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FTSE 100 Index: ⬆️ Buy

• FTSE 100 Index broke the resistance area
• Likely to rise to resistance level 10800.00

FTSE 100 Index recently broke the resistance area between the resistance level 10500.00 and the two daily up channels from November and June of 2025.

The breakout of this resistance area accelerated the active intermediate impulse wave (3).

Given the overriding daily uptrend, FTSE 100 Index can be expected to rise to the next resistance level 10800.00.

WTI Crude oil: ⬆️ Buy

• WTI Crude oil reversed from pivotal support level 62.00
• Likely to rise to resistance level 65.45

WTI Crude oil recently reversed from the support area between the pivotal support level 62.00 (which has been reversing the price from August, alternating between the support and resistance roles) and the 38.2% Fibonacci correction of the upward impulse from December.

The upward reversal from this support area stopped the previous minor ABC correction 2.

WTI Crude oil can be expected to rise to the next resistance level 65.45 (which has been reversing the price from September).

Markets

In yet another session stripped of volumes, volatility and news worthy the name, an overlooked NY Fed tariff study of last week drew some attention. It was Kevin Hassett’s (director of the National Economic Council) aim at the conclusion that ironically enough brought it back in the spotlight. He disagrees with the findings that US businesses and consumers paid nearly 90% of the cost of president Trump’s tariffs last year. The share was the largest in the first months of Trump’s presidency, 94%, before dropping to 86% in November (cut-off period). The study results of course undercut POTUS’ claim that foreign companies would bear the burden. Hassett called for the authors of what he described as “the worst study in the Fed’s history” to be disciplined. Also to be found in the non-market related section (at least for now) is speculation on ECB’s Lagarde early exit as president of the ECB. British newspaper Financial Times ran an article this morning floating the possibility to give French president Macron a say in her succession before the presidential elections of next year. A glimpse at the polls reveals the motive. The far-right Rassemblement National is consistently polling ahead of rivals and the belief is that the party’s unconventional views would complicate the nomination process. Commentators are drawing parallels with French central bank governor Villeroy’s announcement earlier this month to step down ahead of the end of his term. Lagarde is part of a bigger position switch going on at the ECB. Chief economist Lane’s and board member Schnabel’s terms end in 2027 too with the latter having openly solicited for Lagarde’s position in the past. Other touted candidates include Germany’s Nagel, the Netherland’s Knot and Spain’s de Cos.

Turning to markets then. Treasury yields build on yesterday’s intraday recovery to add 0.8-2.5 bps in a bear flattening move. It offers little relief for the likes of the 2-yr, which remains close to critical 3.4% support. The 10-yr tenor (4.07%) is trying to create breathing space, away from the 4% psychological barrier. European yields rise slightly, Bunds underperforming vs. swap. The US dollar extended earlier (marginal) gains after stronger-than-expected durable goods orders (December) in all of the gauges. The headline series (-1.4% vs -2% expected) was impacted by a sharp drop in nondefense aircraft orders (Boeing, -24.9%) but core measures all printed solid increases, including the one used for capital investments in GDP (shipments, +0.9%). December housing data came in well above consensus as well. Building permits and housing starts rose by 4.3% and 6.2% m/m respectively. An unexpected deterioration in the NY Fed’s services sector activity gauge (-25.7, from -16.1) tempered dollar bulls a bit. The 6-month gauge improved to the highest since February 2025 but remains below the series’ long-term average. DXY inches higher to 97.34, EUR/USD depreciates from 1.185 to 1.182. The kiwi dollar underperforms after the central bank this morning doused an Aussie-fueled fire for short-term rate hikes. NZD/USD’s stay north of 0.60 was cut short. Other noteworthy moves include NOK strength on higher oil prices. Brent rises 3% amid reports from news outlet Axios that a US-Iran war may be closer and longer-lasting than currently assumed.

