable is looking like one of the best pairs to trade on the data, and we could see significant moves if we do get those prints off expectations. It has rallied nicely up to levels just north of 1.2400, and a weaker result will see it challenge the topside resistance trendline on the hourly chart near 1.2500. A stronger number opens the way for a move swiftly back to recent levels, with support at 1.2320.

Resistance 2: 1.2549 – 2025 High
Resistance 1: 1.2500 – Trendline Resistance

Support 1: 1.2320 – Trendline Support
Support 2: 1.2242 – February Low

The post Trade Cable on the US CPI Data first appeared on IC Markets | Official Blog.

US Markets Tread Water Ahead of Data – Nasdaq Down 0.3%

US markets experienced a mixed session yesterday as investors looked ahead to tonight’s key inflation data. The three major stock indices all closed relatively flat, with the Dow up 0.28%, the S&P edging just 0.03% higher, and the Nasdaq declining by 0.36%. The usual correlation between US Treasury yields and the dollar failed to materialise, with the dollar falling on the day—the DXY down 0.37%—while yields pushed higher, with the 2-year yield up 0.90 basis points to 4.283% and the 10-year yield rising 3.9 basis points to 4.535%.

Oil prices moved higher within recent ranges as sanctions influenced supply concerns, weighing on sentiment. Brent rose 1.29% to $76.85, while WTI climbed 1.16% to $73.16. Meanwhile, gold took a breather after its recent meteoric rise, with some profit-taking flows emerging ahead of the US data, finishing down just 0.1% on the day at $2,896.62.

Markets Focus on Data and Central Banks

There appears to have been a notable shift in market reactions to geopolitical updates this week, perhaps indicating a change in investor focus across financial products. In recent weeks, we have seen significant spikes in asset prices following updates from President Trump and the new administration, particularly regarding tariffs. However, the market impact of such developments seems to have diminished markedly this week. This suggests an adjustment to the new ‘norm’—while traders will still react strongly to confirmed policy updates, they now seem to be prioritising underlying fundamentals.

As a result, market focus has returned to economic data, with tonight’s key CPI release likely to be a major catalyst for price movements.

Traders Focus on US Session in the Day Ahead

Traders expect relatively quiet and range-bound conditions during the first two sessions of the day, with little scheduled on the event calendar ahead of the main data release once New York opens. The US CPI numbers are undoubtedly the highlight of the day, with expectations of a 0.3% month-on-month increase for both CPI and Core CPI, and a 2.9% year-on-year rise. Any deviation from these forecasts is likely to trigger significant market moves, particularly in anticipation of future Fed interest rate decisions.

Jerome Powell will also deliver the second day of his semi-annual testimony to Congress today, though he is expected to maintain his recent stance. Later in the day, oil traders will be closely watching the latest US inventory data for further market cues.

The post General Market Analysis – 12/02/25 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 12/2/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.13%, Shanghai Composite up 0.61%, Hang Seng up 1.86% ASX down 0.34%
• Commodities : Gold at $2915.35 (0.93%), Silver at $32.75 (0.38%), Brent Oil at $75.19 (0.69%), WTI Oil at $71.54 (0.73%)
• Rates : US 10-year yield at 4.487, UK 10-year yield at 4.476, Germany 10-year yield at 2.377

News & Data:

• (EUR) Sentix Investor Confidence  -12.7 to -16.4 expected

Markets Update:

Asia-Pacific markets traded mixed on Tuesday as investors evaluated U.S. President Donald Trump’s new tariff measures. On Monday, Trump signed an order imposing a 25% tariff on steel and aluminum imports into the U.S., raising concerns about potential trade tensions.

In response, Australia’s S&P/ASX 200 remained flat, while South Korea’s Kospi gained 0.72% and the small-cap Kosdaq added 0.35%. Hong Kong’s Hang Seng Index declined 0.56%, and mainland China’s CSI 300 slipped 0.36%. Meanwhile, Japan’s markets were closed due to a public holiday.

Singapore’s Straits Times Index fell 0.44% after reaching a record intraday high of 3,910.12 on Monday. India’s Nifty 50 dropped 0.32%, while the BSE Sensex hovered near the flatline. U.S. markets, however, saw gains, with major indices closing higher as tech stocks outperformed. The Dow Jones Industrial Average rose 167.01 points, or 0.38%, to close at 44,470.41, boosted by a 4.8% surge in McDonald’s shares. The S&P 500 climbed 0.67% to 6,066.44, while the Nasdaq Composite gained 0.98% to reach 19,714.27.

Investors are now focusing on Federal Reserve Chair Jerome Powell, who is set to testify before Congress later in the day. His remarks could provide insights into future monetary policy and economic outlook, influencing market sentiment further.

Upcoming Events: 

• 03:00 PM GMT – USD Fed Chair Powell Testifies

The post Tuesday 11th February 2025: Asia-Pacific Markets Mixed as Investors Weigh U.S. Tariffs and Fed Outlook first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 11 February 2025

What happened in the Asia session?

