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US initial jobless claims fell -2k to 220k in the week ending March 8, slightly below expectation of 224k. Four-week moving average of initial claims rose 1.5k to 226k.

Continuing claims fell -27k to 1870k in the week ending March 1. Four-week moving average of continuing claims rose 6k to 1872k.

Full US jobless claims release here.

US PPI for final demand as unchanged in February, coming in below expectations of 0.3% mom rise. The 0.3% mom increase in goods prices was offset by -0.2% mom decline in services.

On an annual basis, PPI slowed to 3.2% yoy, down from January’s 3.7% yoy and missing the expected 3.3% yoy reading.

PPI excluding food, energy, and trade services, rose 0.2% mom. Over the past 12 months, this measure advanced 3.3% yoy, maintaining a relatively steady pace.

Full US PPI release here.

Eurozone industrial production posted a solid 0.8% mom increase in January, aligning with market expectations. The gains were driven primarily by a 1.6% rise in intermediate goods output and a 0.5% increase in capital goods production. However, declines were seen in other categories, with energy production falling by -1.2%, durable consumer goods slipping -0.2%, and non-durable consumer goods dropping -3.1%.

Across the broader European Union, industrial production rose by a more modest 0.3% mom. Among individual member states, Lithuania (+4.6%), Portugal (+3.7%), and Austria (+3.3%) recorded the strongest gains, while Malta (-12.9%), Denmark (-10.6%), and Slovakia (-7.3%) saw the sharpest declines.

Full Eurozone industrial production release here.

Gold price rose further on Thursday and pressure all-time high $2956 (Feb 24) after fresh post-US CPI acceleration took out last significant barriers at $2926/30.

Growing fears of economic slowdown on escalating trade war that contributes to scenario of more Fed rate cuts, along with lower than expected US inflation in February, further boosted demand for the yellow metal.

Technical studies on daily chart improved following the latest advance that extends into third straight day, as MA’s turned to full bullish setup and 14-d momentum broke into positive territory.

The latest action also contributes to signals that correction ($2956/$2832) is likely over and bulls may challenge new top for continuation of larger uptrend, paused for a healthy correction.

Firm break of $2956 trigger to expose targets at $2985 (Fibo 123.6% projection ff the upleg from $2832) and psychological $3000 barrier.

However, bulls may face increased headwinds at $2956 zone, due to significance of resistance, and consolidate before final break higher, with former pivots at $2930/26 (lower platform / Fibo 76.4%) offering solid supports which should keep the downside protected.

Res: 2956; 2985; 3000; 3003.
Sup: 2930; 2926; 2908; 2900.

As shown in the ETH/USD chart today, 11 March, Ethereum’s price dropped below $1,800 for the first time since autumn 2023. However:

→ the daily candle closed near its highs;

→ if the bearish candle on 14 March was an attempt to resume the downtrend, it proved unsuccessful.

Thus, we observe:

→ Ethereum’s price fluctuating around $1,880 with no signs of a renewed downtrend;

→ indications that the market has reached a temporary supply-demand equilibrium—suggesting price consolidation. It seems that selling pressure has weakened.

What could happen next?

Technical Analysis of the ETH/USD Chart

To assess ETH/USD price movements in a broader perspective over the past year:

→ the red channel illustrates Ethereum’s price dynamics;

→ blue markers highlight key interaction points between the price and channel lines (boundaries and median), reinforcing the channel’s relevance.

Applying the theory of cyclical fluctuations and market pendulum dynamics—popularised by Howard Marks in Mastering the Market Cycle—we can assume:

→ when ETH surged above the channel’s upper boundary in December 2024, driven partly by optimism surrounding Trump’s election victory, the market pendulum accumulated significant energy for the next movement (which appears to be the decline seen since early 2025);

→ now, the pendulum is nearing its lower point (where an asset’s price falls below its intrinsic value). Therefore, the next movement could be an upward shift towards the median, which currently sits around $2,500.

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German ECB Governing Council member Joachim Nagel warned that Germany could face a third consecutive year of economic contraction if US tariffs take full effect. Speaking to BBC, Nagel noted that without the tariffs, Germany’s economy was already expected to stagnate with minimal growth of around 0.2%. With escalating trade tensions, the risk of another recession looms large.

Nagel sharply criticized US President Donald Trump’s tariff policies, calling them “economics from the past” and “definitely not a good idea.” He defended the EU’s decision to impose retaliatory tariffs, adding that such a response was a "necessity" rather than a choice.

