Sample Category Title

• Interest Rate Outlook: Markets price the Official Cash Rate (OCR) above 3%, but risks suggest lower rates may be needed due to spare economic capacity.
• Economic Growth: Q4 GDP growth of 0.7% exceeded expectations but included one-off factors unlikely to persist.
• Inflation Risks: With high spare capacity (~ -1.5% output gap), disinflation remains a concern, increasing the risk of rates undershooting market expectations.

Fundamental Factors Affecting NZD

1. Growth Outlook: While NZ is technically out of recession, the underlying recovery remains weak, with low consumption growth (0.1%) and a declining residential investment sector.
2. Labour Market & Inflation: Unemployment has yet to peak, and inflation is close to target, meaning the RBNZ may need to keep rates neutral for longer or even cut below 3%.
3. Housing Market: 44% of mortgages are fixed for six months or less, meaning homeowners may benefit from lower fixed rates. However, it is unclear whether rising unemployment will boost spending.
4. External Factors: Higher commodity prices support exports, but global trade tariffs could slow growth.
5. Political & Policy Uncertainty:

• RBNZ forecasts above-trend growth (2.6%)—which may be optimistic given trade risks.
• Political uncertainty, including the departure of RBNZ Governor Adrian Orr, adds to volatility.

Key Takeaway for Traders

• NZD downside risks remain as economic slack persists, and rate cuts below 3% are possible.
• Watch for inflation undershooting in the coming months. If confirmed, the RBNZ may need a longer period of neutral or lower rates, pressuring the NZD.
• Housing stabilization and strong exports could provide limited upside, but overall growth is unlikely to remove spare capacity quickly.

EURNZD – H4 Timeframe

Following the bearish break of structure on the 4-hour timeframe chart of EURNZD, the Fibonacci retracement tool was plotted, with levels 61% to 88% being the significant areas of focus. The subsequent retracement is approaching the supply zone that overlaps the 61.8% retracement level after having swept liquidity from the previous internal structure, leading to a bearish sentiment.

EURNZD – H2 Timeframe

The price action on EURNZD's 2-hour timeframe chart validates the 4-hour timeframe sentiment by revealing the FVG (Fair Value Gap) that the price is expected to fill before being rejected from the supply zone.

Analyst's Expectations:

• Direction: Bearish
• Target- 1.84964
• Invalidation- 1.91228

UK delivered a mixed set of PMI readings in March, with services providing a welcome surprise as the index rose from 51.0 to 53.2, a 7-month high. PMI Composite also improved from 50.5 to 52.0, suggesting modest expansion. However, the picture was clouded by a sharp deterioration in manufacturing, where the index slumped from 46.9 to 44.6 — its lowest level in 18 months.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, cautioned against over-optimism, noting that “one good PMI doesn’t signal a recovery.”

The data points to the economy barely expanding, with GDP growth tracking around 0.1% for the quarter. Employment continues to be trimmed as firms remain wary of rising costs and an uncertain economic outlook, with business confidence still hovering near January’s two-year low.

Looking ahead, challenges appear to be mounting. Businesses are bracing for higher National Insurance contributions starting in Apri. Additionally, the anticipated unveiling of US tariff policy on April 2 adds another uncertainty.

Full UK PMI flash release here.

Eurozone PMI data for March offered fresh signs of economic stabilization, with Composite index rising to a 7-month high of 50.4, supported by a notable rebound in manufacturing. The PMI Manufacturing rose from 47.6 to 48.7, its highest level in 26 months. Manufacturing output crossed into expansion territory at 50.7, a 34-month high. Services PMI slipped slightly from 50.6 to 50.4, but remained in growth territory.

Cyrus de la Rubia of Hamburg Commercial Bank noted the possibility that "temporary tariff-related import boom" could be inflating manufacturing figures. But he also expressed optimism that with, Europe’s investment drive in defense and infrastructure, "hope for a more sustained recovery seems well founded".

