IC Markets Asia Fundamental Forecast | 18 February 2025

U.S. banks and financial markets were closed in observance of Presidents’ Day, also known as Washington’s Birthday. Both trading activity and volume tapered off drastically following the end of the European trading hours on Monday with the dollar index (DXY) making a low of 106.62. Demand for the greenback appeared to be returning on Tuesday as the DXY reversed off the overnight lows to rise steadily towards the 107 mark. Meanwhile, spot prices for gold hit a high of $2,906.44/oz on Monday before dipping under $2,900/oz at the beginning of Tuesday’s Asia session.

What does it mean for the Asia Session?

The RBA is widely expected to move ahead with its first interest rate cut, making a 25-basis point (bps) reduction in its Cash Rate as GDP output slowed while inflation inched closer to the midpoint target of 2.5% in recent months – this would bring rates down to 4.10%. RBA Governor Michele Bullock will then commence her press conference following the release of the monetary policy statement and if she projects a dovish outlook on future monetary policy action, the Aussie could face strong headwinds on Tuesday.

The Dollar Index (DXY)

Key news events today

Empire State Manufacturing Index (1:30 pm GMT)

What can we expect from DXY today?

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

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Empire State Manufacturing Index (1:30 pm GMT)

What can we expect from Gold today?

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

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

RBA Interest Rate Decision (3:30 am GMT)

RBA Press Conference (4:30 am GMT)

What can we expect from AUD today?

The RBA is widely expected to move ahead with its first interest rate cut, making a 25-basis point (bps) reduction in its Cash Rate as GDP output slowed while inflation inched closer to the midpoint target of 2.5% in recent months – this would bring rates down to 4.10%. RBA Governor Michele Bullock will then commence her press conference following the release of the monetary policy statement and if she projects a dovish outlook on future monetary policy action, the Aussie could face strong headwinds 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

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

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

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

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

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

ZEW Economic Sentiment (10:00 am GMT)

What can we expect from EUR today?

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

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

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

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

Labour Force Report (7:00 am GMT)

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

What can we expect from GBP today?

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

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 bps.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

CPI (1:30 pm GMT)

What can we expect from CAD today?

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

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

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

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 18 February 2025 first appeared on IC Markets | Official Blog.

Quiet Trading Day to Kick Off the Week

As expected, it was a quiet trading day to start the week yesterday, with very little on the macroeconomic front, a slow geopolitical day, and holidays in the U.S. and Canadian markets. European stocks, however, perked up nicely during the day, with the DAX notching a new record. The dollar had a quiet session, as did other major currencies, with the DXY remaining near annual low levels, although it did push slightly higher on the day, up 0.05% to 106.76.

Oil prices experienced some volatility after a drone strike in the Caspian Sea region, with Brent rising 0.74% to $75.29 and WTI up 0.92% to $71.39 per barrel. Gold also regained some of its Friday losses, climbing 0.54% on the day to $2,897.65 an ounce.

Reserve Bank of Australia to Cut Rates for the First Time in Five Years

The Reserve Bank of Australia is expected to cut rates today for the first time since the COVID pandemic, and traders across Australian markets anticipate significant volatility following the update. The market is pricing in a 90% chance of a 25-basis-point cut, with most traders expecting movements to be driven by any fresh updates regarding forward guidance.

The board remained resolutely hawkish throughout 2024, even as most other major central banks turned dovish and began their rate-cutting cycles. The key risk for markets today lies in how much the bank’s rhetoric shifts in its statements and in Governor Michele Bullock’s press conference later in the session. Most traders expect her to maintain a slightly hawkish tilt in her outlook.

Event Calendar Picks Up Today

The macroeconomic calendar picks up significantly today, with major events scheduled across all three trading sessions.

The Asian session is heavily focused on the Australian market—a theme that will continue throughout the week—with the Reserve Bank set to deliver its first rate cut in years.

At the European open, attention will shift to the UK market, with the latest employment data set to be released (Claimant Count expected at +10k). Later in the session, Bank of England Governor Andrew Bailey is scheduled to speak. Additionally, the German ZEW Economic Sentiment Index is set for release today.

At the New York open, U.S. and Canadian traders will return after a long weekend, but initial focus will be on Canada, with key CPI data expected. The U.S. Empire State Manufacturing Index is also due at the same time, but for a change, expect the Canadian data to dominate market focus.

