Global Markets:

•  Asian Stock Markets : Nikkei down 0.54%, Shanghai Composite down 0.06%, Hang Seng up 0.14% ASX up 0.57%
• Commodities : Gold at $2795.35 (0.03%), Silver at $30.85 (-0.18%), Brent Oil at $76.29 (-0.29%), WTI Oil at $73.64 (-0.23%)
• Rates : US 10-year yield at 4.523, UK 10-year yield at 4.611, Germany 10-year yield at 2.560

News & Data:

• (USD) CB Consumer Confidence  104.1 vs 105.7 expected
• (USD) Richmond Manufacturing Index  -4 vs -13 expected

Markets Update:

Japan and Australian stocks rose Wednesday as Wall Street rebounded overnight, while several Asia-Pacific markets remained closed for the Lunar New Year holiday. Japan’s Nikkei 225 gained 0.84%, and the Topix rose 0.74%, recovering from the previous session’s losses. Minutes from the Bank of Japan’s December meeting revealed discussions on neutral interest rates and monetary policy, as inflation remains above the 2% target and wage hikes continue due to labor shortages. Last week, the BOJ raised interest rates by 25 basis points to 0.5%, the highest level since 2008.

Australia’s S&P/ASX 200 climbed 0.72%, reversing earlier losses. The Australian Bureau of Statistics reported that inflation rose 0.2% in the December quarter and 2.4% annually, slightly below economists’ expectations of 2.5%. Lower-than-expected inflation could ease concerns over aggressive monetary tightening in the country.

On Wall Street, major indexes rebounded after a sharp sell-off triggered by concerns over competition from Chinese AI startup DeepSeek. The S&P 500 gained 0.92% to 6,067.70, driven by a strong performance in the technology sector. The Nasdaq Composite surged 2.03% to 19,733.59, while the Dow Jones Industrial Average added 136.77 points (0.31%) to close at 44,850.35.

Nvidia rebounded nearly 9% after a historic 17% drop in the previous session, which erased nearly $600 billion in market value. Other major tech companies also posted gains, with Broadcom rising 2.6% and Oracle climbing 3.6%, as investors sought opportunities following Monday’s steep losses.

Upcoming Events: 

• 02:45 PM GMT – CAD Overnight Rate
• 07:00 PM GMT – USD Federal Funds Rate

The post Wednesday 29th January 2025: Asian Stocks Rise as Wall Street Rebounds first appeared on IC Markets | Official Blog.

Dear Traders,

At IC Markets Global, we continuously review our offerings to ensure they align with our strategic objectives while meeting the evolving needs of our clients. As part of this commitment, we are making an important update to the rebate structure for the Raw Trader Plus program.

What’s Changing?

Effective 1st February 2025, Indices and Commodities will no longer be included in our rebate program. This adjustment follows a comprehensive review aimed at maintaining a fair and transparent trading environment.

For further details, please refer to our updated Terms & Conditions.

If you have any questions or need further clarification regarding this update, please don’t hesitate to reach out. Our team is here to assist you with any concerns or inquiries you may have.

Thank you for your continued support.

Kind regards, 

IC Markets Global. 

The post Important Update: Changes to Our Rebate Program first appeared on IC Markets | Official Blog.

US Tech Stocks Rebound – Nasdaq Up 2%

US tech stocks rebounded in trading yesterday as investors prepared for key earnings reports and the latest rate decision from the Federal Reserve Bank. Market heavyweight Nvidia surged 8% after a sharp 17% decline the previous day, helping to lift the Nasdaq by 2%. The S&P 500 gained 0.92%, while the Dow Jones Industrial Average rose 0.31%.

US Treasury yields were steady ahead of the Fed’s rate decision, with the 2-year yield down 0.4 basis points to 4.195% and the 10-year yield slipping 0.2 basis points to 4.532%. The US dollar appreciated against all major currencies, as concerns over tariffs resurfaced, pushing the DXY index up 0.52% on the day.

