Sample Category Title

Chicago Fed President Austan Goolsbee struck a cautious but balanced tone in his latest remarks, saying Fed should "wait to see some of these things get cleared up" given the high degree of policy uncertainty.

Speaking to CNBC, he noted a shift in tone among business and civic leaders in recent weeks, highlighting growing "anxiety" and delayed capital spending decisions as companies weigh the impact of tariffs and other fiscal policy developments.

Despite the cautious near-term stance, Goolsbee reaffirmed his longer-term view that interest rates are likely to be lower 12 to 18 months from now.

While the Fed may not be in a rush to act immediately, he emphasized the importance of continued progress on inflation as a key condition for future easing.

Gold has been in an uptrend since the beginning of March, and the rally accelerated as gold hit new highs at the end of last week, when the spot price hit a new record of $3057. We see this breakout as the start of a new expansionary momentum with an upside potential of $3180/oz, which represents 161.8% of the upside momentum from the start of the year to the February peak.

The alternative view is also bullish. According to it, gold has completed a correction since the beginning of the year, following the rally from October 2023 to November 2024. The bulls are now targeting the level of $3400 an ounce. This seems like the bulls’ target for the coming months. However, we should not lose sight of the fact that the current rally in gold is accumulating extreme overbought conditions on both the daily and weekly timeframes.

This disposition leaves room for sharp rallies in the near term on a short squeeze, i.e. liquidation of short positions. However, the pause in growth may well be followed by a broad correction, which we will be sure to report on in the future.

Daily Pivots: (S1) 1.0806; (P) 1.0862; (R1) 1.0908; More...

No change in EUR/USD's outlook and intraday bias stays on the downside. Pull back from 1.0953 short term top would extend to 38.2% retracement of 1.0358 to 1.0953 at 1.0726. Strong support should be seen there to bring rebound. Meanwhile, break of 1.0953 will resume the rally from 1.0176 towards 1.1274 key resistance.

In the bigger picture, prior strong break of 55 W EMA (now at 1.0675) 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) 1.2930; (P) 1.2973; (R1) 1.3009; More...

No change in GBP/USD's outlook and intraday bias remains neutral. On the downside, firm break of 1.2910 support should confirm short term topping, on bearish divergence condition in 4H MACD. In this case, intraday bias will be back on the downside for near term channel support (now at 1.2780). On the upside, though, above 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. This will now remain the favored case as long as 1.2099 support holds.

Daily Pivots: (S1) 0.8768; (P) 0.8806; (R1) 0.8855; More…

Intraday bias in USD/CHF remains neutral as consolidations from 0.8757 is still extending. While stronger recovery cannot be ruled out, 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.

Retail sales declined by 0.6% month-on-month (m/m) in January, following December's outsized gain of 2.6% (previously reported as 2.5%). The result came in below the Statistics Canada's advanced estimate of 0.4%.

After adjusting for inflation, the volume of retail sales posted a sizeable decline of 1.1% m/m in January.

A big part of the weakness came from sales at motor vehicle and parts dealers, which dropped 2.6% m/m, reversing all of December's 1.8% gain. Ex-autos, sales rose 0.2% m/m, outperforming the consensus call for a 0.2% decline.

Receipts at gas stations and fuel vendors rose 3.2% m/m in nominal terms. This was largely due to higher prices, as volumes growth was negligible at just 0.1% m/m.

Excluding auto sales and receipts at gas stations, core retail sales declined 0.2% m/m in January. The weakness was driven primarily by a 2.5% drop in food and beverage stores.

Gains in other categories – furniture and home furnishings stores (+3.9% m/m), building material & garden equipment dealers (+1.6% m/m), health and personal care stores (+1.2% m/m), and general merchandise stores (+0.9% m/m) – were not enough to offset the losses.

E-commerce sales fell 0.9% m/m in January, following a 2.9% gain in December.

Statistics Canada's advanced estimate for February points to another decline in sales of 0.4% m/m.