Encouragingly for ECB, pricing pressures in the services sector are easing, with both input costs and output prices decelerating. In manufacturing, price pressures remain moderate as well, helped by falling energy costs.

However, risks remain. Potential retaliation tariffs from the US, trade tensions with China, and higher food prices caused by extreme weather events are all sources of uncertainty that could cloud the outlook and "make some ECB members hesitant to cut rates too aggressively."

Full Eurozone PMI flash release here.

As seen on the XBR/USD chart, Brent crude oil prices are hovering near last week’s highs this morning as market participants assess various influencing factors, including:

→ New U.S. sanctions on Iran, which are limiting its export capacity and tightening global supply, particularly to China.

→ Ongoing negotiations between the U.S., Ukraine, and Russia in Saudi Arabia, which could potentially lead to increased Russian oil exports.

→ OPEC+ plans to raise oil production starting in April.

Technical Analysis of XBR/USD

From a technical perspective, Brent crude oil is trading near a key resistance zone, which consists of:

→ A bearish Fair Value Gap (highlighted in purple).

→ The upper boundary of the descending channel.

→ The upper boundary of a narrowing triangle (shown in black), which can be interpreted as a Rising Wedge pattern.

The Rising Wedge may represent a corrective rebound within a broader bearish trend. If buyers fail to break through this resistance zone, Brent crude prices could resume their downtrend within the red channel.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

ECB Executive Board member Piero Cipollone struck a dovish tone in an interview with Expansión, signaling that recent developments have reinforced the case for further interest rate cuts.

Cipollone noted that at the time of the March meeting, ECB projections already showed inflation converging to the 2% target by early 2026—even under a rate path that included market expectations of cuts below 2%.

Since then, "not only has this narrative been confirmed, but key issues have arisen that have strengthened the arguments in favour of continuing to lower rates", he added.

Cipollone noted that energy price pressures have already begun to reverse. Meanwhile, Euro appreciation and higher real interest rates are working in tandem to cool price growth.

If US tariffs on European goods materialize, that would have a "negative impact on demand", which would "further strengthen the downward trend in inflation". Similarly, escalating U.S.-China trade conflict may push Chinese goods into Europe, adding to price suppression across the bloc.

Notably, Cipollone suggested that inflation could reach target even sooner than the ECB’s latest projections anticipate.

Full interview of ECB's Cipollone here.

Gold price rallied further and traded to a new all-time high. Crude oil is attempting a recovery wave but upsides could be limited.

Important Takeaways for Gold and WTI Crude Oil Prices Analysis Today

• Gold price started a steady increase above the $3,000 zone against the US Dollar.
• A connecting bearish trend line is forming with resistance at $3,028 on the hourly chart of gold at FXOpen.
• WTI Crude oil prices started a recovery wave from the $66.00 support zone.
•  There is a key bullish trend line forming with support at $67.50 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price found support near the $2,950 zone. The price remained in a bullish zone and started a strong increase above $2,980.

There was a decent move above the 50-hour simple moving average and $3,000. The bulls pushed the price above the $3,015 and $3,030 resistance levels. Finally, the price climbed as high as $3,057 before there was a pullback.

The price tested the $3,000 zone and is currently rising. There was a move above the 23.6% Fib retracement level of the downside correction from the $3,057 swing high to the $2,999 low, and the RSI is stable above 40.

Immediate resistance is near the $3,028 level and the 50% Fib retracement level of the downside correction from the $3,057 swing high to the $2,999 low. There is also a connecting bearish trend line forming with resistance at $3,028.

The next major resistance is near the $3,035 level. An upside break above the $3,035 resistance could send Gold price toward $3,058. Any more gains may perhaps set the pace for an increase toward the $3,080 level.

Initial support on the downside is near the $3,012 level. The first major support is near the $3,000 zone. If there is a downside break below the $3,000 support, the price might decline further.

In the stated case, the price might drop toward the $2,980 zone. Any more losses might push the price toward the $2,965 level.

