Sample Category Title

Markets

As bombings in the Middle-East continue, markets jump from headline to headline in search of something that might structurally change current dynamics. Today’s early focus went to Iran’s state-run Islamic Republic News Agency (IRNA). They said that deputy foreign minister Takht-Ravanchi commented in an interview with MS NOW on recent nuclear negotiations. The nation’s stockpile of highly enriched uranium “is the result of our practical achievements and that we are ready to get rid of it, provided we get something good in return”. Rewatching the interview, we couldn’t retrace those quotes. He did say that Iran is in defensive mode and that it didn’t had any contact with the US (or any other nation for that matter) since the start of the war. The IRNA article temporarily stopped the test of the $85/b area in Brent crude, but the correction lower didn’t went far. In the same vein, algo trading briefly lifted European stock markets into positive daily territory only to succumb those profits as the US trading session gained traction. The trade-weighted dollar spiked lower on the headlines, but that move won’t make it in this week’s highlights. Next talking points were an Iranian drone attack on Azerbaijan’s Naxcivan enclave which only broadened the conflict, Qatar reporting more missiles and drones being fired from Iran, UK PM Starmer confirming that UK jets were in the skies last night over Jordan and Qatar and the WSJ reporting that ship insurers are willing to work with US President Trump on the Straight of Hormuz cover. US defence secretary Hegseth will give a new press briefing later today.

The recap above highlights low visibility on the near or longer term developments in the conflict which Israeli and US officials say might last for weeks. In this context we err on the side of higher energy prices, weighing on both stocks and bonds and making USD the by default winner in FX space. For the record some levels which are prone to the developing story. EUR/USD holds around 1.16, so above first support at 1.1573. European and US equity indices currently lose about 0.5% with the EuroStoxx50 failing to really get away from the 5800 support area. The German yield curve bear flattens with yields adding between 3.7 bps (30-yr) and 10.2 bps (2-yr) with Minutes of the previous ECB meeting suggesting that the current policy rate allows enough flexibility to react to shocks. Current patience should not be mistaken for being hesitant to act or being asymmetric. The market implied probability of a September rate hike is now 50%. German Bunds and UK Gilts underperform US Treasuries today.

News & Views

Swedish inflation fell short of expectations in February. The CPIF headline gauge (using a fixed interest rate) eased from 2% to 1.7% vs 1.8% expected with the monthly pace coming in at 0.6%. Core CPIF missed the annual bar by the same margin with the 1.4% the lowest outcome since August 2021. The Riksbank itself had penciled in a much lower 1.3% in the December projections for the overall figure while expecting core inflation at 1.7%. Sweden’s central bank kept the policy rate unchanged at 1.75% during the end-January policy meeting and expects it to remain at that level for some time to come. We do not think today’s inflation numbers throw the Riksbank off-track. Sweden’s economy grew at a solid pace at the end of last year despite the large amount of (geopolitical) uncertainty, the central bank said, with household consumption continuing to rise and the labour market showing increasingly clear signs of improvement. With risks since this week clearly tilted to the upside, the Riksbank has every reason to wait things out. The CPI print barely left a dent in SEK. EUR/SEK is trading a tad higher in the 10.68 area.

UK CFOs in the Bank of England monthly Decision Maker Panel lowered their year-ahead inflation expectations by 0.1 ppt to 3.1% in the three months to February, the lowest since February 2025. The 3-year gauge inched lower similarly, to 2.8%. They reported annual wage growth at 4.3% (-0.1 ppt) and expected wages to grow 3.6% (unchanged) in the year ahead, implying a 0.7 ppt cooldown over the next 12 months. Annual employment growth was -0.2%, which was less of a contraction than the -0.5% in the three months to January. Expectations for employment growth over the next year improved slightly, rising by 0.3 ppts to 0.1%. It’s the first positive reading since August of last year. In terms of the central bank rate, the three-month ahead expectations indicator stood at 3.5% with the year- and three-year series printing at 3.2% and 3.1% respectively. It should be noted that the survey was conducted between Feb 6 and Feb 20, before the recent sharp increase in energy prices.

USDJPY strengthened on Thursday after a pullback from new multi-week high (157.96, hit on Mar 3) was contained by rising 10DMA (156.34).

Thursday’s action has so far been shaped in a Hammer candle that signals potential end of a shallow correction (157.96/156.44).

Overall structure remains firmly bullish on daily chart, supported by strong positive momentum and multiple bull-crosses of daily MA’s (in bullish configuration), contributing to signals of bullish continuation of the upleg from 152.26 (Feb 12 low) following violation of key barrier at 157.65 (former top of Feb 9).