Oil prices also gained ground, with Brent crude rising 0.65% to $77.58 and WTI climbing 1.05% to $73.94. Meanwhile, gold edged closer to all-time highs as uncertainty continued to weigh on investor sentiment, rising 0.76% to $2,762.19.

Fed in Focus Today

Today is a significant day for North American markets, with rate announcements expected from both the Bank of Canada and the Federal Reserve. However, markets are likely to focus more on the Federal Reserve’s update later in the day than on the Bank of Canada’s decision, which will be announced closer to the New York session open.

The Federal Open Market Committee (FOMC) is widely expected to hold rates steady today. However, the accompanying statement and subsequent press conference have the potential to move markets significantly. Federal Reserve Chair Jerome Powell is expected to carefully balance two key messages: acknowledging positive progress in economic data, particularly inflation, while addressing the potential economic implications of the new government’s policies. How Powell navigates these competing factors could lead to sharp reactions across financial markets.

Data and Central Banks Ahead

It looks set to be a busy day for traders, with key data releases and a “double play” of central bank rate decisions during the North American session.

The day kicks off with important data from Australia, which could influence the Reserve Bank of Australia’s next moves. The Consumer Price Index (CPI) data is expected to show a 0.3% quarterly increase, with the annual headline figure projected at 2.5%. Meanwhile, the closely watched Trimmed Mean CPI is anticipated to rise by 0.6% quarter-on-quarter.

The European session is relatively quiet on the data front, but activity is expected to pick up significantly once the New York session begins. The Bank of Canada is forecast to cut rates by 25 basis points earlier in the session. Later in the day, attention will turn to the Federal Reserve’s major rate announcement. While no change in the federal funds rate is expected, the accompanying statement and press conference are likely to provide traders with substantial opportunities.

The post General Market Analysis – 29/01/25 first appeared on IC Markets | Official Blog.

Australian dollar traders are anticipating significant movement in the currency today as the Australian Bureau of Statistics releases the latest Consumer Price Index (CPI) data. The market expects the quarterly data to show a 0.3% increase, with the headline year-on-year figure projected at a still “sticky” 2.5%. Meanwhile, the closely watched Trimmed Mean quarterly figure is forecast to rise by 0.6% quarter-on-quarter.

The Aussie has experienced volatile trading sessions against the USD recently. It peaked near 0.6330 late last week but has since retreated to the middle of its recent range. A weaker CPI print today could significantly raise the likelihood of an RBA rate cut in the coming months, likely triggering increased Aussie selling. Long-term support currently sits near the annual low of 0.6129. Conversely, a stronger CPI result would increase pressure on the central bank to maintain higher interest rates, likely pushing the currency higher against the USD and other crosses.

Key Levels to Watch

• Resistance 2: 0.6331 – 2025 High
• Resistance 1: 0.6310 – Trendline Resistance
• Support 1: 0.6238 – Overnight Low
• Support 2: 0.6129 – 2025 Low and Trendline Support

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

The post Ex-Dividend 29/1/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 1.65%, Shanghai Composite down 0.06%, Hang Seng up 0.34% ASX down 0.12%
• Commodities : Gold at $2774.35 (0.26%), Silver at $30.65 (0.38%), Brent Oil at $76.59 (0.49%), WTI Oil at $73.54 (0.43%)
• Rates : US 10-year yield at 4.553, UK 10-year yield at 4.585, Germany 10-year yield at 2.5030

News & Data:

• (USD) New Home Sales  698K vs 669K expected

Markets Update:

Hong Kong stocks rose Tuesday, with the Hang Seng Index gaining 0.14%, following a sharp tech sell-off on Wall Street. Several Asia-Pacific markets, including China, Taiwan, and South Korea, remained closed for the Lunar New Year holiday.