WTI Crude Oil Price Technical Analysis

On the hourly chart of WTI Crude Oil at FXOpen, the price remained in a bearish zone below the $70.00 level against the US Dollar. The price started a fresh decline below the $68.00 support.

The price even dipped below the $67.50 level and the 50-hour simple moving average. Finally, the bulls appeared near $66.00 and the price started a recovery wave. The price recovered above $67.50 and tested the $68.50 zone.

The price is now consolidating gains below the 23.6% Fib retracement level of the upward move from the $66.54 swing low to the $68.48 high. There is also a key bullish trend line forming with support at $67.50.

If there is a fresh increase, it could face resistance near the $68.30 level. The first major resistance is near the $68.50 level. Any more gains might send the price toward the $69.20 level.

The main resistance could be near the $70.00 level. Conversely, the price might continue to move down and revisit the $67.50 support and the 50% Fib retracement level of the upward move from the $66.54 swing low to the $68.48 high. The next major support on the WTI crude oil chart is $67.00.

If there is a downside break, the price might decline toward $66.55. Any more losses may perhaps open the doors for a move toward the $66.10 support zone.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Markets

US and European bond markets on Friday were captured in technical trading, pondering the recent repositioning. US yields mid last week corrected lower after Fed Chair Powell tried to send some kind of comforting message alongside a dots projection basically pointing to growing stagflationary risks (higher inflation and lower growth this year). Question remains whether this benign neglect from Powell assuming temporary inflationary impact of tariffs should comfort bond investors. The setback in US yields soon found support. In a steepening move, US yields changed between -1.5 bps (2-y) and +3.3 bps (30-y). German/EMU yields also entered mild correction after the sharp jump in yields in the wake the fiscal U-turn in Germany and the Re-arm Europe initiative early this month. The changes to the German constitutional debt break where approved last week. Markets are now in the process of assessing how/how fast this might filter through into the real economy. The German curve on Friday also mildly steepened with the short end declining (2-y -3.9 bps) while the 30-y added 0.9 bps. After recent European outperformance, US equities also slightly outperformed Europe with the Nasdaq rising 0.52% compared to the EuroStoxx 50 ceding 0.5%. This relative (short-term) repositioning was also visible in FX markets. DXY closed at 104.1, off the correction lows near 103.2 registered earlier last week. EUR/USD also eased further to finish the week at 1.082, to be compared to a correction top near 1.095 set on Tuesday.

Asian equity markets mostly trade slightly lower to little changed. US futures show further gains. Investors apparently are drawing some comfort from comments (including on Bloomberg) referring to US officials that the ‘reciprocal tariffs’ to be imposed on April 2 might be more targeted/more limited in scope that initially planned. US yields are gaining about 3 bps across the curve this morning. The dollar eases marginally in this tentative risk-on. (DXY 104.0; EUR/USD 1.084). The yen underperforms after weaker than expected March PMI’s (cf infra). Later today, the focus turns to the EMU and US PMI’s. For the EMU PMI’s, question is how fast the fiscal U-turn in the region will translate into higher demand for European products and services. At least it should help the forward looking expectations assessment. Even so, the bar from consensus expectations (EMU composite expected at 51.1 from 50.4) isn’t that high. Assuming an ongoing assessment on sticky costs and prices, the PMI’s should help to put a floor under the recent correction in EMU yields. The EMU 2-y swap yield at 2.25% is already close to what might turn out the bottom of the ECB easing cycle. The EMU 10-y swap yield (currently 2.665%) might find support at the January top (2.625%). A decent solid PMI also might help to put a floor for the euro (EUR/USD correction). For US PMI’s markets might look out to what extent they confirm the stagflationary narrative. If so, we also expect it to help putting a floor for US yields, especially at a the short end of the curve.

