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Financial Times front page:

This article was written by Eamonn Sheridan at www.forexlive.com.

Manufacturing PMI: 50.6, 27-month high

• prior was 50.2

Services PMI 51.4

• prior 51.2

Composite 51.2

• prior 51.1

6-month high

Flash Australia PMI Composite Output Index(1): 51.2 (Jan:
51.1). 6-month high.
Flash Australia Services PMI Business Activity Index(2):
51.4 (Jan: 51.2). 6-month high.
Flash Australia Manufacturing Output Index(3)
: 50.1 (Jan:
50.5). 2-month low.
Flash Australia Manufacturing PMI(4)
: 50.6 (Jan: 50.2). 27-
month high.

Nice to see improvement, although it is limited.

Commenting on the flash PMI data, Jingyi Pan,
Economics Associate Director at S&P Global Market
Intelligence said:

• “February’s S&P Global Flash Australia PMI data outlined
  further improvements in private sector business
  conditions. Although modest, the expansion in private
  sector output was the quickest in six months to suggest
  that economic conditions further improved in the
  opening quarter of 2025. Moreover, the improvements
  were broad-based as faster services new business
  growth was accompanied by a renewed rise in goods new
  orders, the first since November 2022.
• “That said, a fall in business sentiment to the lowest
  level since last October provided mixed signals for nearterm economic performance. Anecdotal evidence
  reflected concerns over the economic outlook despite
  business activity rising over February and interest rates
  being lowered during the survey period. This sense of
  caution was also prevalent in firms’ reluctance to fully
  pass on cost increases, leading to lowered selling price
  inflation in February.”

***

Final February data will be published on 3 March for
manufacturing and on 5 March for services and composite
indicators.

This article was written by Eamonn Sheridan at www.forexlive.com.

• Major US indices close lower but retraces losses
• US crude oil futures settled $72.57
• More from Musalem: Expects inflation to wane but there are upside risks
• White House nat sec advisory Waltz: Zelensky needs to return to table on critical minerals
• MUFG: JPY now the best-performing G10 currency in 2025, staying short EUR/JPY
• Morgan Stanley G10 FX outlook: AUD, JPY, GBP, NZD, CAD, CHF
• US sells 30-year TIPS at 2.403% vs 2.40% WI
• Zelenskiy:Ukraine is ready for strong and useful agreement w/US on investments &insecurity
• More Musalem: Productivity speed up is reaching its trend
• US Middle East envoy Witkoff: Trump plan for Gaza is not an eviction plan for Palestinians
• St. Louis Fed Pres. Musalem: Assurance inflation is returning to 2% before policy changes
• Weekly crude oil inventory build of 4.633M vs estimate 3.144M
• European indices are closing the day with mixed results
• Atlanta Fed Bostic Doesn’t expect new burst of inflation, though widespread uncertainty
• Feds Goolsbee: PCE is not likely to be as sobering as the CPI numbers
• EU Consumer confidence flesh for February -13.6 versus -14.0 estimate
• Leading index for January -0.3% versus -0.1% estimate
• GEOPOLITICs today: Zelenskiy meets with US envoy Kellogg. Putin talks with Saudi about oil
• Trump: BALANCE BUDGET NOW??? LETS GIVE IT S A SHOT. LOTS OF MONEY COMING IN FROM TARIFFS.
• Canada January producer price index +1.6% m/m vs +0.2% expected
• Philadelphia Fed Business index for February 18.1 vs 20.0 estimate
• Canada January new housing price index -0.1% vs -0.1% prior
• US initial jobless claims 219K vs 215K estimate
• ForexLive European FX news wrap: USD/JPY flirts with break of 150.00 level
• US Treasury secretary Bessent: I don’t want others to manipulate their currencies
• ECB’s Simkus: I agree with expectations of 3 more cuts in 2025

The USD fell vs all the major currencies with the fall vs the JPY (-1.21%) , and the NZD (-1.03%), the biggest movers. The greenback fell the least vs the CAD (-0.44%) . The dollar index (DXY) fell -0.75%, its 3rd largest decline since November 2024.