The notion is supported by strengthening dollar on increased safe-haven demand and fading expectations for Fed rate cuts, as deepening geopolitical crisis threatens of boosting inflation.

Bulls look for retest and clear break of Tuesday’s peak at 157.96 that would confirm fresh bullish signal and a double bottom at 152.11/26) and expose targets at 159.22/45 (tops of Jan 23/14).

Initial supports lay at 156.62/34 (Fibo 23.6% of 152.26/157.96 / 10DMA), followed by 155.98 (daily Tenkan-sen) and more significant 155.79 (Fibo 38.2%/top of thin daily cloud) which should contain potential dips and keep larger bulls in play.

Res: 157.65; 157.89; 158. 90; 159.22.
Sup: 156.62; 156.34; 155.98; 155.79.

Market Overview

The crypto market cap rose 4.8% to $2.45 trillion, then climbed to $2.50 trillion at the end of the day on Wednesday, a four-week high. This is a strong indication of a base forming and a reversal to growth. The capitalisation level is approaching the 50-day moving average, below which it has been steadily trading since the end of January. Consolidation above this line could be an additional signal of a reversal to growth.

On the other hand, this may be just a corrective rebound, as the typical Fibonacci correction range suggests a rebound to $2.53T for the decline since January and to $2.92T as part of a technical recovery from the entire decline since the October peak. Thus, despite the encouraging momentum, this may be nothing more than a rebound in a bear market.

Bitcoin rose to $74K, breaking through the resistance area of the last four weeks with an encouraging surge. We attribute the magnitude of the short squeeze to the confidence of bears who pulled their stops too close to the market price. The recovery lost momentum near the 61.8% level of the January-February decline and just short of the 50-day moving average. Simply put, the bulls still have to convince the community that the bear market is over.

News Background

Bitcoin jumped above $74K on Wednesday, to its highest level in a month, amid active inflows into US spot Bitcoin ETFs, totalling $1.4 billion over the last five trading sessions.

After five months of decline, Bitcoin has entered the third deepest oversold zone in its history, according to K33 Research. Historically, after such a bear market, the average 90-day return has been 62% (with a 78% probability).

The Kraken crypto exchange was the first to gain access to the US Federal Reserve’s payment system. Now, the crypto exchange’s subsidiary bank can use the central bank’s payment infrastructure alongside other American banks.

According to BitcoinTreasuries, public mining companies are selling off their cryptocurrency reserves en masse. The proceeds are being used to create infrastructure for artificial intelligence.

Daily Pivots: (S1) 1.1590; (P) 1.1622; (R1) 1.1670; More….

EUR/USD is staying in consolidations above 1.1529 temporary low and intraday bias stays neutral. On the downside, below 1.1529 will resume the fall from 1.2081. Sustained break of 1.1576 structural support would confirm rejection by 1.2 key psychological level. That should also confirm medium term topping on bearish divergence condition in D MACD. Further decline should be seen to 38.2% retracement of 1.0176 to 1.2081 at 1.1353 next. However, firm break of 1.1740 support turned resistance will revive near term bullishness, and bring stronger rebound back to retest 1.2081 high.

In the bigger picture, as long as 55 W EMA (now at 1.1494) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will add to the case of long term bullish trend reversal. Next medium term target will be 138.2% projection of 0.9534 to 1.1274 from 1.0176 at 1.2581. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Daily Pivots: (S1) 1.3318; (P) 1.3361; (R1) 1.3417; More...

GBP/USD is staying in consolidations above 1.3252 temporary low and intraday bias stays neutral. Fall from 1.3867 should at least be correcting the rise from 1.2009. Below 1.3252 will target 38.2% retracement of 1.2099 to 1.3867 at 1.3192. Sustained break there will pave the way to 1.3008 support. For now, risk will stay on the downside as long as 1.3574 resistance holds, in case of recovery.

In the bigger picture, as long as 1.3008 support holds, rise from 1.3051 (2022 low) should still be in progress for 1.4284 key resistance (2021 high). Decisive break there will add to the case of long term bullish trend reversal. However, firm break of 1.3008 will raise the chance of medium term bearish reversal and target 1.2099 support next.

Daily Pivots: (S1) 0.7765; (P) 0.7812; (R1) 0.7838; More….

No change in USD/CHF's outlook and intraday bias remains neutral. More consolidations could be seen below 0.7877 temporary top first. Further rise is expected as long as 0.7671 support holds. Rebound from 0.7603 is seen as correcting the whole fall from 0.9022. Above 0.76877 will target 0.8039 resistance next.

In the bigger picture, a medium term bottom could be in place at 0.7603 on bullish convergence condition in D MACD, Firm break of 0.8039 resistance will argue that it's at least correcting the down trend from 0.9002. Stronger rebound would then be seen to 38.2% retracement of 0.9200 to 0.7603 at 0.8213.