News & Views

Japanese PMIs retreated in contraction territory in March with the composite indicator signaling falling private sector activity (48.5) for the first time since October. This was partly due to a fresh fall in services (49.5). Manufacturing output continued to fall, at the fastest pace for a year (48.5). Composite new orders fell slightly amid notably slowing business for services companies and orders falling solidly in manufacturing. Firms noted that strong inflationary pressures had dampened sales and made some customers hesitant. This won’t change soon with the PMIs signaling elevated cost pressures. Sharply rising input costs translated into higher selling prices. Optimism about the future dipped to the lowest since August 2020. “Strong inflation, coupled with concerns over labour shortages, an ageing population, subdued client spending and increased uncertainty over the international trade environment dampened optimism around the outlook.” The Japanese yen faces some moderate selling pressure this morning. USD/JPY is testing the 150 figure, EUR/JPY moves beyond 162. Japanese yields continue to move north (1-2 bps rise across the curve), eying the inflationary message of the PMIs.

France joined a currently still small group of member states that what the EU to use its anti-coercion tool against the US if president Trump uses tariffs in an unfairly manner which push the bloc into policy changes. The instrument is the EU’s most powerful retaliatory measure which includes amongst others restrictions on trade and services as well as on certain intellectual property rights. But most officials from the European Commission do not want to commit to this “measure of last resort” just yet, at least not until it is clear what April 2 will bring. Trump is then expected to announce reciprocal tariffs but the scope is unclear and still under discussion. The EC recently postponed retaliatory responses to the US metal tariffs to mid-April to allow for negotiations.

US equities saw a precious support from the Federal Reserve (Fed) last week, as policymakers decided to downplay the impact of tariffs on inflation by saying that it would be ‘transitory’ and slowed the pace of QT. As such, the S&P500 closed last week 0.51% higher avoiding further losses into the correction zone despite gloomy outlook from FedEx, Micron Technology and Nike. Nasdaq gained some 0.25% over the week, the Dow Jones rebounded from the 50-week moving average to close the week 1.20% higher, small and mic-cap stocks also recovered. Across the Atlantic, Thursday and Friday were not cheery, as some investors decided to take profit after the German government passed a bill to expand infrastructure and security spending by boosting debt, and before the US tariffs are due to become effective from April 2nd. The Chinese equities, on the other hand, gave back some of the government-stimulus-boosted gains.

This is were we are right now. The week will probably be heavy with tariff talk. The early-week echoes are positive with rumours that the upcoming tariffs would be more measures than previously thought. But, who knows?

PMI numbers

Investors will be watching the March preliminary PMI numbers today. The contraction in Japan’s manufacturing PMI showed an unexpected acceleration of the contraction in the manufacturing activity in early March. Australian figures showed faster expansion in both services and manufacturing. The European figures could confirm an improved set of numbers, as well, due to the positive impact of massive government spending on overall mood across the old continent, while the US numbers are under the threat of a sharp fall in US growth expectations. The latest US GDP update is due Thursday and is expected confirm a slowdown in US economic growth from 3.1% to 2.3 in Q4. Atlanta Fed’s GDPNow Forecast has improved last week but still points at around 1.8% contraction in Q1 of this year.

The US dollar is softer this morning after a three-session rebound that let the major currencies like the euro and sterling take a breather after an impressive rally since the beginning of the year. But – unlike the expectations that the US tariffs would send the euro to parity against the greenback – the outlook for the euro is now positive on improved growth expectations due to the spending boost, and sterling is also challenging the 1.30 mark. But gains in sterling are vulnerable ahead of this week’s budget statement that will confirm that Rachel Reeves is left with less than £10bn of budget headroom to boost growth – meaning that either she will hint at higher taxes or less spending. Both are negative for growth. And in an environment of increased focus on growth expectations from the FX traders, sterling may struggle to clear the 1.30 offers, even against a globally weakened US dollar.

In commodities, gold is in a good position to benefit from tariff shenanigans, while oil remains under the pressure of weak – and weakening – global growth expectations.