The USDJPY moved to a new low for the year and to the lowest level going back to December. At session lows, the pair moved to a key swing area between 149.08 and 149.39. The 50% midpoint of the move up from September comes in at 149.22 between the area. That area will be key going into the new trading day.

For the USDCHF< the pair moved to test the low of the trading range going back to mid-December between 0.8965 to 0.9196 (see chart below). That level will be a key barometer for buyers and sellers in the new trading day. Moving below would be more bearish. Stay above and the pair can bounce from the 2 week decline.

The GBPUSD stretched higher today and at session highs tested the pairs key 100 day MA at 1.2660. That level will be a key barometer for the pair in the new trading day.

The AUDUSD is trading at it’s highest level since mid-December and is moving toward key technical targets defined by the 38.2% of the move down from the September high at 0.64139 and then the falling 100 day MA at 0.6421. The current price is at 0.6394 after trading as high as 0.6404.

US rates were lower for the day although yields are near the middle of the days trading range. Looking at the yield curve:

• 2 year 4.269%, -0.4 bps
• 5 year 4.346%, -2.5 bps
• 10 year 4.505%, -3.0 bps
• 30 year 4.746%, -1.7 bps

Concerns about the impact of tariffs, DOGE layoffs and US growth is also weighing on the greenback.

There were three Fed members who spoke today including Fed’s Bostic, Musalem and Goolsbee. They tended to be cautious although Fed’s Bostic did still see 2 cuts between now and the end of the year.

A summary of their comments:

• St. Louis Fed President Musalem insists inflation must show clear progress toward 2% before policy changes. While he expects inflation to decline, risks remain tilted upward, and persistent inflation could warrant further tightening. He flagged stalling productivity gains and broader economic risks, including tariffs, which he views as one-time price increases needing further study. Musalem sees modestly restrictive policy as necessary to reach the 2% target but cautions that it will take time. Despite uncertainty, growth remains resilient, and confidence in inflation’s decline is key before considering rate cuts.
• Atlanta Fed’s Bostic expects inflation to decline toward 2% but acknowledges uncertainty and volatility in the data. While the labor market is easing, it remains stable, supporting the Fed’s dual mandate. He still anticipates two rate cuts but warns that outlook could change. Bostic highlights business concerns over deregulation, tariffs, and immigration and notes some firms may pass import taxes to consumers. He stresses the Fed must avoid balance sheet instability and is reviewing its employment framework. Bostic sees policy as moderately restrictive but remains cautious about inflation risks before adjusting rates.
• Chicago Fed President Goolsbee expects PCE inflation to be milder than CPI, indicating a stable outlook. He sees steady employment and tight credit conditions but remains cautious about supply shocks, particularly from tariffs. While 2018 tariffs had little inflation impact, he warns that larger disruptions, like COVID-era shocks, could be more concerning.

US stocks opened lower and stayed in the red for the entire day, but bounced late taking the indices comfortably off the lows for the day:

• Dow industrial average fell -450.94 points or -1.01% at 44176.65. However, at session lows, the index was down -677.43 points.
• S&P index fell -26.63 points or -0.43% at 6117.52. At session lows, the index was down -59.56 points.
• NASDAQ index fell -93.89 points or -0.47% at 19962.36. At session lows the index was down to 61.23 points
• Russell 2000-20.71 points or -0.91% at 2261.74. At session lows the index was down -32.34 points.

Crude oil rose $0.41 or 0.57% at $72.81 after bouncing off the 200-hour MA near the low for the day at $71.76.

Gold is trading up $6.16 or 0.21% at $2939.32. The high price for the day i. Nched closer to the $3000 level at $2954.94

The price of Bitcoin moved higher and traded to the highest level since February 14 at $98,758.

TGIF to all.

This article was written by Greg Michalowski at www.forexlive.com.

New Zealand January 2025 Exports 6.19bn NZD

• prior 6.67bn

Imports 6.68bn NZD

• prior 6.58bn

NZD/USD little changed. As I’ve noted previously the kiwi$ is more being impacted by international developments than domestic. Although the Reserve Bank of New Zealand cut shoved the currency around earlier this week.

• ForexLive Asia-Pacific FX news wrap: RBNZ’s 3rd consecutive 50bp rate cut, NZD higher

This article was written by Eamonn Sheridan at www.forexlive.com.

