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WTI oil price firmed on Monday and broke through psychological $70 barrier, where bulls were repeatedly capped last week.

The price action moved within narrow consolidation in past few days, signaling that larger bulls remain firmly in play for final break higher.

Mild initial market reaction on latest threats from President Trump about imposing secondary tariffs on buyers of Russian oil signaled that traders need more evidence of such action and also remained in wait and see mode over the US threats of military attack on Iran.

However, the sentiment remains firmly bullish, as the latest acceleration contributes to scenario of firm break of $70.00 and $70.62 (Fibo 38.2% of $79.35/$65.22 / 100DMA), to generate signal of continuation of bull-leg from $65.22 (2025 low, posted on Mar 5).

Daily studies are still mixed, but bullishly aligned that fuels hopes of stronger upside acceleration (on sustained break above $70.00/62 pivots) as fundamentals are becoming more favorable, although the news on Russia and Iran still need a confirmation.

Firm break of $70.62 to unmask targets at $72.28 (50% retracement) and $72.60 (200DMA), with close above $70 required to keep fresh bulls in play.

Res: 70.98; 71.24; 72.00; 72.28
Sup: 70.20; 70.00; 69.05; 68.55

Markets

The first quarter of the year ends completely different than how it started. US president Trump’s pro-growth policy agenda generated a lot of market optimism all the way through January-February. Then things started unravelling fast. Concerns grew over the US administration’s isolationist-protectionist stance, geopolitically and economically, while inconsistent communication & seemingly haphazard decision-making sows confusion and paralysis. Trump’s upcoming “Liberation Day”, during which he’ll unveil reciprocal (or universal after all?!) tariffs, serves as a case in point. His initial goal of slapping individual countries with tariffs to match the one they charge the US has been up for revision numerous times. Markets can only hope for a clearcut announcement instead of vague threats that keep uncertainty highly elevated. We’ve seen nervousness picking up by mid last week ahead of April 2 and the start of the new one is no different. Stocks in Europe decline with Germany’s DAX underperforming regional peers (-1.9%). Wall Street’s downward momentum simply goes on. The Nasdaq slides another 2.3% on top of the 2.7% last Friday. Core bonds are rallying with US Treasuries outperforming German Bunds. Safe haven flows to the world’s most liquid asset help explain this outperformance but it’s as least as much driven out of growing US recessionary concerns. US rates drop between 4.5-5.8 bps across the curve. Money markets price in more than three rate cuts this year, bypassing the Fed’s dot plot that penciled in two. German yields ease 2.1 to 4.1 bps but are off the intraday lows. The 10-yr benchmark tested and then bounced of the 2.66% area (March 5 defense-announcement related gap). Bunds underperform vs swap. The scarce economic data available for today included German March inflation numbers but obviously had zero market impact, if only because they came in close to expectations (0.4% m/m and 2.3% y/y). The dollar’s lackluster performance given the sizeable risk-off is telling (of a US recessionary risk premium). EUR/USD holds steady north of 1.08, the trade-weighted dollar index briefly fell through the 104 handle before paring losses. The Japanese yen is today’s star performer although didn’t capitalize the strong Asian momentum. USD/JPY hit a low of 148.7 but is now trading around 149.5. Oil prices eke out a gain that brings a barrel of Brent to its highest since end-February ($74.3/b). Trump threatened to impose secondary tariffs on buyers of Russian oil, reportedly over grievances against Russian president Putin violating the US brokered ceasefire agreement. The perhaps biggest beneficiary of all the uncertainty sloshing around in markets these days is gold. The precious metal sharply rose over the last couple days with a new record high today at $3120/ounce (+1.2%).