Addressing Germany’s recent shift in fiscal policy, Nagel described the decision to increase borrowing for defense and infrastructure spending as an "extraordinary measure for an extraordinary time."

He pointed out that the global economy is undergoing “tectonic changes,” which justify a more flexible approach to fiscal management. While Germany has traditionally maintained strict budget discipline, this shift would provide "some financial breathing room" to support recovery in the coming years, and send a "stability signal" to markets.

The EUR/USD pair is trading near 1.0887 on Thursday as investors cautiously evaluate the impact of escalating global trade tensions on the economy and consumer behaviour. Despite the uncertainty, the currency pair shows resilience, with market participants closely monitoring key developments.

Key market factors affecting EUR/USD

The primary focus remains on the ongoing global trade war, which has intensified following recent announcements by US President Donald Trump. Trump has pledged to impose additional tariffs on trading partners in response to the EU and Canada's retaliatory measures triggered by earlier US tariffs on steel and aluminium imports.

Further adding to the uncertainty, Trump reaffirmed his commitment to imposing additional retaliatory duties scheduled for April. This has intensified concerns about potential spillover effects on global markets and economic stability.

On the economic data front, US consumer inflation figures for February relieved the currency market. The Consumer Price Index (CPI) rose by 0.2% month-on-month, falling short of the expected 0.3% increase. Year-over-year, inflation eased to 2.8%, down from 3.0% in January. However, the full impact of recent tariffs is yet to materialise, leaving markets cautious about potential inflationary pressures in the coming months.

Investors are now focusing on the Federal Reserve's upcoming policy meeting next week. Market consensus suggests that the Fed will hold interest rates steady, but all eyes will be on the updated economic forecasts and any signals regarding future monetary policy. The decision could play a pivotal role in shaping the near-term trajectory of the EUR/USD pair.

Technical analysis of EUR/USD

On the H4 chart, the EUR/USD pair recently completed a growth wave, reaching a high of 1.0944. Currently, the market is consolidating near the top of this wave. A downward breakout from this range is anticipated, potentially initiating the first wave of decline toward the 1.0533 level. Following this, a corrective rebound to 1.0740 could occur. This scenario is supported by the MACD indicator, whose signal line remains above zero but is trending downward, signalling weakening momentum.

On the H1 chart, the pair is forming a consolidation range around 1.0830, extending up to 1.0944. A decline towards the lower boundary of this range is expected, potentially leading to a breakout and a drop to 1.0750. A subsequent retest of 1.0830 (from below) may follow before a further decline to 1.0533. The Stochastic oscillator reinforces this bearish outlook, with its signal line below the 50 mark and trending downward toward 20.

Conclusion

The EUR/USD pair remains precarious as investors navigate the dual challenges of escalating trade tensions and impending central bank decisions. While technical indicators point to a bearish near-term outlook, market sentiment remains highly sensitive to trade negotiations and macroeconomic data developments. Traders should remain alert to potential volatility and be prepared to adapt their strategies as new information emerges.

The chaos brought by Donald Trump to the US economy, introducing tariffs on China, Canada, and Mexico, has contributed to the strengthening of the euro, pound, and Swiss franc. The situation remained unchanged even after the release of US inflation data yesterday. According to the published figures, the core consumer price index declined more than analysts had forecast (2.8% versus 2.9%). In the long run, this may lead to an earlier Fed rate cut and a continued downward movement in the dollar.

EUR/USD

The euro has been strengthening for more than two consecutive weeks and is currently trading near last year’s October highs at 1.0950–1.0920. With the right news impulse, the price may break yesterday’s highs and test the psychological resistance level at 1.1000.

Yesterday, a “bearish harami” pattern formed on the daily timeframe. If confirmed, EUR/USD may start a downward correction towards 1.0830–1.0760.

In the upcoming trading sessions, the following events may influence EUR/USD pricing:

• Today at 12:50 (GMT+2): Speech by European Central Bank Vice President Luis de Guindos.
• Today at 13:00 (GMT+2): Eurozone industrial production data.
• Today at 20:00 (GMT+2): Speech by Burkhard Balz from the Bundesbank.
• Tomorrow at 10:00 (GMT+2): Germany’s Consumer Price Index (CPI).

GBP/USD

GBP/USD buyers managed to break out of a week-long flat movement between 1.2940–1.2870. The price has consolidated above the upper boundary of this range and may test a key resistance level at 1.3000. If the current levels turn into support, the uptrend may continue towards 1.3120–1.3050. A reversal of the bullish scenario is possible if the price drops below 1.2870.