After declining in the final two months of 2024, the National Australia Bank (NAB) Business Confidence survey improved in January as it rose 4 points. However, with the prospect of further trade tariffs imposed by the U.S. on its major trading partners such as China – which is Australia’s largest trading partner – business sentiment could deteriorate in February. The Aussie was hovering around 0.6270 by midday in Asian hours.

What does it mean for the Europe & US sessions?

Bank of England (BoE) Governor Andrew Bailey will deliver a speech titled “Are we underestimating changes in financial markets?” at the University of Chicago Booth School of Business in London. Following last week’s reduction in the official bank rate, traders will be looking out for further insights from Governor Bailey with regards to the outlook on future monetary policy action.

Moving over to U.S. inventories, the API stockpiles have swelled over the last three weeks – a sign of weaker demand – as over 5M barrels of crude were added to inventories last week. Should the API stocks continue to build further, it is likely that oil prices will face strong headwinds late Tuesday.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Testimony (3:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chair Jerome Powell will begin his two-day testimony on Tuesday before the Senate Banking Committee in Washington D.C. where he will first deliver a prepared statement before facing a question-and-answer session. Powell’s responses on topics such as monetary policy, inflation and the labour market are likely to increase market volatility, especially if there are any surprises or shifts from him.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 29 January.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• December’s Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee will roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month and redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• In addition, the Committee will reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
• The next meeting runs from 18 to 19 March 2025.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

Fed Chair Powell Testimony (3:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Chair Jerome Powell will begin his two-day testimony on Tuesday before the Senate Banking Committee in Washington D.C. where he will first deliver a prepared statement before facing a question-and-answer session. Powell’s responses on topics such as monetary policy, inflation and the labour market are likely to increase market volatility, especially if there are any surprises or shifts from him. Gold continues to hit record highs, with spot prices surpassing $2,900/oz driven by safe-haven flows due to the newly imposed tariffs on steel and aluminium imports destined for the United States.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

NAB Business Confidence (12:30 am GMT)

What can we expect from AUD today?

After declining in the final two months of 2024, the National Australia Bank (NAB) Business Confidence survey improved in January as it rose 4 points. However, with the prospect of further trade tariffs imposed by the U.S. on its major trading partners such as China – which is Australia’s largest trading partner – business sentiment could deteriorate in February. The Aussie was hovering around 0.6270 in early trading on Tuesday.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• 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. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• 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 18 February 2025.

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

After gapping lower on Monday, the Kiwi rallied strongly before running out of steam around 0.5660 by the end of the U.S. session. Overhead pressures remain intact for this currency pair as it dipped under 0.5640 as Asian markets came online.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

National Foundation Day (Bank Holiday)

What can we expect from JPY today?

Japanese banks will be closed in observance of National Foundation Day so traders should expect lower liquidity and irregular volatility on Tuesday, especially during the Asian trading hours. Following four weeks of an appreciating yen, demand for this currency appeared to have waned on Monday pushing USD/JPY above the 152 mark. However, that move was short-lived as this currency pair dipped under this level at the beginning of Tuesday’s Asia session.

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 ECB President Christine Lagarde’s speech on Monday where she indicated confidence that inflation is set to return to their medium-term target of 2% in 2025 and the potential negative impact on the Eurozone economy due to trade tariffs, the Euro remained capped under 1.0350 overnight and the bearish sentiment should persist 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

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

With demand for the franc remaining weak, USD/CHF stayed elevated above 0.9100 on Monday. This currency pair is likely to grind higher on Tuesday as rising concerns on a global trade war could weaken the franc further, especially if high tariffs are imposed on the European Union.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

BoE Gov Bailey’s Speech (12:15 pm GMT)

What can we expect from GBP today?

Bank of England (BoE) Governor Andrew Bailey will deliver a speech titled “Are we underestimating changes in financial markets?” at the University of Chicago Booth School of Business in London. Following last week’s reduction in the official bank rate, traders will be looking out for further insights from Governor Bailey with regards to the outlook on future monetary policy action. Cable has declined over the past three consecutive trading days and it looks set to head further south on Tuesday.

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 Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Loonie experienced extreme volatility as tariffs were imposed on Canadian imports into the U.S. followed by a walk-back by President Donald Trump as he agreed to a 30-day suspension. USD/CAD has hovered around 1.4300 over the past few trading days as markets calmed down but traders should be prepared for new headlines that could spark further volatility for this currency pair.

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?

After declining for three successive weeks, crude oil prices stabilized on Monday before rebounding strongly despite rising concerns on global trade tariffs which could dampen global economic growth and energy demand – WTI oil rallied 2% overnight as it broke above the $72 mark. Moving over to U.S. inventories, the API stockpiles have swelled over the last three weeks – a sign of weaker demand – as over 5M barrels of crude were added to inventories last week. Should the API stocks continue to build further, it is likely that oil prices will face strong headwinds late Tuesday.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 11 February 2025 first appeared on IC Markets | Official Blog.