News & Views

The Flemish Community raised €2bn via a long 10-yr bond (Jun2036) issued via syndication. The bond was priced to yield 17 bps over the Belgian OLO reference curve, compared with initial and revised guidance of respectively +21 bps and +19 bps. Books were above €11bn, highlighting solid demand. Flanders Department of Finance estimates total funding needs for 2026 at €9bn, the lion share of which is to cover new funding needs (€6bn). The funding need mainly stems from an estimated budget deficit of €1.83bn and other (recurring) funding needs such as the Flemish Social Housing Company (VMSW €0.92bn), the Flemish Housing Fund (VWF €1.36bn) and costs related to the Oosterweel link (LANTIS; €0.86bn). Debt redemptions for 2026 are projected at €2.82bn. They include Flanders’ short term Belgian Commercial Paper programme, rolling over a €1.5bn 3-month bill (current maturity 04/22/26) and a €0.75bn bond redemption (June2026). Internal redemptions (€0.17bn) are expected to be reinvested in the Flemish Community by the consolidated public institutions. Total new funding needs are forecasted to remain constant in the 2027-2030 period at €5-5.33bn. Including bond redemptions results in gross borrowing needs of €6.36bn-6.88bn in 2027, 2028 & 2030 and €7.6bn in 2029.

Daily Pivots: (S1) 1.1821; (P) 1.1839; (R1) 1.1873; More….

EUR/USD is still bounded in range trading and intraday bias stays neutral. On the upside, above 1.1928 will target a retest on 1.2081 high. Decisive break there and sustained trading above 1.2 psychological level will carry larger bullish implications. On the downside, however, sustained trading below 55 D EMA (now at 1.1763) will raise the chance of reversal on rejection by 1.2, and target 1.1576 support for confirmation.

In the bigger picture, as long as 55 W EMA (now at 1.1485) 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) 1.3497; (P) 1.3569; (R1) 1.3641; More...

Intraday bias in GBP/USD is mildly on the downside with breach of 1.3507 support. Sustained trading below 55 D EMA (now at 1.3518) will raise the chance of larger scale correction. Deeper fall should then be seen to 1.3342 support for confirmation. On the upside, break of 1.3711 will bring retest of 1.3867 high.

In the bigger picture, rise from 1.0351 (2022 low) still in progress and should target 1.4284 key resistance (2021 high). Decisive break there will add to the case of long term bullish trend reversal. For now, outlook will stay bullish as long as 1.3008 support holds, even in case of deep pullback.

Daily Pivots: (S1) 152.69; (P) 153.31; (R1) 153.91; More...

Intraday bias in USD/JPY remains neutral for the moment as range trading continues. With 38.2% retracement of 139.87 to 159.44 at 151.96 intact, price actions from 159.44 are seen as a consolidations pattern only. On the upside, firm break of 154.63 minor resistance will bring stronger rebound towards 157.65. However, decisive break of 151.96 will argue that it's reversing the rise from 139.87 already. In this case, deeper fall should then be seen to 61.8% retracement at 147.34, and possibly below.

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 151.77) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

Daily Pivots: (S1) 0.7679; (P) 0.7709; (R1) 0.7732; More….

USD/CHF recovers mildly today as consolidation pattern from 0.7603 continues. Intraday bias stays neutral for the moment. Stronger rebound cannot be ruled out but upside should be limited by 55 D EMA (now at 0.7849) to complete the pattern. On the downside, break of 0.7603 will resume larger down trend, and target 0.7382 projection level next.

In the bigger picture, down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8123 resistance holds.

Dollar trades slightly firmer as investors position ahead of FOMC minutes from January meeting. The hold decision itself is old news; what markets want to understand is how far policymakers are from resuming rate cuts. The dissent from Governors Christopher Waller and Stephen Miran was expected, given their dovish leanings. The more critical insight lies in the broader tone. Did others express openness to future cuts, or does the majority now see policy as appropriately calibrated?

March expectations are unlikely to shift meaningfully. June pricing, however, could move at the margin depending on how confident officials sound about disinflation progress. Any cautious or hawkish nuance would reinforce Dollar’s relative strength.

Sterling, meanwhile, is steady on the day but remains among the weakest performers this week. UK CPI confirmed that headline inflation is slowing quickly, reinforcing expectations of a BoE rate cut in March. If inflation continues trending lower, a couple of 25bps cuts from 3.75% this year appear plausible, with some forecasts pointing toward 3.00% by December.