The post General Market Analysis – 18/02/25 first appeared on IC Markets | Official Blog.

Aussie dollar traders are eagerly anticipating the first rate cut from the Reserve Bank of Australia since the COVID pandemic today and expect plenty of volatility in the currency around the event. The market is pricing in a 90% chance of a 25-basis point rate cut today, which would bring the cash rate down from 4.35% to 4.10%. Any update other than this will likely lead to huge moves in the Aussie. Ironically, the currency has been gaining ground against the US dollar and on the crosses over the last few weeks, despite the increased chances of a rate cut being priced in. However, this has been more due to global updates rather than domestic factors.

The Aussie is sitting very close to annual highs this morning ahead of the rate decision. Barring any surprise away from the expected 25-point cut, traders are expecting the guidance from the statement and the later press conference to move the currency. More dovish comments should see it return to recent ranges, with short-term support on the hourly chart now sitting on the 200-day moving average just under 63 cents. Conversely, anything less dovish—or even with an underlying hawkish tone, which had been the outlook up until the end of last year—could see the pair break through those recent highs and push into fresh topside territory.

Resistance 2: 0.6687 – November 2024 High
Resistance 1: 0.6374 – 2025 High and Trendline Resistance

Support 1: 0.6296 – 200-Day Moving Average
Support 2: 0.6085 – 2025 Low and Trendline Support

The post Trade the Aussie Dollar on the Reserve Bank of Australia Rate Decision first appeared on IC Markets | Official Blog.

The post Ex-Dividend 18/2/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.15%, Shanghai Composite up 0.15%, Hang Seng up 0.13% ASX down 0.37%
• Commodities : Gold at $2909.35 (0.33%), Silver at $33.75 (0.38%), Brent Oil at $74.9 (0.12%), WTI Oil at $70.7 (0.03%)
• Rates : US 10-year yield at 4.491, UK 10-year yield at 4.4990, Germany 10-year yield at 2.423

News & Data:

• (USD) Core Retail Sales m/m  -0.4% to 0.3% expected
• (USD) Retail Sales m/m  -0.9% to 0.2% expected

Markets Update:

Asia-Pacific markets traded mostly higher on Monday as investors analyzed Japan’s fourth-quarter economic growth data and awaited key central bank decisions in the region. Japan’s Nikkei 225 remained flat, while the Topix gained 0.29%. South Korea’s Kospi added 0.18%, and the small-cap Kosdaq jumped 1.2%. Preliminary government data showed Japan’s GDP grew 2.8% on an annualized basis, surpassing the expected 1%. The Japanese yen strengthened to 151.95 against the U.S. dollar.

Australia’s S&P/ASX 200 fell 0.64%. Tencent shares surged 4.25% to their highest level since July 2021 after its Weixin messaging app began beta testing Deepseek integration. Hong Kong’s Hang Seng index rose 0.23%, while the Hang Seng Tech Index dipped 0.11%. Mainland China’s CSI 300 traded flat. In Thailand, fourth-quarter GDP grew 3.2% year-on-year, missing forecasts of 3.9%, while annual growth stood at 2.5%.

The Reserve Bank of Australia kicked off a two-day meeting that may lead to an interest rate cut on Tuesday. Central banks in Indonesia and New Zealand are also set to announce their rate decisions on Wednesday. Investors are closely watching these developments amid ongoing global economic uncertainties.

In the U.S., markets closed mixed on Friday. The Dow Jones Industrial Average dropped 165.35 points (0.37%) to 44,546.08, while the S&P 500 slipped 0.01% to 6,114.63. The Nasdaq Composite gained 0.41% to 20,026.77. Despite weak retail sales data, all three major indexes posted weekly gains, driven by easing concerns over U.S. tariff policies and better-than-expected inflation data.

Upcoming Events: 

• 01:15 PM GMT – CAD Housing Starts

The post Monday 17th February 2025: Asia-Pacific Markets Rise as Investors Await Central Bank Decisions first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 17 February 2025

What happened in the Asia session?

Japan’s industrial activity has been mixed throughout 2024 with production growing just 0.3% MoM in January based on preliminary estimates, after declining 2.2% in the previous month. However, the final result showed production unexpectedly declining 0.2% which continues to highlight the weakness in the manufacturing sector. USD/JPY broke under 152 by midday in Asia and the downward trend could gain further traction as the day progresses.

What does it mean for the Europe & US sessions?