Key Implications

Consumers tightened their belts to start the year with retail sales retreating more than expected in January after a strong showing in December. Since sales are reported in nominal terms, part of the decline may reflect a temporary drop in prices due to the HST/GST holiday. However, the pullback was even more pronounced in real terms.

Looking ahead, uncertainty looms. Our internal credit and debit card statistics points to a slight softening in spending through the first quarter, consistent with today's reading and the advance estimate for February. While there may be some stockpiling ahead of tariffs in March any boost would likely be short-lived. Consumers remain cautious and may restrain spending further until there is more clarity on the outlook for jobs, incomes and prices. We've penciled in a 2.7% (annualized) growth in consumer spending for Q1, and potentially a contraction in the following quarters (see QEF).

Daily Pivots: (S1) 148.32; (P) 148.64; (R1) 149.10; More...

Intraday bias in USD/JPY remains neutral and outlook is unchanged. Corrective pattern from 146.52 might extend. But in case of stronger recovery, upside should be limited by 150.92 support turned resistance. On the downside, firm break of 148.17 support will bring retest of 146.52 first. Sustained trading below 61.8% retracement of 139.57 to 158.86 at 146.32 will resume the fall from 158.86 to 139.57 support.

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.

Canadian Dollar weakened modestly in early US session following disappointing retail sales data. January’s figures showed a larger-than-contraction, and more importantly, an advance estimate points to another drop in February. This suggests consumer spending might be in a weakening trend, raising fresh concerns about Canada’s economic momentum heading into Q2.

However, the selloff in the Loonie has been relatively limited so far. BoC Governor Tiff Macklem’s comments from Thursday may have offered some cushion. Macklem warned against allowing initial price spikes from tariffs to morph into broader inflationary pressures, highlighting the need for vigilance in monetary policy. This has fueled market speculation that BoC may pause its rate cutting cycle in April to better assess tariff impacts and inflation risks.

Meanwhile, Euro is coming under some pressure along with Germany’s DAX index, despite a historic win for the country’s fiscal policy. Germany’s Bundesrat passed a major spending package aimed at reviving growth and bolstering defense. However, traders seem to be locking in profits after weeks of rallying on anticipation of this very outcome, suggesting the news may have been fully priced in.

For the week so far, Swiss Franc is now the top performer, followed by Kiwi and then Loonie. Aussie lags at the bottom, trailed by Euro and Yen. Dollar and Pound are stuck in the middle of the pack.

Canadian retail sales down -0.6% mom in Jan, more contraction in Feb

Canada’s retail sales dropped -0.6% mom to CAD 69.4B in January, marking a steeper-than-expected decline and signaling subdued consumer spending.

The largest drag came from motor vehicle and parts dealers, while overall sales fell in three of nine subsectors.

Core retail sales, which strip out gasoline and auto-related purchases, also slipped -0.2%.

Adding to the concern, Statistics Canada's advance estimate suggests retail sales fell another -0.4% in February.

Japan’s CPI core slows less than expected to 3% in Feb

Japan’s core consumer inflation eased for the first time in four months in February, but less than market expectations. While the data strengthens the case for another BoJ rate hike at the April 30–May 1 meeting, policymakers may still choose to wait until July to better assess the impact of US tariff escalation and broader global financial market risks.

CPI core (excluding fresh food) slowed from 3.2% yoy to 3.0% yoy, slightly above expectations of 2.9%. The moderation was partly due to the resumption of government subsidies on utility bills. Despite this, core inflation has stayed above BoJ’s 2% target since April 2022.

More significantly, core-core CPI (excluding food and energy) rose from 2.5% yoy to 2.6% yoy, marking the fastest pace since March 2024. This continued strength in underlying inflation, even as services inflation softened slightly from 1.4% yoy to 1.3% yoy, reflects steady pass-through of higher labor costs.

Meanwhile, headline CPI slowed from 4.0% yoy to 3.7% yoy.