However, much of the Sterling weakness was already priced following disappointing jobs data earlier this week. The more visible reaction has been in equities. FTSE touched a new record high on expectations of lower borrowing costs.

Kiwi softened mildly after RBNZ left OCR unchanged. While projections showed a slightly higher future rate path, the hawkish tilt was not strong enough to impress markets. Traders had anticipated firmer signals. Governor Anna Breman struck a measured tone, acknowledging the possibility of a rate hike by year-end but stressing that policymakers are not planning to tighten until stronger inflationary pressures and clearer economic recovery emerge. The message was one of patience.

In Europe, unconfirmed media reports suggested that ECB President Christine Lagarde is considering leaving her post before the 2027 French presidential election. The speculation follows the early resignation announcement by Bank of France Governor Francois Villeroy de Galhau, raising questions about broader leadership transitions within the Eurozone’s monetary framework.

The broader concern centers on the political backdrop in France. Lagarde’s term runs until October 2027, but with the French presidential election scheduled for spring that year — and rising support for far-right parties — there is growing sensitivity around who will influence the selection of her successor. According to reports, Lagarde may prefer that current French President Emmanuel Macron and German Chancellor Friedrich Merz retain decisive influence over the appointment process, rather than leaving the choice to a potentially more Eurosceptic administration.

So far this week, Dollar tops performance, followed by Aussie and Euro. Kiwi is the weakest, trailed by Yen and Sterling. Swiss Franc and Loonie sit in middle.

US durable goods orders fall -1.4% mom on transport drag, core demand firm

US durable goods orders fell -1.4% mom in December to USD 319.6B, slightly better than expectations for a -1.6% decline. The headline weakness was largely driven by transportation equipment, which dropped -5.3% mom to USD 113.5B and has now fallen in two of the past three months.

Stripping out transportation, however, the picture was stronger. Orders excluding transport rose 0.9% mom to USD 206.2B, well above expectations of 0.3%.

At the same time, orders excluding defense fell -2.5% mom to USD 298.4B, reflecting some softness in private-sector investment categories.

UK CPI slows to 3.0% in January as goods prices ease, services sticky

UK CPI slowed from 3.4% yoy to 3.0% yoy in January, matching expectations and marking the lowest annual rate since March 2025. On a monthly basis, prices fell -0.5% mom, reflecting broad-based easing in several categories.

Core inflation, which excludes energy, food, alcohol and tobacco, edged down from 3.2% yoy to 3.1% yoy — the lowest level since late 2021. Goods inflation cooled more decisively, with the annual rate falling from 2.2% to 1.6%. However, services inflation — a key focus for the BoE — eased only marginally from 4.5% to 4.4%.

ONS Chief Economist Grant Fitzner noted that petrol prices were a major driver of the decline, alongside lower airfares and softer food prices, particularly bread, cereals, and meat. These were partly offset by higher costs for hotel stays and takeaways.

The data reinforce the disinflation trend, but sticky services inflation may keep policymakers cautious despite strengthening expectations for a March rate cut.

RBNZ holds at 2.25%, lifts rate track slightly

RBNZ left the Official Cash Rate unchanged at 2.25%, in line with expectations, but delivered a slightly hawkish tilt through updated projections. While policymakers reiterated that monetary policy would remain “accommodative for some time,” the forward track now implies a marginally higher future rate path.

The central bank’s official projections see the OCR rising to 2.52% by March 2027, up from the previous estimate of 2.34%. That adjustment aligns with a broadly shared economist view that there is scope for one 25bps hike by late 2026 or early 2027, even as the near-term stance remains steady.

In its statement, RBNZ maintained confidence that inflation is likely returning to within the 1–3% target band this quarter. Officials expect inflation to move back toward the 2% midpoint over the next 12 months, supported by spare capacity, modest wage growth, and core measures already within target.

Taken together, the decision reinforces a steady policy stance in the near term while keeping the door open to eventual tightening. The slightly higher rate track signals that the next move remains upward, but timing will depend on how the recovery and inflation dynamics evolve.