The Eurozone posted a trade surplus of €16.4B in November 2024 beating market expectations of €8.5B. Meanwhile, the Euro has been buoyed by hopes of a potential ceasefire between Russia and Ukraine and if the trade surplus continues to increase, this currency pair could receive another timely boost.

Some Canadian banks will be closed in observance of Family Day but most provinces do not observe this holiday so many will remain open. However, traders should still be prepared for slightly lower liquidity and some irregular volatility for the Loonie during the U.S. session.

The Dollar Index (DXY)

Key news events today

Presidents’ Day (Bank Holiday)

What can we expect from DXY today?

U.S. banks and financial markets will be closed in observance of Presidents’ Day, also known as Washington’s Birthday. Both trading activity and volume are anticipated to taper off drastically following the end of the European trading hours later today. With demand for the greenback waning over the last couple of weeks, the DXY has lost nearly 1.7% in February and this index will likely remain under pressure as the new trading week kicked off on Monday.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Presidents’ Day (Bank Holiday)

What can we expect from Gold today?

U.S. banks and financial markets will be closed in observance of Presidents’ Day, also known as Washington’s Birthday. Both trading activity and volume are anticipated to taper off drastically following the end of the European trading hours later today. Gold has risen strongly over the past seven weeks gaining 10% as spot prices made a record high of $2,942.71/oz last Tuesday. Demand for this precious metal remains robust and the upward momentum will likely strengthen even more as the new trading week gets under way.

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?

The Aussie has appreciated strongly over the past couple of weeks as it rose over 3% to close at 0.6353 last Friday. With the RBA monetary announcement looming this Tuesday, traders will be looking to see how ‘dovish’ this central bank will project itself through the statement and during Governor Michele Bullock’s press conference. This currency pair was climbing steadily towards 0.6400 as markets reopened on Monday.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Like its Pacific neighbour, the Kiwi rebounded strongly in February to gain 2.8%, closing at 0.5727 last Friday. With the RBNZ also dropping its monetary announcement this Wednesday followed by Governor Adrian Orr’s press conference, traders will be looking to see if this central bank continues to deliver its ‘dovish’ rhetoric. This currency pair was rising firmly towards 0.5750 as markets reopened on Monday.

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 Bullish

The Japanese Yen (JPY)

Key news events today

Industrial Production (4:30 am GMT)

What can we expect from JPY today?

Japan’s industrial activity has been mixed throughout 2024 with production growing just 0.3% MoM in January based on preliminary estimates, after declining 2.2% in the previous month. However, the final result showed production unexpectedly declining 0.2% which continues to highlight the weakness in the manufacturing sector. USD/JPY broke under 152 by midday in Asia and the downward trend could gain further traction as the day progresses.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

Trade Balance (10:00 am GMT)

What can we expect from EUR today?

The Eurozone posted a trade surplus of €16.4B in November 2024 beating market expectations of €8.5B. Meanwhile, the Euro has been buoyed by hopes of a potential ceasefire between Russia and Ukraine and if the trade surplus continues to increase, this currency pair could receive another timely boost.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Hopes of a potential ceasefire between Russia and Ukraine have lifted many European currencies including the franc as it appreciated over 1.5% over the last couple of weeks. USD/CHF tumbled under the threshold of 0.9000 last Friday and it could continue to slide lower 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

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Coupled with stronger-than-expected GDP and growing hopes of a potential ceasefire between Russia and Ukraine, the Pound received a boost last week as it breached above 1.2600. Strong tailwinds will likely keep this currency pair elevated this week with Cable looking to push towards 1.2700.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 bps.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

Family Day (Bank Holiday)

What can we expect from CAD today?

Some Canadian banks will be closed in observance of Family Day but most provinces do not observe this holiday so many will remain open. However, traders should still be prepared for slightly lower liquidity and some irregular volatility for the Loonie during the U.S. session. USD/CAD declined for the second consecutive week last Friday, falling nearly 4% over this period.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following larger-than-expected increases in both the API stockpiles and the EIA inventories over the past three to four weeks, U.S. demand for crude oil grew weaker. Combined with a potential ceasefire between Russia and Ukraine brokered by the U.S., oil prices declined for the fourth successive week as WTI oil closed at $70.52 per barrel last Friday. This benchmark has shed almost 9% over this period, marking its longest losing streak since the end of October through early December. As markets reopened on Monday, overhead pressures for crude oil remain firmly intact.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 17 February 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 107.51

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

1st support: 105.46
Supporting reasons: Identified as an overlap support that aligns close to the 100% Fibonacci projection, indicating a potential level where price could find support once more.