News & Views

Polish March CPI rose by 0.1% M/M and 4.9% Y/Y, unchanged from February and vs 5.1% expected, Poland Statistics reported today. In a monthly perspective the price of electricity and gas fell by -0.1% (still +13.3% Y/Y) and fuel prices by 2.0% M/M (-4.7% Y/Y). Food prices increased 0.3% M/M to be 6.7% higher Y/Y. The inflation reading was also below the estimate of the March inflation report of the National Bank of Poland as it assumed inflation on average at 5.4% in Q1. The data probably will further revive the internal rate cut debate within the MPC. Governor Glapinski and the hawkish wing within the MPC recently held the view that there is no room to cut the policy rate (5.75%) anytime soon. A reduction at this week’s meeting is not expected, but today’s data support the case of the doves within the MPC that pieces are falling into place for some easing of policy restriction e.g. in summer.

Data from the Hungarian Statistical Office today showed that gross wages in the country eased less than expected in January. Gross wages were reported at 10.4% down from 11.3% in December, but a slowdown below 10% was expected. Real earnings were 4.6% higher than a year earlier, considering inflation at 5.5%. The data suggest that alongside considerations financial stability, there is still little reason for the National Bank of Hungary to resume its easing cycle anytime soon. The MNB last week keep its policy rate unchanged at 6.5%. The forint recently briefly strengthened below EUR/HUF 400, but over the previous days ceded some ground, amongst others on the announcement that investment funds need to invest a higher proportion of their assets in Hungarian government bonds. Today, the Finance Ministry also downwardly revised its 2025 growth forecast to 2.5% from 3.4% previously.

Daily Pivots: (S1) 1.0782; (P) 1.0813; (R1) 1.0862; More...

No change in EUR/USD's outlook and intraday bias stays neutral. On the upside, break of 1.0857 resistance will indicate that correction from 1.0963 has completed already. Retest of 1.0953 should be seen first. Firm break there will resume the rally from 1.0176 towards 1.1274 key resistance. In any case, outlook will remain bullish as long as 38.2% retracement of 1.0358 to 1.0953 at 1.0726 holds.

In the bigger picture, prior strong break of 55 W EMA (now at 1.0692) suggests that fall from 1.1274 (2024 high) has completed as a three wave correction to 1.0176. Rise from 0.9534 is still intact, and might be ready to resume. Decisive break of 1.1274 will target 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. Also, that will send EUR/USD through a multi-decade channel resistance will carries larger bullish implication. This will now be the favored case as long as 1.0531 resistance turned support holds.

Daily Pivots: (S1) 1.2922; (P) 1.2945; (R1) 1.2968; More...

GBP/USD is staying in consolidation below 1.3013 and intraday bias stays neutral. On the downside, below 1.2869 will bring deeper correction. But downside should be contained above 38.2% retracement of 1.2248 to 1.3013 at 1.2721. On the upside, break of 1.3013 will resume the rally from 1.2099 towards 1.3433 high.

In the bigger picture, up trend from 1.3051 (2022 low) is not completed. Resumption is expected after corrective pattern from 1.3433 completes. Next target will be 1.4248 key resistance (2021 high). This will now remain the favored case as long as 1.2099 support holds.

Daily Pivots: (S1) 0.8794; (P) 0.8814; (R1) 0.8829; More…

Intraday bias in USD/CHF remains neutral as consolidations from 0.8757 is still extending. In case of stronger recovery, upside should be limited by 0.8911 support turned resistance. On the downside, break of 0.8757 will resume the fall from 0.9200 to 61.8% retracement of 0.8374 to 0.9200 at 0.8690. Sustained break there will pave the way back to 0.8374 support.

In the bigger picture, rejection by 0.9223 key resistance keep medium term outlook bearish. That is, larger fall from 1.0342 (2017 high) is not completed yet. Firm break of 0.8332 (2023 low) will confirm down trend resumption.

Daily Pivots: (S1) 149.26; (P) 150.23; (R1) 150.79; More...

Intraday bias in USD/JPY remains on the downside for the moment. Corrective recovery from 146.52 should have completed at 151.20. Deeper fall should be seen to retest 146.52 low next. Firm break there will resume whole decline from 158.86 towards 139.57 support next. For now, outlook will remain bearish as long as 151.23/9 holds in case of recovery.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 1.7146; (P) 1.7189; (R1) 1.7273; More...