CoreWeave IPO

CoreWeave, an Nvidia-backed cloud computing company specialized in GPU infrastructure for AI, will go public on the Nasdaq this week. The IPO pricing is scheduled for Wednesday, the company is expected to start trading on Thursday under the ticker CRWV. The company is expected to offer 49 mio shares priced between $47 and $55 a share, and raise up to $2.7bn. The company announced a net loss of more than $800mio in 2024 but their revenue reached $1.92bn and they secured a 5-year contract worth nearly $12bn with OpenAI and count Microsoft among their big clients. The problem is, it has a handful of big clients and a lot of debt to repay, and the AI craze has been losing momentum since the beginning of the year. The CoreWeave IPO will be an interesting barometer on how excited the tech investors still are despite a more than 20% pullback in Magnificent 7 stocks since the December peak. Nvidia lost up to 30% since its January ATH following an almost 1000% rally between 2023 and the end of the 2024. A set of strong earnings and robust forecast, the announcement of a chip that’s even faster than Blackwell – the next generation chip that started selling a few months ago – and partnerships with companies that are not necessarily in the technology sector couldn’t help reverse losses. Investors flocked into the Chinese tech stocks instead on realization that it’s possible to build AI models on cheaper chips and Chinese-made chips. This week, all eyes are on the Chinese Boao Forum – the Chinese version of Davos – where Xi Jinping will meet with the foreign company CEOs in an effort to strengthen investor confidence to keep the positive momentum going.

In focus today

In the euro area, we receive the flash PMI data for March, which will be crucial for the ECB's rate decision in April. We anticipate the composite PMI to rise from 50.2 to 50.6, driven by continued normalisation in the manufacturing sector. The PMIs have shown a reasonable correlation with the ZEW index, which increased in March. We expect the manufacturing PMI to rise to 48.4 from 47.6 in February, while activity in the services sector is likely to remain broadly unchanged, with the services PMI at 50.6, like February.

In the US, March Flash PMIs will also be released. Some regional leading indicators have pointed towards a downtick in the manufacturing cycle after a promising recovery over the winter.

In China, PBOC will set the policy rate overnight, the 1-year Medium-Term Lending Facility rate. We expect it to be unchanged again as we believe the central bank will continue to be sidelined for now until we move closer to another Fed cut. PBOC aims for a stable USD/CNY and thus now tends to move in tandem with Fed rate changes while using other instruments to support the economy, such as specific lending schemes for different sectors.

The US data calendar for the remainder of the week is fairly light, with the Conference Board's consumer confidence on Tuesday and the Fed's preferred measure of inflation, PCE, on Friday. In the euro area, monetary aggregates and credit data is released on Thursday, while we get March inflation data from Spain and France on Friday. In the UK, Chancellor Reeves will present the Spring Statement, and finally Norges Bank will announce their rate decision on Thursday.

Economic and market news

What happened overnight

In Japan, March PMIs were lower across the board, with all indices creeping below the 50-threshold. The manufacturing measure stood at 48.3, recording the lowest reading in a year, while the services counterpart slipped to 49.5. The composite measure fell to its lowest level since August 2020 at 48.5, with firms stating concerns over rising costs, labour shortages and the global trade environment.

BoJ Governor Ueda emphasized that the BoJ will proceed to raise interest rates if the underlying inflation target is likely to meet the 2% target, despite potential losses on its government bond holdings. We forecast the BoJ to deliver two additional 25bp rate hikes this year, with the next likely in July.
What happened over the weekend

In the US, NY Fed's President Williams (hawk and voter) said on Friday that the US central bank's "Modestly restrictive" monetary policy is suitable amidst economic uncertainties - with Chicago Fed President Goolsbee (dove and voter) also sharing similar views. We still look for the next cut in June, followed by quarterly 25bp reductions until the terminal rate of 3.00-3.25% is reached in June of 2026. For more details, please see Research US - Fed review: Cautious stability, 19 March.