1st resistance: 109.67
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/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: 1.0611

Supporting reasons: Identified as an overlap resistance that aligns with the 127.2% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 1.0403

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

1st resistance: 1.0784
Supporting reasons:  Identified as a pullback resistance, indicating a potential area that could halt any further upward movement. 

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 159.76

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

1st support: 155.97

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

1st resistance: 163.78
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 0.8359

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

1st support: 0.8265

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

1st resistance: 0.8448
Supporting reasons: Identified as a multi-swing high resistance that aligns close to the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.2508

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

1st support: 1.2358

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

1st resistance: 1.2815
Supporting reasons: Identified as an overlap resistance that aligns close to the 50% Fibonacci retracement and the 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 193.03

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

1st support: 187.12
Supporting reasons: Identified as a swing low support that aligns with the 78.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 196.06
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 0.8916

Supporting reasons: Identified as an overlap support that aligns close to the 38.2% Fibonacci retracement and the 161.8% Fibonacci extension, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 0.8752
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 0.9206
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 149.37

Supporting reasons: Identified as an overlap support that aligns with the 50% Fibonacci retracement and the 61.8% Fibonacci projection, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 146.93
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once more.

1st resistance: 154.45
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: Bearish

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

Pivot: 1.4105
Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a minor rebound.

1st support: 1.3936
Supporting reasons: Identified as an overlap support that aligns with a 61.8% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.4356
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.6349

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

1st support: 0.6231

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

1st resistance: 0.6454
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.5709

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

1st support: 0.5580

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

1st resistance: 0.5798

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

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 43,269.50

Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 41,604.84

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

1st resistance: 45,042.77

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

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 22,809.76

Supporting reasons: Identified as a resistance that aligns with a 78.6% Fibonacci projection, indicating a potential level where selling pressures could intensify.

1st support: 21,923.50

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

1st resistance: 23,288.80
Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 6,190.97

Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential level where selling pressures could intensify.

1st support: 6,113.40

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

1st resistance: 6,304.24

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

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 91,855.25

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

1st support: 87,933.89
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 101,637.89
Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 2,347.98

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: 2,085.55
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 2,920.51
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 71.56

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

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

1st resistance: 74.04
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 2790.01

Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement and the 100% Fibonacci projection, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 2721.96

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

1st resistance: 2929.89

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

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The post Monday 17th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 17 February 2025

What happened in the U.S. session?

Following four straight months of robust growth, consumer spending in the U.S. posted its first decline in five months as sales tumbled 0.9% MoM in January, significantly higher than the forecast of a 0.2%-drop. January’s figures also marked the biggest decline since March 2023 as severe weather and the Los Angeles fires weighed heavily on consumer spending. The dollar index (DXY) fell for the second week in a row as it hit a low of 106.56 on Friday before closing at 106.79. This index remains under intense overhead pressures and was sliding towards 106.50 as markets reopened on Monday.

What does it mean for the Asia Session?

Japan’s industrial activity has been mixed throughout 2024 with production growing just 0.3% MoM based on preliminary estimates, after declining 2.2% in the previous month. The final result is expected to show an unchanged figure and continued weakness in the manufacturing sector could weaken the yen. USD/JPY was floating around 152 as markets reopened on Monday.

The Dollar Index (DXY)

Key news events today

Presidents’ Day (Bank Holiday)

What can we expect from DXY today?

U.S. banks and financial markets will be closed in observance of Presidents’ Day, also known as Washington’s Birthday. Both trading activity and volume are anticipated to taper off drastically following the end of the European trading hours later today. With demand for the greenback waning over the last couple of weeks, the DXY has lost nearly 1.7% in February and this index will likely remain under pressure as the new trading week kicked off on Monday.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Presidents’ Day (Bank Holiday)

What can we expect from Gold today?

U.S. banks and financial markets will be closed in observance of Presidents’ Day, also known as Washington’s Birthday. Both trading activity and volume are anticipated to taper off drastically following the end of the European trading hours later today. Gold has risen strongly over the past seven weeks gaining 10% as spot prices made a record high of $2,942.71/oz last Tuesday. Demand for this precious metal remains robust and the upward momentum will likely strengthen even more as the new trading week gets under way.