Japan’s Nikkei 225 fell 1.34%, while the Topix traded flat. Japanese chip stocks continued to decline amid concerns over Chinese AI startup DeepSeek challenging U.S. dominance in artificial intelligence. Advantest dropped 11%, Tokyo Electron lost 4.88%, and Renesas Electronics fell 3.07%. Meanwhile, India’s Nifty 50 and BSE Sensex opened higher, gaining 0.36% and 0.54%, respectively, as the Reserve Bank of India announced over $17 billion in liquidity measures, including bond purchases and currency swaps.

Australia’s S&P/ASX 200 declined 0.12% to 8,399.1, as losses in gold miners, energy, and tech stocks offset gains in iron ore miners and financials. In the U.S., the Nasdaq Composite tumbled 3.07% to 19,341.83, and the S&P 500 fell 1.46% to 6,012.28, amid fears of an AI stock bubble bursting due to DeepSeek’s competitive AI model. However, the Dow Jones gained 289.33 points (0.65%) to 44,713.58, supported by Apple, Johnson & Johnson, and Travelers.

Nvidia suffered a historic loss, shedding nearly $600 billion in market cap on Monday—the largest single-day decline for any U.S. company.

Upcoming Events: 

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

The post Tuesday 28th January 2025: Global Markets React to Tech Sell-Off and AI Disruptions first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 28 January 2025

What happened in the Asia session?

After moderating significantly lower for most of last year, core inflation as reported by the Bank of Japan (BoJ) accelerated for the second consecutive month, rising from 1.5% in October to 1.9% YoY in December. This latest result also marked the second successive month where inflation exceeded its forecast, signalling a return of inflationary pressures in the land of the rising sun. The yen could see further appreciation in the coming months should inflation expectations continue to rise higher.

What does it mean for the Europe & US sessions?

Crude oil prices fell on Monday as news of surging interest in Chinese start-up DeepSeek’s low-cost artificial intelligence (AI) model raised concerns over this sector’s perceived lower energy consumption by power data centres. WTI oil fell over 1.5%, tumbling as low as $72.38 before stabilizing around $73 per barrel. Moving over to U.S. inventories, the API stockpiles bucked a five-week streak of falling inventories as 1M barrels of crude were added to storage last week. Should inventories continue to build for the second consecutive week, it could add further woes to oil prices late Tuesday.

The Dollar Index (DXY)

Key news events today

Durable Goods Orders (1:30 pm GMT)

Consumer Confidence (3:00 pm GMT)

What can we expect from DXY today?

New orders for durable goods have been weak from August through November but the forecast for December suggests an uptick in manufactured goods. Meanwhile, the Conference Board Consumer Confidence survey pulled back in December as concerns about the future outlook returned, particularly for future business conditions and incomes. However, January’s estimate of 105.7 points to a slight improvement in consumer sentiment and if combined with higher-than-anticipated orders, demand for the dollar could rekindle later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted by a majority to lower the Federal Funds Rate target range by 25 basis points to 4.25 to 4.50% on 18 December. Voting against the action was Beth M. Hammack, who preferred to maintain the target range at 4.5 to 4.75%.
• 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 labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• The 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 considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• 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.
• In addition, the Committee will continue reducing its holdings of Treasury securities, and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 28 to 29 January 2025.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

Durable Goods Orders (1:30 pm GMT)

Consumer Confidence (3:00 pm GMT)

What can we expect from Gold today?

New orders for durable goods have been weak from August through November but the forecast for December suggests an uptick in manufactured goods. Meanwhile, the Conference Board Consumer Confidence survey pulled back in December as concerns about the future outlook returned, particularly for future business conditions and incomes. However, January’s estimate of 105.7 points to a slight improvement in consumer sentiment and if combined with higher-than-anticipated orders, demand for the dollar could rekindle later today – a result that could weigh on gold prices.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

With demand for the greenback picking up in early Tuesday trading, the Aussie fell under 0.6300. This currency pair tumbled towards 0.6450 as Asian markets came online and should overhead pressures increase further, the downfall could extend 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 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 reversed off Monday’s high at 0.5723 to fall under 0.5700. With demand for the greenback rekindling on Tuesday, this currency pair slid lower towards 0.5650 at the beginning of the Asia session.