By the end of the current trading week, the following events may affect GBP/USD pricing:

• Today at 15:30 (GMT+2): US initial jobless claims.
• Today at 15:30 (GMT+2): US Producer Price Index (PPI) (m/m).
• Tomorrow at 10:00 (GMT+2): UK Gross Domestic Product (GDP).
• Tomorrow at 10:00 (GMT+2): UK manufacturing production data.

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Markets

Markets yesterday saw the glass half full rather than half empty but for now its too early to draw any conclusion on a tentative bottoming out-process in (US) yields and/or equity markets. Regarding the multiple, often divergent storylines that markets have to cope with, the US trying to convince Russia to accept its proposal on a ceasefire for the war in Ukraine was a supportive factor for EMU equity markets (Eurostoxx 50 +0.97%). US markets also tentatively look for a bottom (Nasdaq +1.22%). A softer than expected US CPI (both February headline and core easing to 0.2% M/M vs 0.3% expected) also gave some comfort as investors are pondering the impact of tariffs further out. The EU retaliating against the US 25% tariff on steel an aluminum indicated that trade war is still a developing, highly unpredictable storyline, but next steps probably are only to be expected early April. The milder risk sentiment helped a further bottoming process on US interest rate markets. US yields rebounded further between 4.35 bps (2-y) and 3.25 bps (10-y) across the curve. European yields after last week’s sharp repositioning are in a (ST) consolidation phase. The German yield curve even slightly flattened with the 2-y yield adding 2.6 bps while the long end eased slightly (30-y -2.1 bps). We don’t draw any conclusions yet. At the ECB and its Watchers conference in Frankfurt, ECB chair Lagarde indicated that inflation might become more volatile and persistent in an era of several types of shocks. The ECB is examining the impact of the shocks. Lagarde didn’t given any concrete guidance on what this means for day-to-day monetary policy. Even so, the fiscal support that Germany/Europe is putting in place only suggest that there is a good reason for the ECB to move to a wait-and-see approach once policy is no longer restrictive. Markets remain divided on a next ECB rate cut in April (40-60 chance in favour of a pauze).
On FX markets, the pressure on the dollar also eased, at least temporarily. DXY ‘rebounded’ from 103.4 to 103.6. EUR/USD corrected back below 1.09 (close 1.089). USD/JPY also gained from 147.8 to 148.25, but closed well of the intraday top levels. Sterling outperformed both against the dollar and even more against the euro. EUR/GBP 0.8450/75is doing its job as a short-term resistance.

Despite yesterday’s rebound on WS, Asian equity markets show a hesitant picture this morning with several regional indices showing losses of 1.0%, Japan slightly outperforming. The DXY index is going nowhere (103.6). EUR/USD is correcting marginally further (1.0875). The yen outperforms (USD/JPY 147.8). BOJ governor Ueda in a response to questions in parliament, indicated that he remains confident that consumer spending will be further supported as wage rises are expected to continue. Later today, US PPI producer prices and weekly jobless claims probably will only be of intraday significance for trading. The EMU calendar is thin today. Still, a session with little high profile news might give some indication on underlying sentiment. In this respect, we look out how the recent EMU steepening trade evolves after yesterday’s pauze. On FX markets, we stay cautious on the dollar as US risk sentiment remains fragile. The risk of a US government shutdown at the end of the week in this respect probably doesn’t to help revive the dollar’s status as a solid reference/safe haven.

News & Views

The National Bank of Poland kept its policy rate yesterday unchanged at 5.75%. The expected inflation range for this year was slightly downwardly revised, from 4.2%-6.6% in November to 4.1%-5.7% while the one for next year faced an upward revision, from 1.4%-4.1% to 2%-4.8%. The NBP sees inflation between 1.1% and 3.9% in 2027. An additional inflationary source which featured a first time in the statement is a further economic recovery with a marked increase in domestic demand. References to the impact of already introduced increases in energy prices, rises in excise duties and administered services prices as well as the further unfreezing of energy prices in the second half of 2025 remain. This also shows up in upward revision to GDP projections: 2.9%-4.6% this year, 1.9%-4% next year and 1.1%-3.5% in 2027. NBP president Glapinski is expected to stick to his hawkish rhetoric at today’s press conference. The zloty obviously wasn’t impressed by the ongoing rate status quo, sticking near EUR/PLN 4.20.

The Bank of France cut its growth forecast from this year from 0.9% in December to 0.7%. It also downgraded next year’s prognosis from 1.3% to 1.2%. BdF chief economist warns to uncertainty on the international level linked to what is happening with US tariffs. The size of the negative impact will depend on targeting and duration. Upside risks come from additional defense spending. New inflation forecasts stand at 1.3% this year and 1.6% next, down from 1.6% and 1.7%.