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?

The Aussie has appreciated strongly over the past couple of weeks as it rose over 3% to close at 0.6353 last Friday. With the RBA monetary announcement looming this Tuesday, traders will be looking to see how ‘dovish’ this central bank will project itself through the statement and during Governor Michele Bullock’s press conference. This currency pair was climbing steadily towards 0.6400 as markets reopened on Monday.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Like its Pacific neighbour, the Kiwi rebounded strongly in February to gain 2.8%, closing at 0.5727 last Friday. With the RBNZ also dropping its monetary announcement this Wednesday followed by Governor Adrian Orr’s press conference, traders will be looking to see if this central bank continues to deliver its ‘dovish’ rhetoric. This currency pair was rising firmly towards 0.5750 as markets reopened on Monday.

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 Bullish

The Japanese Yen (JPY)

Key news events today

Industrial Production (4:30 am GMT)

What can we expect from JPY today?

Japan’s industrial activity has been mixed throughout 2024 with production growing just 0.3% MoM based on preliminary estimates, after declining 2.2% in the previous month. The final result is expected to show an unchanged figure and continued weakness in the manufacturing sector could weaken the yen. USD/JPY was floating around 152 as markets reopened on Monday.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

Trade Balance (10:00 am GMT)

What can we expect from EUR today?

The Eurozone posted a trade surplus of €16.4B in November 2024 beating market expectations of €8.5B. Meanwhile, the Euro has been buoyed by hopes of a potential ceasefire between Russia and Ukraine and if the trade surplus continues to increase, this currency pair could receive another timely boost.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Hopes of a potential ceasefire between Russia and Ukraine have lifted many European currencies including the franc as it appreciated over 1.5% over the last couple of weeks. USD/CHF tumbled under the threshold of 0.9000 last Friday and it could continue to slide lower 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

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Coupled with stronger-than-expected GDP and growing hopes of a potential ceasefire between Russia and Ukraine, the Pound received a boost last week as it breached above 1.2600. Strong tailwinds will likely keep this currency pair elevated this week with Cable looking to push towards 1.2700.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 bps.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

Family Day (Bank Holiday)

What can we expect from CAD today?

Some Canadian banks will be closed in observance of Family Day but most provinces do not observe this holiday so many will remain open. However, traders should still be prepared for slightly lower liquidity and some irregular volatility for the Loonie during the U.S. session. USD/CAD declined for the second consecutive week last Friday, falling nearly 4% over this period.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following larger-than-expected increases in both the API stockpiles and the EIA inventories over the past three to four weeks, U.S. demand for crude oil grew weaker. Combined with a potential ceasefire between Russia and Ukraine brokered by the U.S., oil prices declined for the fourth successive week as WTI oil closed at $70.52 per barrel last Friday. This benchmark has shed almost 9% over this period, marking its longest losing streak since the end of October through early December. As markets reopened on Monday, overhead pressures for crude oil remain firmly intact.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Asia Fundamental Forecast | 17 February 2025 first appeared on IC Markets | Official Blog.

US Markets Mixed After Retail Sales Drop – Dow Down 0.6%

US stocks had a mixed day on Friday after retail sales figures recorded their biggest decline since March 2023, as consumer concerns over tariffs and higher prices weighed heavily on Main Street. The Dow took a hit, dropping 0.57% on the day, while the S&P 500 closed almost flat, down just 0.01%. The Nasdaq, however, gained 0.41%, securing its largest weekly increase since early December.

The dollar continued its recent decline following the data, with the DXY falling 0.52% to close at 106.71. US Treasury yields also dropped, with the 2-year yield down 3.7 basis points to 4.270% and the 10-year yield down 5.3 basis points to 4.476%.

Oil prices declined further on optimism surrounding a potential peace deal in Ukraine, with Brent crude down 0.37% to $74.74 and WTI falling 0.77% to $70.74 per barrel. Meanwhile, gold saw significant movement, but this time it pulled back from recent record highs as profit-taking flows hit the market, closing the day down 1.56% at $2,881.60.

Dollar Under Pressure as Fed Rate Cut Expectations Increase

A combination of weaker economic data, tariff reprieves, and increasing expectations of a Federal Reserve rate cut has led to a sharp decline in the dollar over the past week. The greenback is now more than 3% below its annual high, hitting its lowest level of 2025 in trading on Friday.