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 Bullish

The Japanese Yen (JPY)

Key news events today

BoJ Core CPI (5:00 am GMT)

What can we expect from JPY today?

After moderating significantly lower for most of last year, core inflation as reported by the Bank of Japan (BoJ) accelerated for the second consecutive month, rising from 1.5% in October to 1.9% YoY in December. This latest result also marked the second successive month where inflation exceeded its forecast, signalling a return of inflationary pressures in the land of the rising sun. The yen could see further appreciation in the coming months should inflation expectations continue to rise higher.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro reached a high of 1.0533 on Monday before fizzling out around this level. This currency pair was sliding lower towards 1.0450 as Asian markets came online as demand for the greenback picked up on early Tuesday.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 12 December to mark the third 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 3.15%, 3.40% and 3.00% respectively.
• The disinflation process is well on track and most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term 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 Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• 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 30 January 2025.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Waning demand for the greenback drove USD/CHF to an overnight low of 0.8965 on Monday. However, this currency pair found its footing around 0.8989 at the beginning of the Asia session to climb above the threshold of 0.9000. Should demand rekindle for the dollar, USD/CHF could edge higher on Tuesday.

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?

Cable hit a high of 1.2523 before retreating away from this level on Monday. This currency pair was pulling back towards 1.2450 at the beginning of the Asia session but it should remain elevated on Tuesday.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.75% on 19 December 2024 – three members preferred to reduce the Bank rate by 25 basis points, bringing it down to 4.50%.
• 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.
• Twelve-month CPI inflation had increased to 2.6% in November from 1.7% in September, slightly higher than previous expectations while services consumer price inflation had remained elevated, at 5.0%, while core goods price inflation had risen to 1.1%.
• Headline CPI inflation was slightly higher than previous expectations, owing in large part to stronger inflation in core goods and food, and is expected to continue to rise slightly in the near term.
• Most indicators of UK near-term activity have declined with Bank staff expecting GDP growth to be weaker at the end of the year than originally projected in the November Monetary Policy Report.
• Bank staff now expected zero GDP growth in 2024 Q4, weaker than the 0.3% that had been incorporated in the November Report, broadly consistent with the latest combined steer from business surveys and the available official data.
• The Committee now judges that the labour market is broadly in balance as annual private sector regular average weekly earnings growth picked up quite sharply in the three months to October but there remains significant uncertainty around developments in the labour market.
• Monetary policy has been guided by the need to squeeze remaining inflationary pressures out of the economy to achieve the 2% target both in a timely manner and on a lasting basis. Over recent quarters there has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.
• The Committee continues to monitor closely the risks of inflation persistence and will assess the extent to which the evolving evidence is consistent with more constrained supply, which could sustain inflationary pressures, or with weaker demand, which could lead to the emergence of spare capacity in the economy and push down inflation; a gradual approach to removing monetary policy restraint remains appropriate.
• 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 6 February 2025.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Weakness in the Loonie has kept USD/CAD above 1.4300 since the beginning of the year. This currency pair was floating around 1.4380 as Asian markets came online and could grind higher as the day progresses.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.25% while continuing its policy of balance sheet normalization on 11 December; this marked the fifth consecutive meeting where rates were reduced.
• Canada’s economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports.
• The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force while wage growth showed some signs of easing, but remains elevated relative to productivity.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• CPI inflation has been about 2% since the summer and is expected to average close to the 2% target over the next couple of years. Since October, the upward pressure on inflation from shelter and the downward pressure from goods prices have both moderated as expected.
• Looking ahead, the GST holiday will temporarily lower inflation but that will be unwound once the GST break ends. In addition, the possibility the incoming US administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook.
• 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 by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The Governing Council has reduced the policy rate substantially since June and going forward, they will be evaluating the need for further reductions in the policy rate one decision at a time.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 29 January 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