Australia Westpac leading index falls, "on again, off again" year in 2026

Australia’s Westpac Leading Index slowed in January, falling from 0.44% to 0.02%, pointing to fading growth momentum at the start of 2026. Westpac noted that the slightly above-trend pace seen in the second half of 2025 has lost traction, adding that the earlier improvement was never particularly convincing and stalled mid-year.

The bank warned that with growth stalling again and further rate increases still possible, 2026 may shape up as another “on again, off again” year for the economy. Even so, Westpac continues to expect GDP growth of around 2.5% this year — broadly in line with trend and consistent with the Leading Index signal.

For monetary policy, the near-term focus is inflation. While a March hike cannot be ruled out, Westpac expects RBA to pause and wait for more evidence. The decisive moment is likely Q1 CPI at end-April. If inflation remains stubbornly high, another 25bps increase at the May meeting appears likely despite signs that tighter financial conditions are beginning to weigh on activity.

Japan exports surge 16.8% yoy in January as China demand rebounds

Japan’s exports jumped 16.8% yoy in January to JPY 9,187B, marking the fastest growth since November 2022. The increase was well above December’s 5.1% yoy rise and exceeded expectations of 12.0%, pointing to a sharp acceleration in external demand at the start of the year.

Shipments to China, Japan’s largest trading partner, surged 32% yoy, accelerating strongly from December’s 5.6% increase despite lingering diplomatic tensions following Prime Minister Sanae Takaichi’s remarks on Taiwan. In contrast, exports to the U.S. fell -5% yoy after an -11.1% drop in December. Transport equipment, accounting for more than 20% of export growth, rose modestly by 0.8% yoy.

Imports declined -2.5% yoy to JPY 10,340B, reversing December’s 5.1% rise and undershooting expectations of a 3.0% increase. As a result, Japan posted a trade deficit of JPY 1,153B.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.7679; (P) 0.7709; (R1) 0.7732; More….

USD/CHF recovers mildly today as consolidation pattern from 0.7603 continues. Intraday bias stays neutral for the moment. Stronger rebound cannot be ruled out but upside should be limited by 55 D EMA (now at 0.7849) to complete the pattern. On the downside, break of 0.7603 will resume larger down trend, and target 0.7382 projection level next.

In the bigger picture, down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8123 resistance holds.

US durable goods orders fell -1.4% mom in December to USD 319.6B, slightly better than expectations for a -1.6% decline. The headline weakness was largely driven by transportation equipment, which dropped -5.3% mom to USD 113.5B and has now fallen in two of the past three months.

Stripping out transportation, however, the picture was stronger. Orders excluding transport rose 0.9% mom to USD 206.2B, well above expectations of 0.3%.

At the same time, orders excluding defense fell -2.5% mom to USD 298.4B, reflecting some softness in private-sector investment categories.

Full US durable goods orders release here.

WTI oil price bounced from two-week low on Wednesday, retracing so far a good part of Tuesday’s 2.1% drop, sparked by mostly unjustified optimism over potential positive outcome of US-Iran talks.

Fresh advance (oil price gained 1.6% until mid-European session on Wednesday) suggests that traders remain very cautious, as any escalation of the conflict would likely result in closure of one of key corridors for oil transportation and cause strong negative impact on global supply.

In such scenario, oil prices would skyrocket, with rally towards $150 per barrel (some analysts predict rise above $200 per barrel) expected in immediate market reaction, as many commentators warn that potential war between the US and Iran would immediately engage all countries in the region and will be the biggest military operation since WWII.

From the technical point of view, we have witnessed a breach of very important supports at $62.43 (200DMA) and $62.03/00 (Fibo 38.2% of $54.87/$66.46 rally / psychological), but the action was short-lived (subsequent bounce prevented formation of strong bearish signal), keeping so far the downside protected.

Today’s large bullish candle (preferably close above $63.50, to create bullish engulfing pattern and boost developing positive signals).

Sustained break above $63.78 (50% retracement of $66.46/$$61.10 pullback) to validate reversal signal and open way for further recovery, as technical studies on daily chart are still conflicting (strengthening negative momentum vs MAs in mainly bullish setup).

Res: 63.72; 64.86; 65.10; 65.82.
Sup: 62.43; 62.00; 61.10; 60.66.