On the data front, Friday’s retail sales figures recorded their weakest print since March 2023, alongside weaker PPI components that contribute to the Federal Reserve’s preferred PCE inflation metric. These factors have put pressure on the dollar and led markets to shift expectations for a potential Fed rate cut forward—from September to June, with nearly a 50/50 chance of a 25-basis-point cut now priced in.

Geopolitics have also played a role, with President Trump and the new US administration easing the urgency around tariff implementation. Traders are now waiting to see whether tariffs will indeed be enforced in the coming months—an outcome likely to drive dollar appreciation—or if further delays will trigger additional downside for the currency.

Slow Start to a Big Trading Week

The trading week is set to begin slowly today, with little on the macroeconomic calendar to provide fresh market direction. Public holidays in both the US and Canada later in the day could further dampen volatility.

US markets ended Friday on a mixed note, and Asian markets are expected to open on the back foot today. Traders will closely monitor newswires for any geopolitical updates, particularly concerning US tariffs, which could further impact market sentiment.

Range-bound trading conditions are expected throughout the day, although some products are currently at sensitive price levels. With liquidity likely to thin later in the session, any unexpected developments could lead to sharp and rapid market movements.

The post General Market Analysis – 17/02/25 first appeared on IC Markets | Official Blog.

It looks set to be another lively trading week ahead for investors, with the emphasis shifting away from the United States—as much as that is possible. Of course, traders will continue to monitor newswires closely for any geopolitical updates, as always.

There is little economic data scheduled from the world’s largest economy, and aside from the Federal Reserve Meeting Minutes, not much is planned from the central bank. As a result, traders will focus on other jurisdictions, with FX players seeking opportunities beyond the US dollar as the week progresses.

Commodity currencies could experience significant movements, with interest rate updates due from both Antipodean central banks and key data releases from Canada.

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

It should be a relatively quiet start to the trading week, with little of note on the calendar and key market holidays in both the US and Canada during the final session of the day.

The event calendar picks up significantly from Tuesday, with key events scheduled across all sessions. In the Asian session, the focus will be firmly on Australian markets, with the Reserve Bank of Australia’s interest rate decision due. The London session will see the release of the UK’s key employment data, alongside a speech from the Bank of England’s Andrew Bailey. In North America, Canadian CPI numbers will be released in the first active session of the week.

The Antipodean region remains in focus on Wednesday, with Australian wage price data due shortly before the Reserve Bank of New Zealand announces its latest rate decision. The UK will again be in the spotlight during the European session, with CPI and PPI data set for release. In the US, the economic calendar remains light until the Federal Reserve’s Meeting Minutes are published close to the final bell.

Australian markets take centre stage once again, with employment data released early in the Asian session. However, attention will soon shift north for China’s Loan Prime Rate updates. The European session is relatively quiet, but key US data is scheduled once New York opens, including the usual weekly unemployment claims, the Philly Fed Manufacturing Index, and the weekly crude oil inventory report.

The week concludes with a full calendar on Friday. The Asian session includes yet another update for Australian markets, with a speech from RBA Governor Michele Bullock. Flash Manufacturing and Services PMI numbers will be released across several key markets, including the UK, the EU, Germany, France, and the US. In the final session of the day, Canadian retail sales figures will be published, alongside US existing home sales data and the revised University of Michigan Consumer Sentiment and Inflation Expectations report.

The post The Week Ahead – Week Commencing 17 February 2025 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 17/2/2025 first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 14 February 2025

What happened in the Asia session?

With no major news events, it was a fairly quiet session as the dollar index (DXY) floated above 107 while spot prices for gold continued to grind higher towards its record high of $2,942.71/oz. Trading activity should pick up noticeably as the European markets come online and especially when the U.S. macroeconomic data drops before the start of the U.S. trading hours.

What does it mean for the Europe & US sessions?

The Eurozone economy unexpectedly stalled in Q4 2024, marking its weakest performance of the year according to preliminary estimates as the two largest economies saw surprising contractions, with Germany’s GDP shrinking by 0.2% and France’s declining by 0.1%. The flash reading is expected to show an unchanged figure from the preliminary estimates but that is unlikely to hold back the recent gains in the Euro, which has been mainly attributed to significant weakness in the U.S. dollar.

The Dollar Index (DXY)

Key news events today

Retail Sales (1:30 pm GMT)

Industrial Production (2:15 pm GMT)

What can we expect from DXY today?