Daily Pivots: (S1) 156.64; (P) 157.26; (R1) 157.65; More...

USD/JPY recovered ahead of 55 4H EMA, but stays below 157.96 temporary top so far. Intraday bias stays neutral first. On the upside, above 157.96 will extend the rebound from 152.25 to retest 159.44 high. On the downside, though, break of 155.52 will bring deeper fall back to 152.07/152.25 support zone. Overall, price actions from 159.44 are viewed as a near term consolidation pattern. Outlook will remain bullish as long as 38.2% retracement of 139.87 to 159.44 at 151.96 holds.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.16) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

Global markets have shifted into a cautious pause after the relief rally that began on Wall Street yesterday and carried through the Asian session. The initial wave of panic selling earlier in the week has subsided, but investors are not yet ready to push risk assets decisively higher. Instead, trading activity has slowed as markets wait for clarity on two major uncertainties.

The first unknown remains the Middle East conflict. The key debate is whether the current military campaign will remain a short, concentrated operation or evolve into a prolonged confrontation. The outcome carries significant implications not just for geopolitics but also for the global inflation outlook.

Supporters of the “short war” scenario argue that the strategy of leadership decapitation and infrastructure degradation has severely damaged Iran’s ability to coordinate sustained military operations. In this view, the weakening of centralized command structures could eventually force either a rapid collapse in resistance or a relatively quick regime transition.

Others, however, warn that such optimism may underestimate Iran’s military doctrine. The country’s “Mosaic Defense” system deliberately decentralizes authority across multiple regional commands designed to operate independently. Even without direct coordination from Tehran, these autonomous cells could continue to wage asymmetric warfare.

For financial markets, the distinction between these scenarios is crucial. If the conflict remains contained to a few weeks, the current spike in oil prices may be treated as a temporary shock. Energy costs would rise briefly before stabilizing, allowing central banks to look through the inflation impact.

However, a prolonged confrontation could generate a much more problematic dynamic. Persistent disruptions to energy flows and shipping routes would likely produce a structural cost-push inflation cycle, complicating the policy outlook for central banks already grappling with fragile disinflation trends.

While geopolitics dominates the headlines, markets are also preparing for another major catalyst: the upcoming US Non-Farm Payrolls report. Following stronger-than-expected ADP private payroll data, expectations for a weak labor report have diminished significantly. This shift has already pushed market pricing for Fed rate cuts further into the future. Investors have scaled back bets on easing in the first half of 2026, reflecting confidence that the US economy remains resilient despite elevated interest rates.

The real risk for markets, however, lies in the wage component of the report. A strong jobs number combined with rising average hourly earnings could signal that inflation pressures remain persistent, particularly if energy prices remain elevated due to the geopolitical situation. In such a scenario, the Fed could face a renewed inflation risk. That environment would likely push policymakers toward an extended policy pause—and potentially even reopen the debate about whether the next move might eventually be another rate hike.

In currency markets, positioning reflects this cautious environment. Loonie is now the strongest performer this week, supported by elevated oil prices, followed by Dollar and Yen. At the other end of the spectrum, the Euro sits at the bottom of the rankings, followed by Swiss Franc and New Kiwi, while Sterling and the Aussie occupy the middle ground.

In Europe, at the time of writing, FTSE is down -0.17%. DAX is down -0.18%. CAC is down -0.26%. UK 10-year yield is up 0.078 at 4.454. Germany 10-year yield is up 0.065 at 2.822. Earlier in Asia, Nikkei rose 1.90%. Hong Kong HSI rose 0.28%. China Shanghai SSE rose 0.64%. Singapore Strait Times rose 0.70%. Japan 10-year JGB yield rose 0.039 at 2.158.

US initial jobless claims unchanged at 213k, vs exp 215k

US initial jobless claims were unchanged at 213k in the week ending February 28, slightly below expectation of 215k. Four-week moving average of initial claims fell -5k to 215k. Continuing claims rose 46k to 1,868k in the week ending February 21. Four-week moving average of continuing claims rose 7k to 1,852k.

ECB officials split between caution and baseline calm on war risks

ECB policymakers signaled caution today as they assessed the potential economic fallout from the escalating conflict involving Iran. While acknowledging the risk that higher energy prices could complicate the inflation outlook, officials indicated that the situation does not yet warrant a shift in monetary policy.

ECB Vice President Luis de Guindos said the bank’s "baseline" scenario assumes the conflict will prove "short-lived". However, he warned that a longer war could begin to influence inflation expectations, particularly if energy prices remain elevated for an extended period.