EUR/AUD's rally accelerates today and break of 1.7270 resistance indicates that correction from 1.7417 has already completed at 1.7047. Intraday bias is back on the upside for 1.7417. Form break there will resume larger up trend, and target 61.8% projection of 1.6355 to 1.7417 from 1.7047 at 1.7703. For now, risk will stay on the upside as long as 1.7047 support holds, in case of retreat.

In the bigger picture, up trend from 1.4281 (2022 low) is resuming and should target 61.8% projection of 1.4281 to 1.7062 from 1.5963 at 1.7682, which is also close to 61.8% retracement of 1.9799 (2020 high) to 1.4281 at 1.7691. For now, this will remain the favored case as long as 1.6800 resistance turned support holds, even in case of deep pullback.

Daily Pivots: (S1) 0.6275; (P) 0.6293; (R1) 0.6306; More...

Intraday bias in AUD/USD is back on the downside with break of 0.6257 support. Fall from 0.6390 should now target 0.6186 next. Firm break there e will indicate that corrective pattern from 0.6087 has completed and larger fall from 0.6941 is ready to resume. For now, risk will stay on the downside as long as 0.6329 resistance holds, in case of recovery.

In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6467) holds.

Risk aversion is sweeping through global financial markets today, with equities across Asia and Europe plunging ahead of the US's so-called tariff “Liberation Day” on April 2. The selloff began in Asia, and continued through European Session. US futures are also pointing sharply lower, with the tech-heavy NASDAQ bearing the brunt of the pressure. Meanwhile, Gold continues to surge, with prices pushing above 3120 and showing no signs of slowing.

Currency markets reflect the prevailing risk-off tone, with Yen leading gains as investors seek refuge. Dollar and Sterling are also relatively firm. Aussie, Kiwi and Loonie are the weakest performers. Euro and Swiss Franc are trading mixed in the middle.

Australia’s RBA decision tomorrow will be in focus, though it's unlikely to trigger fireworks. The central bank is widely expected to keep rates on hold at 4.10%, emphasizing its vigilance on inflation while pushing back on expectations for a rapid easing cycle.

The big four banks are split on the path forward. CBA, Westpac, and NAB anticipate three more RBA cuts this year starting in May, subject to Australia's Q1 CPI report due April 2. ANZ, on the other hand, sees just one more cut in August, which would leave the cash rate at 3.85%.

Technically, Nikkei broke through 35987.13 to resume the decline from 40398.23. The development affirms that case that corrective pattern from 42426.77 (2024 high) is already in its third leg. Firm break of 61.8% projection of 40398.23 to 35987.13 from 38220.69 at 35494.62 could prompt downside acceleration to 100% projection at 33809.58. If realized, the next fall in Nikkei would likely be accompanied by another down leg in USD/JPY.

In Europe, at the time of writing, FTSE is down -1.26%. DAX is down -1.73%. CAC is down -1.71%. UK 10-year yield is down -0.051 at 4.660. Germany 10-year yield is down -0.04 at 2.695. Earlier in Asia, Nikkei fell -4.05%. Hong Kong HSI fell -1.31%. China Shanghai SSE fell -0.46%. Singapore Strait Times fell -0.23%. Japan 10-year JGB yield fell -0.066 to 1.488.

ECB Lagarde: Europe must march toward economic independence amid tariff threats

ECB President Christine Lagarde emphasized the need for Europe to assert more control over its economic future in light of looming US tariffs, set to begin on April 2.

In a France Inter radio interview, Lagarde reframed the narrative around “Liberation Day,” saying that while the US sees it as a move toward sovereignty, Europe must seize it as an inflection point—“a march toward independence.”