Consumer spending in the U.S. has been robust since September but sales are now expected to register its first decline in five months. Retail sales are anticipated to fall 0.2% MoM, suggesting a ‘spending hangover’ by the American consumer following an intense shopping period ranging from Black Friday and Thanksgiving sales to the traditional Christmas shopping season. Moving over to the manufacturing sector, industrial production had picked up in the final two months of last year as activity rose strongly in December, growing 0.9% MoM to mark the highest gains since February 2024. However, market consensus points to a slightly ‘softer’ pace of growth for this sector. Should both retail sales and industrial production deteriorate more than forecasts, the dollar will likely face further intense headwinds.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Retail Sales (1:30 pm GMT)

Industrial Production (2:15 pm GMT)

What can we expect from Gold today?

Consumer spending in the U.S. has been robust since September but sales are now expected to register its first decline in five months. Retail sales are anticipated to fall 0.2% MoM, suggesting a ‘spending hangover’ by the American consumer following an intense shopping period ranging from Black Friday and Thanksgiving sales to the traditional Christmas shopping season. Moving over to the manufacturing sector, industrial production had picked up in the final two months of last year as activity rose strongly in December, growing 0.9% MoM to mark the highest gains since February 2024. However, market consensus points to a slightly ‘softer’ pace of growth for this sector. Should both retail sales and industrial production deteriorate more than forecasts, the dollar will likely face further intense headwinds – an outcome that would keep gold prices elevated.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie hit an overnight high of 0.6223 as demand for the greenback dropped drastically. This currency pair looks all set to notch its second successive week of higher gains as the backdrop of global trade tariffs dominate the headlines and place downward pressure on the greenback.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Thursday’s softer inflation expectations did not weigh on the Kiwi as it reached a peak of 0.5679 on Thursday. Just like its Pacific neighbour, this currency pair is on course to register its second consecutive week of appreciation.

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 Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Significant dollar weakness caused USD/JPY to dive over 1.1% on Thursday as it tumbled under the 153 level. Overhead pressures for this currency pair remain firmly in place as it slid toward 152.50 as Asian markets came online.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

GDP (10:00 am GMT)

What can we expect from EUR today?

The Eurozone economy unexpectedly stalled in Q4 2024, marking its weakest performance of the year according to preliminary estimates as the two largest economies saw surprising contractions, with Germany’s GDP shrinking by 0.2% and France’s declining by 0.1%. The flash reading is expected to show an unchanged figure from the preliminary estimates but that is unlikely to hold back the recent gains in the Euro, which has been mainly attributed to significant weakness in the U.S. dollar.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Inflationary pressures continue to dissipate significantly in Switzerland as seen on Thursday but instead of lifting USD/CHF, this currency pair fell nearly 1%. Dollar weakness has been the main theme this week and it has caused USD/CHF spiralling towards 0.9000 and a break under this threshold on Friday should come as no surprise.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

After growing just 0.1% in the previous month, the British economy expanded 0.4% MoM in December. This latest jump in economic activity easily surpassed the 0.1%-forecast to mark the biggest growth in nine months as the expansion was largely driven by the services sector, particularly segments such as professional, scientific and technical activities; advertising and market research industry; administrative and support service activities; and travel agency, tour operator and other reservation service and related activities. This latest result sparked a strong rally in the Cable as it surged beyond 1.2500 to hit an overnight high of 1.2562 – this currency pair is likely to remain buoyed on the final trading day of the week.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 bps.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Intense sell-off in the greenback finally drove USD/CAD under the key support at 1.4300 – this level had provided a strong floor since the beginning of January. Overhead pressures continue to build for this currency pair as it tumbled under 1.4200 at the beginning of the Asia session.

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following larger-than-expected increases in both the API stockpiles and the EIA inventories over the past three to four weeks, U.S. demand for crude oil grows weaker. Combined with a potential ceasefire between Russia and Ukraine brokered by the U.S., crude oil initially tumbled over 1.5% on Thursday with WTI oil making a low at $70.22 per barrel. However, prices pared the early losses as U.S. tariff announcements were delayed until at least April, fuelling hope that a global trade war could be avoided – a result that would provide relief for any downward pressures on economies and energy demand. Prices for WTI climbed above $71.50 at the beginning of the Asia session, paving the way for this benchmark to mark its first close in the green in four weeks.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 14 February 2025 first appeared on IC Markets | Official Blog.