New Zealand posts NZD 510m trade surplus as exports surge across key markets

New Zealand posted a surprise trade surplus of NZD 510m in February, defying expectations of a NZD -235m deficit.

Goods exports jumped 16% yoy to NZD 6.7B, led by strong demand from key trading partners including China, Australia, and the EU. Notably, exports to China surged by 16% yoy, while shipments to Australia and the EU rose by 17% yoy and 37% yoy, respectively. The only major decline was seen in exports to the US, which slipped by -5.5% yoy.

Goods imports edged up a modest 2.1% yoy to NZD 6.2B, with notable volatility in country-level data. Imports from the US spiked 41% yoy, while those from South Korea plunged -57% yoy. Imports from Australia (-9.3% yoy) and the EU (-3.3% yoy)also declined. Despite the pickup from the US and China (3.8% yoy), subdued import figures from other regions helped tilt the trade balance into surplus.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 148.32; (P) 148.64; (R1) 149.10; More...

Intraday bias in USD/JPY remains neutral and outlook is unchanged. Corrective pattern from 146.52 might extend. But in case of stronger recovery, upside should be limited by 150.92 support turned resistance. On the downside, firm break of 148.17 support will bring retest of 146.52 first. Sustained trading below 61.8% retracement of 139.57 to 158.86 at 146.32 will resume the fall from 158.86 to 139.57 support.

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.

Canada’s retail sales dropped -0.6% mom to CAD 69.4B in January, marking a steeper-than-expected decline and signaling subdued consumer spending.

The largest drag came from motor vehicle and parts dealers, while overall sales fell in three of nine subsectors.

Core retail sales, which strip out gasoline and auto-related purchases, also slipped -0.2%.

Adding to the concern, Statistics Canada's advance estimate suggests retail sales fell another -0.4% in February.

Full Canada retail sales release here

The EUR/USD pair is trending downward, approaching 1.0829 on Friday as investors evaluate the latest developments in US Federal Reserve monetary policy.

Key drivers behind EUR/USD movement

On Wednesday, the Federal Reserve held its current interest rate and overall monetary policy framework unchanged. However, the central bank signalled that two rate cuts could be expected later this year. In its commentary, the Fed highlighted growing risks to economic recovery, employment stability, and inflation trends.

Fed Chair Jerome Powell downplayed concerns about the inflationary impact of tariffs imposed by the Trump administration, describing them as temporary. Powell also emphasised that the Fed would not rush into further rate cuts, reinforcing a cautious approach to monetary easing.

Adding to market uncertainty, Trump’s retaliatory tariffs – targeting countries that have imposed duties on US goods – are set to take effect on 2 April. Over the past 24 hours, the US dollar has strengthened amid fears of slowing global economic growth and escalating trade tensions. These factors have reinforced risk-averse sentiment among investors.

Technical analysis of EUR/USD

On the H4 chart, EUR/USD declined to 1.0815, followed by a correction to 1.0860. A further decline towards 1.0765 is highly likely, with this level remaining the primary target. The MACD indicator supports this scenario. Its signal line is below zero, sloping sharply downward, indicating potential new lows.

On the H1 chart, EUR/USD broke through the 1.0864 level and formed a bearish wave structure, reaching 1.0815. Today, a corrective move towards 1.0860 (testing from below) is likely. Once this correction concludes, the pair could resume its downward trajectory, targeting 1.0811. This movement marks the third wave of the downtrend. After reaching this level, another retracement towards 1.0864 is possible. The Stochastic oscillator supports this outlook, with its signal line below 20 and trending upward towards the 50 level.

Conclusion

The EUR/USD pair remains under pressure as the Fed’s cautious stance and global trade tensions bolster the US dollar. Technical indicators suggest further downside potential, with key support levels at 1.0765 and 1.0811. Investors should monitor upcoming economic data and trade developments for additional insights into the pair’s direction.