Crude oil prices fell on Monday as news of surging interest in Chinese start-up DeepSeek’s low-cost artificial intelligence (AI) model raised concerns over this sector’s perceived lower energy consumption by power data centres. WTI oil fell over 1.5%, tumbling as low as $72.38 before stabilizing around $73 per barrel. Moving over to U.S. inventories, the API stockpiles bucked a five-week streak of falling inventories as 1M barrels of crude were added to storage last week. Should inventories continue to build for the second consecutive week, it could add further woes to oil prices late Tuesday.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 28 January 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 108.50

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

1st support: 106.73
Supporting reasons: Identified as an overlap support that aligns with the 78.6% Fibonacci projection, indicating a potential level where price could find support once more.

1st resistance: 109.38
Supporting reasons: Identified as an overlap resistance that aligns with the 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.0345

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

1st support: 1.0251

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

1st resistance: 1.0535
Supporting reasons:  Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 162.34

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

1st support: 159.78

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

1st resistance: 164.77
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

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: 0.8372

Supporting reasons: Identified as a pullback support, indicating a potential area where buying pressures could intensify

1st support: 0.8326

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

1st resistance: 0.8432
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 1.2403

Supporting reasons: Identified as an overlap resistance  that aligns with the 100% Fibonacci projection, indicating a potential area where selling pressures could intensify

1st support: 1.2367

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

1st resistance: 1.2609
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/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: 191.87

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

1st support:  190.18
Supporting reasons: Identified as a pullback support that aligns close to the 78.6% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 194.54
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

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

Pivot: 0.9092

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

1st support: 0.8973
Supporting reasons: Identified as an overlap support that aligns with the 50% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 0.9194
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

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

Pivot: 156.61

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

1st support: 153.40
Supporting reasons: Identified as an overlap support that aligns close to the 50% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 158.54
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

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

Pivot: 1.4415
Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify

1st support: 1.4300
Supporting reasons: Identified as multi-swing-low support that aligns close to a 38.2% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.4516
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.6324

Supporting reasons: Identified as an overlap resistance that aligns with a 23.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.6172

Supporting reasons: Identified as a multi-swing-low support that aligns with a 78.6% Fibonacci retracement, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6448
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.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.5724

Supporting reasons: Identified as an overlap resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 0.5542

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

1st resistance: 0.5885

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

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 44,525.60

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

1st support: 43,933.88

Supporting reasons: Identified as a swing-low support that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 45,103.25

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

DE40 (DAX):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 21,114.40
Supporting reasons: Identified as a swing-low support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 20,918.30

Supporting reasons: Identified as an overlap support that aligns close to a 38.2% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 21,528.30
Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 6,041.80

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

1st support: 5,930.40

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

1st resistance: 6,123.30

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

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 104,368.99

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

1st support: 98,987.55
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 108,006.97
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 3,287.13

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

1st support: 3,028.93
Supporting reasons: Identified as a multi-swing-low support that aligns with a 78.6% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 3,473.97
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 75.11
Supporting reasons: Identified as an overlap resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 72.96
Supporting reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 76.54
Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

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

Pivot: 2754.59

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

1st support: 2,717.61

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

1st resistance: 2776.50

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

The accuracy, completeness and timeliness of the information contained on this site cannot be guaranteed. IC Markets does not warranty, guarantee or make any representations, or assume any liability regarding financial results based on the use of the information in the site.

News, views, opinions, recommendations and other information obtained from sources outside of www.icmarkets.com, used in this site are believed to be reliable, but we cannot guarantee their accuracy or completeness. All such information is subject to change at any time without notice. IC Markets assumes no responsibility for the content of any linked site.

The fact that such links may exist does not indicate approval or endorsement of any material contained on any linked site. IC Markets is not liable for any harm caused by the transmission, through accessing the services or information on this site, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user’s software, hardware, data or property. 

The post Tuesday 28th January 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 28 January 2025

What happened in the U.S. session?