Finnish Governing Council member Olli Rehn took a more cautious stance, warning against assuming a quick resolution. He noted that the conflict had already ⁠had "quite ​some escalation", and could create a difficult macroeconomic combination of higher inflation and weaker growth across the Eurozone

At the same time, French Governing Council member Francois Villeroy de Galhau emphasized that the current situation does not justify a rate hike. Speaking to French radio, the central bank will continue to monitor developments carefully and assess policy decisions on a meeting-by-meeting basis.

Eurozone retail sales slip -0.1% mom in January as non-food spending weakens

Eurozone retail sales slipped -0.1% mom in January, falling short of expectations for a 0.2% increase. Looking at the breakdown, spending on food, drinks and tobacco rose 0.3%, providing the only notable source of support. However, this was more than offset by declines in other categories.

Non-food retail sales (excluding fuel) dropped -0.2% in Eurozone, while automotive fuel sales fell sharply by -1.1%, reflecting both weaker mobility demand and softer energy consumption after the holiday period.

Across the broader EU, retail sales also declined -0.1% mom. The strongest increases were recorded in Estonia (+4.4%), Latvia (+2.8%), and Portugal (+2.0%), while the steepest declines were seen in Slovakia (-3.5%), Slovenia (-1.9%), and Croatia (-1.3%).

China’s new growth target reflects strategic economic transition

Chinese Premier Li Qiang unveiled Beijing’s economic priorities for the year during the annual government work report at the National People's Congress, setting the country’s GDP growth target at 4.5% to 5%. The range represents a slight step down from the “around 5%” goal used in the past three years.

The introduction of a target range rather than a single figure signals a more flexible policy approach. By allowing growth to fluctuate between 4.5% and 5%, policymakers are granting themselves greater room to manage domestic challenges without the pressure of hitting a rigid numerical target.

Those challenges remain significant. China’s economy continues to grapple with a prolonged property sector downturn, persistent industrial overcapacity, and uneven domestic demand. Against that backdrop, the leadership appears increasingly focused on stability rather than aggressive expansion.

The new target also highlights Beijing’s strategic shift toward “high-quality” growth. Instead of pursuing rapid expansion through debt-fueled infrastructure or property stimulus, policymakers are emphasizing technology development, advanced manufacturing, and consumption as the core engines of growth.

Other policy targets announced in the report reinforce this balanced approach. Inflation is projected to run around 2%, reflecting authorities’ efforts to guard against deflation risks. The unemployment rate is expected to remain below 5.5%, while the fiscal deficit is set at 4% of GDP, suggesting a somewhat more proactive fiscal stance to support economic activity.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 156.64; (P) 157.26; (R1) 157.65; More...

USD/JPY recovered ahead of 55 4H EMA, but stays below 157.96 temporary top so far. Intraday bias stays neutral first. On the upside, above 157.96 will extend the rebound from 152.25 to retest 159.44 high. On the downside, though, break of 155.52 will bring deeper fall back to 152.07/152.25 support zone. Overall, price actions from 159.44 are viewed as a near term consolidation pattern. Outlook will remain bullish as long as 38.2% retracement of 139.87 to 159.44 at 151.96 holds.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.16) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

US initial jobless claims were unchanged at 213k in the week ending February 28, slightly below expectation of 215k. Four-week moving average of initial claims fell -5k to 215k.

Continuing claims rose 46k to 1,868k in the week ending February 21. Four-week moving average of continuing claims rose 7k to 1,852k.

Full US jobless claims release here.

The account of the February policy meeting of the ECB revealed a broadly stable but "fragile" outlook for the Eurozone economy. Policymakers maintained that growth remained resilient and inflation was still projected to hover around the 2% target, but emphasized that "significant risks and uncertainties" continued to cloud the outlook.

Members stressed the need to monitor not only major risks but also “subtle trends” that could gradually derail the projected inflation path. Particular attention will be paid to wage dynamics and services inflation, which remain key gauges of underlying price pressures. The upcoming March staff projections are expected to provide further clarity, especially following recent "downward surprises" in both inflation data and growth momentum.

Financial conditions and external developments were also highlighted as important factors. Policymakers said bank lending conditions, exchange rate movements, trade diversion effects, and consumption trends will all need to be closely watched to assess the "risks of a more pronounced or prolonged undershooting of the inflation target."

Against this backdrop, the accounts suggested that interest rates could "remain at their current levels for an extended period" if incoming data does not significantly alter the baseline outlook. While the near-term dip in inflation has long been anticipated, some members warned that risks are increasingly tilted to the downside, reinforcing the need for vigilance to prevent a sustained undershooting of the ECB’s inflation target.

Full ECB meeting accounts here.