On Friday, President Trump called his 2 April reciprocal tariffs "the big one" but signalled there will be flexibility. At the beginning of his term, Trump ordered a comprehensive study into unfair trade practices by other countries, and the results are set to be finished by 1 April. The findings will guide the reciprocal tariffs that will be implemented on a country-by-country basis. Currently the uncertainty remains large about what they might look like; for instance, Trump has previously likened the EU's VATs to a tariff against US imports.

In the euro area, consumer confidence declined to -14.5 (cons: -13.0) from -13.6 in February. Consumer confidence is one of the tier-2 data points that feed into the ECB's decision in April, and the continued weak consumer confidence questions the uptick in private consumption that ECB expects to drive growth this year. Hence, in isolation it was a dovish signal. Following a large increase last year, consumer confidence has fallen in 2025 especially due to consumer's view on the general economic situation over the next 12 months while they are less negative about their personal financial situation.

Moreover, ECB's Stournaras was on the wire, stating that he still sees 2 more cuts in 2025 with a terminal rate of 2%. Importantly, Stournaras is one of the doves and the fact that he only expects rates to come down to 2% suggests that we might not get more than that.

In Germany, the upper house of parliament, the Bundesrat, passed the large fiscal spending bill. Hence, Germany has now changed their constitution to allow higher defence spending, created an EUR 500bn off-budget fund for infrastructure, and eased the regional state budgets. For our assessment of the implications of the package, please see Research Germany - Fiscal policy to boost growth but also inflation concerns, 19 March.

In Canada, PM Carney has called for a snap election on 28 April. It is expected to be a close race between Liberals (PM Carney) and the Conservatives. The Conservatives initially held a substantial lead, but recent political influence of Trump has significantly diminished their advantage.

In geopolitics, Ukrainian and US officials commenced discussions aimed at securing energy facilities and critical infrastructure in Saudi Arabia on Sunday. Despite optimism from the US, both Ukraine and Russia have reported overnight strikes, highlighting the fragile nature of the proposed 30-day ceasefire. According to Bloomberg, the US administration hopes to reach a broad ceasefire within weeks, with plans for a truce agreement by 20 April. For our perspective on the market impacts of a Ukraine deal, please see Research Global - What would a dirty deal in Ukraine mean for markets, 16 February.

Equities: Global equities ended slightly lower on Friday. More importantly, last week equities managed to halt the decline and ended higher for the week. In our opinion due to fewer tariff announcements. The centre of the storm, US tech, performed better, a trend that continued Friday. Additionally, the VIX index subsided and concluded the week below 20.

While we must wait for the message on new tariffs on 2 April, and it is too early to determine whether all the political turmoil has had a lasting negative effect on consumers and corporations, we can still conclude for the moment that no news is good news, for risky assets, which was essentially the message last week. In the US on Friday, Dow +0.1%, S&P 500 +0.1%, Nasdaq +0.5%, Russell 2000 -0.6%. This morning, Asian markets are mostly lower. Japanese markets have just turned positive despite a disappointing set of both manufacturing and service PMIs this morning. European and US futures are higher this morning, led by the US and growth/tech sectors.

FI&FX: The USD had a strong end to the week, posting a third consecutive day of strengthening with EUR/USD briefly trading below 1.08 before closing just above. Front-end UST yields traded a few bp lower, driving a slight steepening. Despite the USD support, both SEK and NOK showed strong performance with EUR/SEK below 11.00 and EUR/NOK at 11.40, leaving NOK/SEK above 0.96 once again. Last Friday, we published our monthly FX Forecast Update, where we maintain a bearish medium-term outlook for EUR/USD and continue to see headwinds for both the SEK and NOK.

Daily Pivots: (S1) 192.05; (P) 192.82; (R1) 193.62; More...

Intraday bias in GBP/JPY remains neutral for consolidations below 194.89. On the upside, above 194.89 will resume the rebound from 187.04 towards 198.94 resistance. On the downside, break of 190.71 will bring deeper fall back to 187.04 support. Overall, corrective pattern from 180.00 is still be extending.

In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction.