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Canadian GDP ticked higher by 0.1% month-on-month (m/m) in January slightly edging out Statistics Canada's advanced guidance and market expectations for a flat reading.

Compositionally, 9 of 20 industries registered an increase on the month. Goods industries rose for a second consecutive month (0.2% m/m), while the services sector recorded no growth.

Oil and gas extraction (+1.6% m/m) and the construction sector (+1.1% m/m) pushed the overall goods sectors higher in January. This offset the contraction in the manufacturing sector, dragged lower by motor vehicles and parts manufacturing (-10.8% m/m).

On the services side, decreases in wholesale trade (-1.2% m/m), transportation and warehousing (-0.7% m/m) and real estate (-0.2% m/m) were offset by solid gains in retail trade (0.8% m/m) and finance and insurance (0.5% m/m).

Advanced guidance calls for an acceleration in February's real GDP growth to 0.2% m/m, led by a manufacturing rebound and continuing strength in mining and finance and insurance.

Key Implications

Canada's economy looks to be off to a slightly better-than-expected start in 2026 after a lackluster fourth quarter. With January's print and a flash estimate for February, Q1-2026 growth is tracking in-line with historical trend growth, a view shared by both us and the Bank of Canada. It's worth noting that quarterly expenditure-based GDP growth has been particularly volatile due to sharp movements in trade and inventories, something not well captured in the monthly industry GDP accounts.

Today's data shouldn't impact the Bank of Canada's next policy decision on April 29th. Instead, the recent U.S.-Iran war is keeping the BoC more forward looking, with the economic outlook highly dependent on how long and severe the conflict becomes. The Bank will closely monitor this shock – weighing downside risks to growth against the upside inflationary impacts – and stand ready to respond. For now, we maintain our view that the BoC has reached the end of their interest rate easing cycle.

Daily Pivots: (S1) 1.1429; (P) 1.1476; (R1) 1.1509; More….

EUR/USD recovered ahead of 1.1408 support as consolidations continue. Intraday bias remains neutral for the moment. Further decline is expected with 1.1666 cluster resistance (38.2% retracement of 1.2081 to 1.1408 at 1.1665) intact. On the downside, firm break of 1.1408 will resume the fall from 1.2081 to 38.2% retracement of 1.0176 to 1.2081 at 1.1353. However, decisive break of 1.1666 will argue that the fall from 1.2081 has completed, and turn bias back to the upside for 61.8% retracement of 1.2081 to 1.1408 at 1.1824.

In the bigger picture, prior break of 55 W EMA (now at 1.1497) should confirm rejection by 1.2 key cluster resistance level. The whole up trend from 0.9534 (2022 low) might have completed as a three wave corrective rise too. Deeper fall is expected to long term channel support (now at 1.0535). Meanwhile, risk will stay on the downside as long as 1.2081 holds, even in case of strong rebound.

Daily Pivots: (S1) 1.3144; (P) 1.3213; (R1) 1.3253; More...

A temporary low is formed at 1.3158 with current recovery, and intraday bias in GBP/USD is turned neutral. Some consolidations could be seen, but outlook will remain bearish as long as 1.3479 resistance holds. Below 1.3158 will resume the fall from 1.3867 to 61.8% projection of 1.3867 to 1.3216 from 1.3479 at 1.3077 first. Decisive break there could prompt downward acceleration through 1.3008 support to 100% projection at 1.2828.

In the bigger picture, considering bearish divergence condition in both D and W MACD, a medium term top should be in place at 1.3867. Firm break of 1.3008 support will argue that fall from 1.3867 is at least correcting the rise from 1.0351 (2022 low) with risk of bearish reversal. That would open up further decline to 38.2% retracement of 1.0351 to 1.3867 at 1.2524. For now, medium term outlook will be neutral at best as long as 1.3867 resistance holds, or until further development.

Daily Pivots: (S1) 159.17; (P) 159.82; (R1) 160.39; More...

Intraday bias in USD/JPY remains neutral for the moment. On the downside, sustained break of 55 4H EMA (now at 159.27) should confirm short term topping at 160.45, on bearish divergence condition in 4H MACD. Deeper fall should then be seen to 157.49 support to correct the rally from 152.25. Nevertheless, strong rebound from current level, followed by 160.45, will target 161.94 high.

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 152.97) holds. Firm break of 161.94 will pave the way to 61.8% projection of 102.58 to 161.94 from 139.87 at 176.75.

Daily Pivots: (S1) 0.7969; (P) 0.7991; (R1) 0.8019; More….

With 0.7951 minor support intact, intraday bias in USD/CHF stays mildly on the upside despite some loss of momentum. Current rally from 0.7603 should target 38.2% retracement of 0.9200 to 0.7603 at 0.8213. On the downside, below 0.7951 minor support will turn intraday bias neutral first. But further rally is expected as long as 0.7833 support holds, in case of retreat.

In the bigger picture, a medium term bottom should be in place at 0.7603 on bullish convergence condition in D MACD. Rebound from there is seen as correcting the fall from 0.9200 only. However, decisive break of 55 W EMA (now at 0.8088) will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high). On the other hand, rejection by the 55 W EMA will setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage.

Global markets are frozen as traders grapple with conflicting interpretations of U.S. President Donald Trump’s latest post on the Iran war, leaving oil prices rangebound near 110 and broader price action lacking conviction. The message introduces competing scenarios with sharply different implications for supply, creating pricing paralysis across assets. While European recovered along with US futures, there was not clear momentum for a genuine reversal. Dollar's retreat today looked more like a consolidation than a turnaround.

In the post, Trump declared that Iran has been “essentially decimated” and that “the hard part is done,” while telling allies to “go to the Strait, and just TAKE IT” and warning that “the U.S.A. won’t be there to help you anymore.” The language suggests a redefinition of success, where achieving military objectives no longer requires reopening the Strait of Hormuz.

One interpretation is that this signals a shift toward containment. Under this view, the U.S. is preparing to step back even if no deal is reached by April 6, leaving affected countries to manage the reopening of shipping lanes. This aligns with earlier reporting of an exit strategy and would likely place a ceiling on oil prices, with Brent potentially easing toward 100 as risks stabilize rather than escalate.

However, an opposing scenario remains equally plausible. Trump’s comments can also be read as insulating the U.S. from the consequences of further escalation. By telling allies to “go get your own oil,” Washington creates political cover if massive infrastructure strikes on Iran proceed and the Strait remains closed. In this case, supply disruptions would intensify sharply, pushing oil prices significantly higher.

A third risk lies in inaction. If the April 6 deadline passes without either a deal or escalation, the “Maximum Pressure” strategy risks losing credibility, weakening U.S. leverage in upcoming negotiations, including the U.S.-China summit in particular. At the same time, Iran’s move toward selective access to the Strait raises the prospect of a structural bottleneck in global energy flows.

These competing scenarios—containment, escalation, or policy erosion—are leaving markets unable to form a dominant narrative. Oil’s tight range around 110 reflects a balance between downside caps and upside risks, while equities and gold show similarly subdued, directionless moves.

In currency markets, Dollar is easing mildly but the move lacks follow-through, consistent with consolidation rather than reversal. Elevated energy prices and inflation risks continue to provide an underlying bid, even as near-term momentum softens.

Euro is holding steady following March CPI data, where headline inflation rose to 2.5% while core inflation edged lower. The divergence complicates the ECB’s outlook, with an April rate hike still likely but not certain. Much will depend on how persistent energy costs prove and how quickly they feed into core inflation.

Yen failed to extend gains despite recent intervention rhetoric, as USD/JPY is no longer pressing the 160 threshold. Without that trigger, demand for Yen has faded. For the week so far, Yen remains the strongest performer, followed by Aussie and Dollar, while Kiwi lags, reflecting a market driven more by positioning than conviction.

In Europe, at the time of writing, FTSE is up 1.01%. DAX is up 1.03%. CAC is up 0.82%. UK 10-year yield is down -0.049 at 4.829. Germany 10-year yield is down -0.024 at 3.011. Earlier in Asia, Nikkei fell -1.58%. Hong Kong HSI rose 0.15%. China Shanghai SSE fell -0.80%. Singapore Strait Times fell -0.24%. Japan 10-year JGB yield closed flat at 2.359.

Silver Price Gains “Oxygen” from Yield Pullback; Break Above 74.52 to Confirm Momentum

Silver price rebounded as US yields pulled back from the 4.5% level and Powell’s comments eased expectations for further Fed tightening. The move has provided “oxygen” for metals, but a break above 74.52 is needed to confirm upside momentum. Further gains depend on sustained yield weakness or easing geopolitical risks. Read More.

Canada GDP Edges Higher as Resource Sector Offsets Manufacturing Weakness

Canada’s economy grew 0.1% in January, supported by strength in resource sectors despite weakness in manufacturing. Services activity was broadly flat, highlighting uneven momentum. Early estimates suggest a stronger 0.2% expansion in February, pointing to modest but ongoing growth. Read More.

Eurozone CPI Jumps to 2.5% as Energy Drives Rebound, Core Inflation Eases Slightly

Eurozone CPI jumped as energy inflation rebounded sharply, but cooling core prices suggest underlying pressures remain contained. The ECB now faces a more complex policy trade-off. Read More.

RBA Minutes Highlight Excess Demand and Oil Shock as Case for Further Tightening

RBA raised rates to 4.10% in a split 5–4 decision, with minutes showing growing concern over oil-driven inflation risks. The Board signaled more tightening may be needed, despite uncertainty around growth and the Middle East conflict. Read More.

China PMIs Return to Expansion as Output and Orders Rebound, but Cost Pressures Surge

China’s Manufacturing PMI rose to 50.4 in March, signaling a return to expansion as production and new orders improved. However, input costs surged sharply, while output prices lagged, pointing to growing margin pressure. Non-manufacturing activity also edged back into expansion. Read More.

NZ ANZ Business Confidence Tumbles to 32.5 as Cost Pressures Surge to Highest Since 2023

New Zealand business confidence tumbled in March as cost pressures surged to the highest since 2023, with more firms expecting to raise prices. Inflation expectations also climbed while activity outlook weakened, pointing to a growing stagflation risk. Read More.

Japan Tokyo CPI Core Weakens to 1.7% as Energy Subsidies Drag Inflation Lower

Tokyo CPI slowed to 1.7% in March, marking a second month below the BoJ’s 2% target as energy subsidies continued to suppress prices. However, the sharp slowdown in gasoline declines points to rising oil pressures beginning to offset policy support. The data highlight a fragile balance between near-term disinflation and emerging upside risks. Read More.

Japan Factory Output Contracts as Auto Weakness Weighs, Outlook Remains Uncertain

Japan industrial production fell -2.1% in February after a 4.3% rise in January, with weakness across most sectors led by autos. Retail sales also disappointed, pointing to soft demand, while unemployment edged lower to 2.6%. The data highlight a mixed outlook with fragile growth but stable labor conditions. Read More.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.7969; (P) 0.7991; (R1) 0.8019; More….

With 0.7951 minor support intact, intraday bias in USD/CHF stays mildly on the upside despite some loss of momentum. Current rally from 0.7603 should target 38.2% retracement of 0.9200 to 0.7603 at 0.8213. On the downside, below 0.7951 minor support will turn intraday bias neutral first. But further rally is expected as long as 0.7833 support holds, in case of retreat.

In the bigger picture, a medium term bottom should be in place at 0.7603 on bullish convergence condition in D MACD. Rebound from there is seen as correcting the fall from 0.9200 only. However, decisive break of 55 W EMA (now at 0.8088) will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high). On the other hand, rejection by the 55 W EMA will setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage.

Canada’s economy expanded by 0.1% mom in January, beating expectations of a flat reading, as strength in resource-related sectors helped offset ongoing weakness in manufacturing.

Goods-producing industries rose 0.2% mom for a second consecutive month, supported by gains in mining, quarrying, and oil and gas extraction, alongside construction and utilities. These gains more than compensated for a contraction in manufacturing.

Services activity, however, showed little momentum. While retail trade and finance and insurance posted increases, these were offset by declines in wholesale trade and transportation and warehousing, leaving the sector broadly unchanged.

Overall, 9 of 20 industries recorded growth, reflecting a mixed but slightly positive economic backdrop.

Looking ahead, advance estimates suggest GDP rose a further 0.2% mom in February, indicating that growth is continuing, albeit unevenly across sectors.

Full Canada's GDP release here.

• Expectations of ECB hikes are not helping the EURUSD.
• Iran holds the reins of the conflict in the Middle East.

The US dollar ends March with its best monthly performance since September 2022, whilst the euro ends with its worst quarterly performance since 2024. This divergence has been driven by investor concerns about the global economy. The conflict in the Middle East has pushed Brent above $105 per barrel. The supply shock is heightening the risks of a slowdown in global GDP and putting pressure on currencies sensitive to falling export demand.

The divergence in monetary policy is not helping the EURUSD. Before the conflict in the Middle East, the chances of an ECB rate cut in 2026 stood at 35%, and the Fed’s at 96%. However, a month on, the futures market expects three rounds of monetary tightening from the European Central Bank, and a 74% probability that the Fed will keep the federal funds rate at its current level.

Alas, monetary policy operates with a lag and cannot counter energy disruptions in real time. This is the view of Jerome Powell. He and his FOMC colleague, New York Fed President John Williams, believe the best course is to keep rates at current levels.

Meanwhile, according to Société Générale, Brent risks rising to $150 per barrel in April, with an average price of $125. A closure of the Bab al-Mandab Strait by the Houthis could push prices higher. Saudi Arabia has managed to bypass the Strait of Hormuz and deliver 6 million BPD via alternative routes. However, new difficulties will automatically force Riyadh to cut production.

Amid escalating geopolitical tensions, risks to energy infrastructure and supply routes are driving concerns over a potential surge in oil prices and a broader economic slowdown. The situation remains fluid, leaving policymakers with difficult strategic choices. Market-based indicators suggest a rising probability of further escalation.

Meanwhile, gold is attempting a counter-offensive amid falling US Treasury bond yields. Treasury yields are falling due to a shift in investor sentiment. Whereas stagflation previously frightened them, markets are now discussing the likelihood of a US economic downturn.

Market Overview

The crypto market remains stable, having risen slightly over the past 24 hours, and market capitalisation has reached $2.33 trillion, rebounding from an intraday low of $2.28 trillion. The overall trend mirrors that of stock indices.

The cryptocurrency market sentiment index remains in the extreme fear zone at 11 points, up 3 points from the day before. Over the past two months, the figure has risen above 25 only twice, and the average for the period barely exceeds 12 — a record low and the longest sustained level in the indicator’s history.

Bitcoin is trading at $67,700, up around 1% since the start of the day, though it remains below the 50-day moving average. At the same time, BTC is forming another bounce off the upward support line running through the lows of the last two months.

News Background

According to CoinShares, global investment in crypto funds fell by $414 million last week — the first decline since late February. The outflow affected leading assets: investments in Bitcoin fell by $194 million, in Ethereum by $222 million, and in Solana by $12 million. The exception was XRP, which attracted $16 million.

CoinShares analysts attribute the first outflow in five weeks to the escalation of the geopolitical situation surrounding Iran and concerns regarding rising inflation. Notably, market expectations regarding the Fed rate for June have shifted from a cut to a hike.

Over the longer term, the picture is mixed. Finality Capital anticipates a multi-stage market reset, which will ultimately form a sustainable bull cycle. Bitcoin Vector co-founder Willy Wu, based on on-chain models, has identified a potential bottom for Bitcoin in the $46,000–$54,000 range. Analyst Darkfost notes that over 40% of altcoins have come close to or broken their all-time lows — a figure exceeding the peak of the previous bear market (38%).

On the regulatory front, the ECB has highlighted the high concentration of control within the DeFi sector, noting that this simplifies the supervision of market participants. Meanwhile, despite unrealised losses of $7.5 billion, BitMine has purchased an additional 71,179 ETH for $147 million, bringing its reserves to 4.73 million ETH (3.92% of the supply).

GBP/USD is attempting to recover on Tuesday following earlier declines, bouncing from 1.3198 after five consecutive sessions of selling. Sterling remains under pressure as investors assess the impact of the Iran conflict on the British economy.

Despite this, since the beginning of March, the pound has remained one of the most stable currencies against the dollar.

However, sterling remains vulnerable. Britain's high reliance on gas imports, persistently high inflation, and pressure on public finances are heightening risks. The yield on 10-year government bonds is holding around 4.98%, near highs not seen since 2008, following recent increases.

Additional attention is focused on the debt market: after the government bond sale, some pension funds were required to increase collateral to hedge positions, although the scale remains far from the 2022 crisis levels.

Macroeconomic data also point to a slowing economy. Business activity is growing at its slowest pace in six months, producer costs are accelerating, and retail sales are declining.
The Bank of England is likely to remain cautious about changing rates – this remains the prevailing expectation.

Technical Analysis

On the H4 GBP/USD chart, the market is forming a broad consolidation range around 1.3297, currently extending up to 1.3434. A decline to 1.3156 is likely in the near term, followed by the formation of a new consolidation range. An upside breakout would open the way for a continuation move to 1.3300, while a downside breakout would suggest further movement to 1.3100. Technically, this scenario is confirmed by the MACD indicator, whose signal line is below zero and pointing downwards.

On the H1 chart, the market has formed a compact consolidation range around 1.3322. A downside breakout has initiated a wave structure extending to 1.3100. Should this level be breached, further downside potential towards 1.3050 would emerge. Conversely, an upside breakout from the range could trigger a rebound towards 1.3300. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line below 50 and pointing downwards.

Conclusion

GBP/USD is attempting to stabilise after five consecutive days of selling, though the broader outlook remains fragile. While sterling has shown relative resilience compared to other currencies since March, mounting headwinds – including the UK's energy import dependence, stubborn inflation, debt market pressures, and slowing economic activity – continue to weigh on the pound. The Bank of England's cautious stance offers little immediate support, and technical indicators point to further downside potential. A recovery pause may materialise, but sustained upside appears unlikely without a tangible shift in either geopolitical tensions or domestic economic data.