New home sales rose 3.6% MoM in January as 698K homes were purchased, firmly above market expectations of 670K. The latest figures also marked the highest since September and signalled a welcomed rebound in sales activity for this segment. After hitting a low of 106.96 on Monday, the dollar index (DXY) retraced higher towards 107.50 while spot prices for gold remained under pressure as it hovered around $2,740/oz.

What does it mean for the Asia Session?

After moderating significantly lower for most of last year, core inflation as reported by the Bank of Japan (BoJ) accelerated from 1.5% to 1.7% YoY in November as it exceeded the forecast of 1.5%. December’s estimate of 1.7% points to an unchanged reading but another surprise to the upside could pressure the BoJ into a further hawkish stance and potentially strengthen the yen in the near term. USD/JPY was floating around 154.50 in early trading on Tuesday.

The Dollar Index (DXY)

Key news events today

Durable Goods Orders (1:30 pm GMT)

Consumer Confidence (3:00 pm GMT)

What can we expect from DXY today?

New orders for durable goods have been weak from August through November but the forecast for December suggests an uptick in manufactured goods. Meanwhile, the Conference Board Consumer Confidence survey pulled back in December as concerns about the future outlook returned, particularly for future business conditions and incomes. However, January’s estimate of 105.7 points to a slight improvement in consumer sentiment and if combined with higher-than-anticipated orders, demand for the dollar could rekindle later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted by a majority to lower the Federal Funds Rate target range by 25 basis points to 4.25 to 4.50% on 18 December. Voting against the action was Beth M. Hammack, who preferred to maintain the target range at 4.5 to 4.75%.
• 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 labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• The 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 considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• 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.
• In addition, the Committee will continue reducing its holdings of Treasury securities, and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 28 to 29 January 2025.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

Durable Goods Orders (1:30 pm GMT)

Consumer Confidence (3:00 pm GMT)

What can we expect from Gold today?

New orders for durable goods have been weak from August through November but the forecast for December suggests an uptick in manufactured goods. Meanwhile, the Conference Board Consumer Confidence survey pulled back in December as concerns about the future outlook returned, particularly for future business conditions and incomes. However, January’s estimate of 105.7 points to a slight improvement in consumer sentiment and if combined with higher-than-anticipated orders, demand for the dollar could rekindle later today – a result that could weigh on gold prices.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

With demand for the greenback picking up in early Tuesday trading, the Aussie fell under 0.6300. This currency pair tumbled towards 0.6450 as Asian markets came online and should overhead pressures increase further, the downfall could extend 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 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 reversed off Monday’s high at 0.5723 to fall under 0.5700. With demand for the greenback rekindling on Tuesday, this currency pair slid lower towards 0.5650 at the beginning of the Asia session.

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 Bullish

The Japanese Yen (JPY)

Key news events today

BoJ Core CPI (5:00 am GMT)

What can we expect from JPY today?

After moderating significantly lower for most of last year, core inflation as reported by the Bank of Japan (BoJ) accelerated from 1.5% to 1.7% YoY in November as it exceeded the forecast of 1.5%. December’s estimate of 1.7% points to an unchanged reading but another surprise to the upside could pressure the BoJ into a further hawkish stance and potentially strengthen the yen in the near term.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro reached a high of 1.0533 on Monday before fizzling out around this level. This currency pair was sliding lower towards 1.0450 as Asian markets came online as demand for the greenback picked up on early Tuesday.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 12 December to mark the third 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 3.15%, 3.40% and 3.00% respectively.
• The disinflation process is well on track and most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term 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 Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• 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 30 January 2025.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Waning demand for the greenback drove USD/CHF to an overnight low of 0.8965 on Monday. However, this currency pair found its footing around 0.8989 at the beginning of the Asia session to climb above the threshold of 0.9000. Should demand rekindle for the dollar, USD/CHF could edge higher on Tuesday.

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?