At 2200 GMT /1700 US Eastern time Federal Reserve Board Governor Adriana Kugler speaks on “Navigating Inflation Waves While Riding on the Phillips Curve” before the 2025 Whittington Lecture event hosted by Georgetown University.

Any comments on inflation, let alone a whole speech, are going to grab the market’s attention.

**

More central bank speak follows. Michele Bullock, Governor; Andrew Hauser, Deputy Governor; Sarah Hunter, Assistant Governor (Economic); and Brad Jones, Assistant Governor (Financial System) will all appear before the Australian parliament’s House of Representatives Standing Committee on Economics

• at 9.30 am Canberra time
• 2230 GMT
• 1730 US Eastern time

Andrew Hauser, Deputy Governor, spoke yesterday. Link to the post here. I noted separately that:

• While most of comments were erring toward the ‘data dependence’ view on forward guidance and that inflation is still a challenge, he did say, which I thought was very instructive, that the Bank’s modelling prior to Tuesday’s rate cut was that inflation should decline even if rates were held steady. A wee more dovish, or at least less hawkish, than I thought he would be.

That’s a bit of bombshell IMO. I wasn’t expecting any follow up RBA rate cuts for maybe a quarter. Hauser’s comment has me rethinking, sooner maybe?

**

And the fun doesn’t stop there. January inflation data from Japan is due today. The Tokyo-area inflation (viewed as a bit of a heads-up to the national figure) showed no let up in price pressure:

• Core inflation in Tokyo climbed to 2.5%, its fastest annual increase in nearly a year

The core measure for national CPI is expected to have climbed in January.

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.
• I’ve noted data for New Zealand and Australia with text as the similarity of the little flags can sometimes be confusing.

This article was written by Eamonn Sheridan at www.forexlive.com.

• Prior month 44.3 (the expectation was for -5.2….The result may have been influenced by the election)
• Manufacturing index for February 18.1 vs 20.0 estimate

Details:

• 6 month index 27.8 vs 46.3 last month.
• Capex index 6-month forward 14.0 vs 39.0 last month
• employment 5.3 vs 11.9 last month
• Prices paid 40.5 vs 31.9 last month
• New Orders 21.9 vs 42.9 last month
• Shipments 26.3 versus 41.0 last month.
• Unfilled orders 1.4 versus 24.0 last month
• delivery time 12.4 versus 6.8 last month.
• Inventories -0.4 versus 11.7 last month.
• Average workweek 2.9 versus 20.5 last month.

For 6 month forward:

• New orders 33.1 versus 57.3 last month.
• Shipments 36.5 versus 60.2 last month
• unfilled orders 11.0 versus 14.5 last month.
• Delivery times -1.2 versus 0.5 last month.
• Inventories 16.4 versus 20.2 last month.
• Prices paid 50.6 versus 67.3 last month
• prices received 46.1 versus 53.6 last month
• employment 23.7 versus 40.4 last month
• average workweek 11.6 versus 14.9 last month

Summary from the Federal Reserve of Philadelphia:

Responses to the February Manufacturing Business
Outlook Survey suggest regional manufacturing activity
continued to expand this month. The indicatorsfor current
activity, new orders, and shipments remained elevated. On
balance, the firms indicated an increase in employment, and
the price indexes remained above their long-run averages.
The survey’s broad indicators for future activity suggest
expectations for growth over the next six months.

Last month’s surge seems to have been an anomaly, but the index remains positive and near higher levels going back to April 2022.

This article was written by Greg Michalowski at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

This article was written by Eamonn Sheridan at www.forexlive.com.

The major indices are closing lower but it could’ve been worse.

• Dow industrial average fell -450.94 points or -1.01% at 44176.65. However, at session lows, the index was down -677.43 points.
• S&P index fell -26.63 points or -0.43% at 6117.52. At session lows, the index was down -59.56 points.
• NASDAQ index fell -93.89 points or -0.47% at 19962.36. At session lows the index was down to 61.23 points
• Russell 2000-20.71 points or -0.91% at 2261.74. At session lows the index was down -32.34 points.