Lagarde reiterated her previous estimates that tariffs from the US could shave around 0.3% off Eurozone growth in the first year. Should Europe retaliate with reciprocal measures, the negative impact could deepen to as much as 0.5%.

On inflation, Lagarde noted that keeping it in check remains a “constant battle.” She stressed that while some progress has been made, inflation needs to fall in a sustainable way. That, she said, requires a carefully calibrated interest rate policy.

ECB’s Panetta: Uncertainty demands caution on rate cuts

Italian ECB Governing Council member Fabio Panetta warned that the battle against inflation "cannot yet be said to be over." and urged caution in the timing of interest rate cuts.

In a speech today, Panetta pointed to the heightened uncertainty stemming from “contradictory” announcements on US trade policy, suggesting that such unpredictability complicates the ECB’s path forward. As a result, the central bank must continue to monitor "all the factors that could hinder the return to the 2% target"

Panetta emphasized the balancing act the ECB now faces. On one hand, subdued consumption and investment, driven by geopolitical tensions and weak Eurozone growth, are helping to ease inflationary pressures.

But on the other hand, the resurgence of uncertainty—particularly around US tariffs—means the ECB must remain vigilant and not rush into policy loosening.

Japan's industrial production beats with 2.5% mom growth in Feb

Japan's industrial production rose 2.5% mom in February, beating market expectations of 1.9% mom gain. The strong growth was driven by key tech-related sectors, with chipmaking machinery output jumping 8.2% and electronic parts and devices surging 10.1%.

A survey by Ministry of Economy, Trade and Industry projects continued, albeit modest, gains in output of 0.6% mom in March and 0.1% mom in April.

While the headline data is encouraging, the METI acknowledged that the outlook could quickly shift. Though no direct production impact from the proposed US tariffs has been reported yet, METI emphasized the need to monitor the situation more closely going forward.

On the consumer side, retail sales grew just 1.4% yoy, missing expectations of a 2.4% rise.

NZ ANZ business confidence dips to 57.5, rising inflation expectations stir doubts over RBNZ cuts

New Zealand’s ANZ Business Confidence dipped slightly from 58.4 to 57.5 in March. Own Activity Outlook improved from 45.1 to 48.6.

However, the data also brought a clear warning on inflationary pressures. Cost expectations surged from 71.3 to 74.1, the highest level in a year. Pricing intentions climbed from 46.2 to 51.3, marking the strongest since May 2023.

Perhaps more importantly, one-year inflation expectations also ticked up from 2.53% to 2.63%, inching further above the RBNZ’s 2% midpoint target.

ANZ flagged the rising inflation signals as “a little disconcerting,” cautioning that these developments could influence how enthusiastic RBNZ will be about delivering further rate cuts.

A rate cut at the April meeting appears locked in, and a second in May is viewed as likely. However, ANZ noted that the odds of a third cut in July are now “more of a coin toss.”

China’s official PMI manufacturing rises to 50.5, but labor market lags

China’s official PMI data for March offered modest optimism, with the manufacturing index rising from 50.2 to 50.5, matching expectations and marking its highest level in a year.

Sub-indices for production and new orders both improved to 52.6 and 51.8, respectively. However, employment index slipped to 48.2, highlighting persistent weakness in labor market conditions within the manufacturing sector.

Non-manufacturing activity also improved slightly, with the PMI climbing from 50.4 to 50.8, beating expectations of 50.5.

Still, employment in the non-manufacturing sector deteriorated, with the index falling to 45.8, as both the services and construction sectors shed workers.

AUD/USD Mid-Day Report

Daily Pivots: (S1) 0.6275; (P) 0.6293; (R1) 0.6306; More...

Intraday bias in AUD/USD is back on the downside with break of 0.6257 support. Fall from 0.6390 should now target 0.6186 next. Firm break there e will indicate that corrective pattern from 0.6087 has completed and larger fall from 0.6941 is ready to resume. For now, risk will stay on the downside as long as 0.6329 resistance holds, in case of recovery.

In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6467) holds.