The tariff hell broke lose yesterday after the US imposed 25% tariffs on all steel and aluminium imports triggering a swift response from the EU and Canada. The EU announced tariffs on around EUR 26bn worth of American goods, while Canadians slapped tariffs on CAD 30bn worth of US products. Voila, happy Thursday. Let’s see who blinks first.

Happily though, the US inflation ease more than expected in February on both monthly and annual basis. The prices of new cars and gas had a good easing impact on price pressures, while egg prices soared more than 10% (and apparently, the slowing demand there could help the producers catch up with strong demand). The market modestly cheered the news. The S&P500 recovered some 0.49%, Nasdaq 100 rebounded more than 1% while the Dow Jones retreated 0.20%. The volatility eased, but the worries remain as the tariffs will have implications. In the first place, they will cause a few jumps in price levels. You could argue that the price jumps due to tariffs will probably be limited in time, but bringing production sites back to the US will have a longer term impact on goods prices that are made in America, because obviously, it’s cheaper when things are made, or partly made in China or Mexico.

Then, tariffs mean the end of a free trade era that helped global economies, especially the rich Western nations including the US and the EU, benefit grandly from the so-called invisible hand – make the best do the job – which concentrated high value-added, well-paid jobs in the West and pushed low value-added, low-paid jobs to the others. In terms of amassing wealth in the long run, the end of the invisible hand is questionable.

Bur anyway, today, investors will keep focus on US producer price inflation; the headline PPI figure is also expected to have benefited from the latest weakening in energy prices. But the soft numbers will certainly be cheered with modest enthusiasm as the tariffs and their implications are unknown: no one knows how long they will stay and how far the retaliations extend. Trump already said that he will retaliate to the EU who dared to respond to his tariffs on metals.

If we are lucky, the softer-than-expected inflation figures could help taming the inflation expectations that have risen significantly with the tariff walkdown. But the outlook for the US indices remains negative. Funny enough, yesterday’s softer-than-expected CPI prints didn’t increase the probability of a May cut from the Federal Reserve (Fed). On the contrary, the chances of a May rate cut implied by activity on Fed funds futures fell to around 30% from around 40% where it stood yesterday morning, before the data release. Add to the mix that the Democrats and Republicans are having hard time agreeing on a spending bill increasing the chances of a government shutdown – one should really look carefully to find a good place to hide in the US equity space.

Inside Europe

The Stoxx 600 index jumped off its 50-DMA yesterday despite the tariff ping pong. The euro appreciation helps tame inflation expectations, and along with the prospects of high spending on defence and security, which should help boosting growth to some extent, gains here are certainly on a more solid footage than the US peers. The EURUSD tested the levels above the 1.09 level this week, but given the overbought market conditions, clearing a psychological level like the 1.10 mark could be hard to achieve. The euro could first see a minor pullback, catch its breath and jump above that level afterwards. Support to the positive trend building since mid-January is seen near 1.0730/70 level, including the minor 23.6% Fibonacci retracement and 200-DMA.

Across the Channel, Brits want to ink a trade agreement with the US and make the Brexit worth something better. But for now, the UK has only been the collateral damage of the global trade war and was also left out of the ample spending plans from the EU – the worse of both worlds. Cable is testing the 1.30 offers to the upside, and given the broad based USD depreciation, we could see Cable eventually break the back of the 1.30 offers, but the pound may have to say goodbye to its advance against the euro as the growth prospects are turning shinier in Europe than in the UK. The pair is now testing the upper band of a one-year downtrending channel, and a potential rise above the 0.85 level will confirm a medium-term bullish reversal in favour of the single currency. The UK will release its latest GDP figures tomorrow morning and are expected to show a slowdown in growth in February to just 0.1%.

In the equities space, the FTSE 100 also benefited from the rotation trade from the US toward the old continent, but underperformed the Stoxx 600 over the past weeks - a gap that could be attributed to the extra military spending budget that the EU benefits from that the UK doesn’t. The mining stocks weren’t necessarily hit by the tariff threats, as the threats increased demand from companies who were looking to frontload their purchases before the tariffs went live. Rio Tinto for example remained rangebound in the first two months of the year as we saw copper futures rise more than 20% since the beginning of the year despite the waning global growth prospects. But that rally looks vulnerable now that the tariffs are on. The impact of the latest tariffs could be heavier for the miner-heavy FTSE 100 than it is for the continental European peers.