Cable hit a high of 1.2523 before retreating away from this level on Monday. This currency pair was pulling back towards 1.2450 at the beginning of the Asia session but it should remain elevated on Tuesday.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.75% on 19 December 2024 – three members preferred to reduce the Bank rate by 25 basis points, bringing it down to 4.50%.
• 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.
• Twelve-month CPI inflation had increased to 2.6% in November from 1.7% in September, slightly higher than previous expectations while services consumer price inflation had remained elevated, at 5.0%, while core goods price inflation had risen to 1.1%.
• Headline CPI inflation was slightly higher than previous expectations, owing in large part to stronger inflation in core goods and food, and is expected to continue to rise slightly in the near term.
• Most indicators of UK near-term activity have declined with Bank staff expecting GDP growth to be weaker at the end of the year than originally projected in the November Monetary Policy Report.
• Bank staff now expected zero GDP growth in 2024 Q4, weaker than the 0.3% that had been incorporated in the November Report, broadly consistent with the latest combined steer from business surveys and the available official data.
• The Committee now judges that the labour market is broadly in balance as annual private sector regular average weekly earnings growth picked up quite sharply in the three months to October but there remains significant uncertainty around developments in the labour market.
• Monetary policy has been guided by the need to squeeze remaining inflationary pressures out of the economy to achieve the 2% target both in a timely manner and on a lasting basis. Over recent quarters there has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.
• The Committee continues to monitor closely the risks of inflation persistence and will assess the extent to which the evolving evidence is consistent with more constrained supply, which could sustain inflationary pressures, or with weaker demand, which could lead to the emergence of spare capacity in the economy and push down inflation; a gradual approach to removing monetary policy restraint remains appropriate.
• 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 6 February 2025.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Weakness in the Loonie has kept USD/CAD above 1.4300 since the beginning of the year. This currency pair was floating around 1.4380 as Asian markets came online and could grind higher as the day progresses.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.25% while continuing its policy of balance sheet normalization on 11 December; this marked the fifth consecutive meeting where rates were reduced.
• Canada’s economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports.
• The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force while wage growth showed some signs of easing, but remains elevated relative to productivity.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• CPI inflation has been about 2% since the summer and is expected to average close to the 2% target over the next couple of years. Since October, the upward pressure on inflation from shelter and the downward pressure from goods prices have both moderated as expected.
• Looking ahead, the GST holiday will temporarily lower inflation but that will be unwound once the GST break ends. In addition, the possibility the incoming US administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook.
• 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 by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The Governing Council has reduced the policy rate substantially since June and going forward, they will be evaluating the need for further reductions in the policy rate one decision at a time.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 29 January 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

Crude oil prices fell on Monday as news of surging interest in Chinese start-up DeepSeek’s low-cost artificial intelligence (AI) model raised concerns over this sector’s perceived lower energy consumption by power data centres. WTI oil fell over 1.5%, tumbling as low as $72.38 before stabilizing around $73 per barrel. Moving over to U.S. inventories, the API stockpiles bucked a five-week streak of falling inventories as 1M barrels of crude were added to storage last week. Should inventories continue to build for the second consecutive week, it could add further woes to oil prices late Tuesday.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 28 January 2025 first appeared on IC Markets | Official Blog.

US Tech Smashed on AI Update – Nasdaq Down Over 3%

US tech indices, and more specifically AI-related stocks, took a huge hit in trading yesterday as updates from Chinese AI startup DeepSeek’s much cheaper technology led to a run on the market from concerned investors. There was a clear split in the US major indices, with the Dow gaining 0.65% on the day, whilst the tech-heavy S&P and Nasdaq took big hits, losing 1.46% and 3.07% respectively. US treasury yields pulled back strongly as investors moved funds to safer options, with the 2-year dropping 7.1 basis points to 4.195% and the 10-year falling 8.9 basis points to 4.532%. Oil prices also took a hit as demand concerns weighed, with Brent off 11.97% to $76.95 and WTI down 2.10% to $73.09. Gold retreated from its latest run at a new record level, down 1.03% on the day to close at $2,741.75.