Shares of Meta fell for the third consecutive day, and is down 6.3% from it’s all time high..

Palantir fell $-5.79 or -5.17% to $106.27. Yesterday, shares tumbled -10.08% after trading to a new all-time high.

Software continued to fall with the IGV tech software ETF falling -1.83% after yesterday’s -1.75% decline.

Costco shares fell $-27.71 or -2.61% in sympathy with Walmart which saw its shares move down $-6.79 or -6.53% after giving less than expectations forwa. G guidance

This article was written by Greg Michalowski at www.forexlive.com.

• Europe needs to step up for their own defense as a NATO partner
• Calls for allies to pay up by June NATO summit
• Zelensky needs to come back to the table on critical minerals
• Trump is obviously very frustrated with Zelensky right now

It sounds like Zelensky has already tried to tone it down.

This article was written by Adam Button at www.forexlive.com.

MUFG highlights the JPY as the best-performing G10 currency in 2025, driven by narrowing yield differentials and stronger-than-expected Japanese GDP growth. They maintain a short EUR/JPY position, targeting 150.

Key Points:

1️⃣ JPY is the Best-Performing G10 Currency in 2025

• JPY has strengthened by 4.8% vs. USD and 4.0% vs. EUR YTD.
• USD/JPY has fallen below 150.00, approaching key support levels.

2️⃣ Yield Differentials Continue to Narrow

• The 10-year UST-JGB spread has tightened by ~50bps, falling to its lowest since before the US election.
• JGB yields surged to 1.45%, more than doubling in the past year, reflecting growing BoJ policy normalization expectations.

3️⃣ Stronger Japanese Growth & Wage Pressures Support BoJ Hikes

• Q4 GDP grew by 2.8% Q/Q, following 1.7% Q3 growth, indicating economic resilience despite BoJ rate hikes.
• BoJ sees sustained wage growth, with full-time base pay rising 3.0%—consistent with the 2% inflation target.
• Upcoming wage negotiations (Shunto) on March 14 will be key for BoJ policy direction.

4️⃣ Staying Short EUR/JPY, Targeting 150

• BoJ’s continued hawkish tilt and yield spread compression should drive further JPY strength vs. EUR.
• MUFG maintains its short EUR/JPY trade, expecting a decline towards 150.

Conclusion:

MUFG remains bearish on EUR/JPY, expecting JPY strength to persist due to tightening yield differentials, solid economic growth, and stronger wage pressures. They maintain a short EUR/JPY position, targeting 150 (spot at 157.00).

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This article was written by Adam Button at www.forexlive.com.

Morgan Stanley maintains its broader G10 FX outlook, favoring AUD and JPY as top performers, GBP resilience, and NZD gains trailing AUD. They see CAD and CHF as underperformers due to trade risks and funding flows.

Key Points:

1️⃣ Top Performers: AUD & JPY

• AUD: Gains supported by positive local factors and global risk appetite.
• JPY: Strength driven by lower US yields over time and ongoing BoJ policy normalization.

2️⃣ GBP Resilience Despite Bearish Sentiment

• Elevated carry attractiveness supports GBP, even as sentiment on the UK economy remains weak.

3️⃣ NZD Gains, but Lags AUD

• NZD is set to appreciate, but will underperform AUD due to monetary policy divergence and weaker domestic outlook.

4️⃣ Laggards: CAD & CHF

• CAD: Domestic economic challenges and persistent trade risk premium weigh on the currency.
• CHF: Faces pressure as it becomes the “funding currency of choice” in G10 FX.

Conclusion:

Morgan Stanley expects AUD and JPY to lead G10 FX performance, GBP to stay resilient, and NZD to appreciate but underperform AUD. CAD and CHF are seen as laggards, pressured by trade risks and funding flows.

For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.

This article was written by Adam Button at www.forexlive.com.

The US dollar is broadly softer today and falling yields have contributed to that.

• Prior was 2.055%
• Bid to cover 2.48 vs 2.61 prior

There hasn’t been much of a market reaction to this but yields have been creeping up from the lows in the last hour or so. That could put a floor under the dollar.

This article was written by Adam Button at www.forexlive.com.