Nvidia and AI Stocks in Focus

2024 market darling Nvidia took a massive hit yesterday as its share price dropped by $589bn in market cap, recording the biggest one-day loss for a single stock in trading history. The share price dropped by over 17%, beating its previous record of 9% back in September. This all came on the back of updates out of China from AI startup DeepSeek – which had been flying very much under the radar – that their AI model can give a comparable performance to other models for a fraction of the price. Traders are now expecting even more volatility in this space in the coming sessions and days, as the market rushes to seek clarity on the overall situation and assess whether recent valuations have been accurate or if there will be even bigger corrections in the market.

Volatility to Remain High in Today’s Trading Sessions

Traders are expecting market volatility to remain high as we progress through the trading day. Sharp moves in equity markets overnight have led to moves across all financial products, and traders are expecting to see plenty more headlines hitting the newswires today. There is very little on the macroeconomic event calendar for the first two sessions of the day today, but event risk does pick up once New York opens. The first major US data releases of the week are due out early in the session, with Durable Goods Orders data set to drop. Market expectations are for the headline number to show a 0.4% increase month-on-month. Later in the day, we also have the CB Consumer Confidence (expected 105.7) data, alongside the Richmond Manufacturing Index numbers (expected -13), with the Consumer Confidence number likely to have the biggest influence on markets.

The post General Market Analysis – 28/01/25 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 28/1/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 1.01%, Shanghai Composite up 0.12%, Hang Seng up 0.84% ASX up 0.36%
• Commodities : Gold at $2786.35 (-0.76%), Silver at $30.65 (-1.48%), Brent Oil at $76.39 (-0.89%), WTI Oil at $74.04 (-0.83%)
• Rates : US 10-year yield at 4.586, UK 10-year yield at 4.6305, Germany 10-year yield at 2.5445

News & Data:

• (USD) Flash Manufacturing PMI  50.1 vs 49.8 expected
• (USD) Flash Services PMI  52.8 vs 56.4 expected

Markets Update:

Asian markets showed mixed movements on Monday as investors reacted to China’s manufacturing and industrial profit data. Japan’s Nikkei 225 slipped 0.14%, while the Topix gained 0.68%. Chip-related stocks in Japan saw significant declines, with Advantest plunging 8.2%, Tokyo Electron losing 4.53%, and Renesas Electronics edging down 0.19%. The drop came amid concerns over Chinese AI startup DeepSeek’s open-source large-language model, seen as a potential challenge to U.S. dominance in AI technology.

In Hong Kong, the Hang Seng Index rose 0.89% at the open, while mainland China’s CSI 300 added 0.28%. However, China’s manufacturing sector faced a setback, with the January Purchasing Managers’ Index unexpectedly contracting to 49.1, below the forecasted 50.1. Despite this, December’s industrial profits in China jumped 11% year-over-year, offering some optimism amid broader economic challenges. Markets in Australia, Taiwan, and South Korea were closed for holidays.

To support its ailing stock market, China’s Securities Regulatory Commission (CSRC) announced measures to promote index investment products, including equity and bond ETFs. These initiatives, unveiled on Sunday, build on earlier efforts urging state-owned mutual funds and insurers to increase their equity holdings. Hong Kong, meanwhile, is set to release December trade data, which could further impact regional market sentiment.

In the U.S., markets ended a strong week on a softer note. The S&P 500 fell 0.3% to 6,101.24, the Nasdaq Composite lost 0.5% to 19,954.30, and the Dow Jones Industrial Average declined 140.82 points to 44,424.25. Investor enthusiasm surrounding Donald Trump’s return to the White House drove risk assets higher, with all three major indexes posting their second straight weekly gains, signaling renewed bullish momentum.

Upcoming Events: 

• 03:00 PM GMT – USD New Home Sales

The post Monday 27th January 2025: Asian Markets Mixed as Investors Assess China’s Economic Data first appeared on IC Markets | Official Blog.