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ECB President Christine Lagarde emphasized the need for Europe to assert more control over its economic future in light of looming US tariffs, set to begin on April 2.

In a France Inter radio interview, Lagarde reframed the narrative around “Liberation Day,” saying that while the US sees it as a move toward sovereignty, Europe must seize it as an inflection point—“a march toward independence.”

Lagarde reiterated her previous estimates that tariffs from the US could shave around 0.3% off Eurozone growth in the first year. Should Europe retaliate with reciprocal measures, the negative impact could deepen to as much as 0.5%.

On inflation, Lagarde noted that keeping it in check remains a “constant battle.” She stressed that while some progress has been made, inflation needs to fall in a sustainable way. That, she said, requires a carefully calibrated interest rate policy.

Daily Pivots: (S1) 193.17; (P) 194.47; (R1) 195.20; More...

Intraday bias in GBP/JPY remains neutral at this point. On the upside, break of 195.95 will extend the rally from 187.04 once again, to 198.94 resistance. However, firm break of 192.00 support will turn bias back to the downside for deeper fall. Overall, corrective pattern from 180.00 is still 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.

Daily Pivots: (S1) 161.85; (P) 162.52; (R1) 162.96; More...

Intraday bias in EUR/JPY remains neutral for the moment. Further rise is in favor as long as 160.73 support holds. Above 164.16 will resume the rally from 154.77 to 164.89 resistance, and then 166.67. However, break of 160.73 will turn bias back to the downside for 158.87 support and below. Overall, sideway consolidation pattern from 154.40 is still extending.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 0.8333; (P) 0.8351; (R1) 0.8387; More...

Intraday bias in EUR/GBP remains neutral for the moment. On the downside, below 08314 will bring deeper fall back to 0.8239 support. However, firm break of 0.8373 minor resistance will argue that fall from 0.8448 is merely a correction and has completed. Retest of 0.8448 should be seen next.

In the bigger picture, EUR/GBP is still bounded inside medium term falling channel. While rebound from 0.8221 might extend higher, it could still develop into a corrective pattern. Overall outlook will be neutral at best and down trend from 0.9267 (2022 high) could extend, at least until decisive break of channel resistance (now at 0.8495).

Daily Pivots: (S1) 1.7146; (P) 1.7189; (R1) 1.7273; More...

Intraday bias in EUR/AUD Remains neutral for the moment. On the upside, above 1.7270 resistance will argue that the correction has completed at 1.7047, and bring retest of 1.7417. Firm break there will resume larger rise from 1.6335. In case of another fall, downside is still expected to be contained by 1.6990 support to bring rebound.

In the bigger picture, the breach of 1.7180 key resistance (2024 high) suggests that up trend from 1.4281 (2022 low) is resuming. Sustained trading above 1.7180 will confirm and target 61.8% projection of 1.4281 to 1.7062 from 1.5963 at 1.7682, which is also close to 61.8% retracement of 1.9799 (2020 high) to 1.4281 at 1.7691. For now, this will remain the favored case as long as 1.6800 resistance turned support holds, even in case of deep pullback.

Daily Pivots: (S1) 0.9511; (P) 0.9531; (R1) 0.9558; More....

Intraday bias in EUR/CHF remains neutral at this point. Strong support is still expected from 0.9486 to complete the correction from 0.9660. On the upside, above 0.9581 minor resistance will bring retest of 0.9660 high. Firm break there will resume whole rise from 0.9204. However, sustained break of 0.9489 will dampen this view, and bring deeper fall back to 0.9331 support next.

In the bigger picture, prior strong break of 55 W EMA (now at 0.9491) is a medium term bullish sign. Sustained break trading above long-term falling channel resistance (at around 0.9610) would suggest that the downtrend from 1.2004 (2018 high) has bottomed at 0.9204. Stronger rally should then be seen to 0.9928 key resistance at least.

Markets

The build-up to US President Trump’s “Liberation Day” is leaving very nasty scars on financial markets. Last Friday’s trading session was full risk-off with European stock markets losing around 1% and key US gauges dropping 1.7% to 2.7%. US indices are ready for/into a new fierce sell-off wave after falling out of the flag of a technical bearish flag formation and extending the sell-on-upticks pattern. Safe haven flows resulted in a correction higher in US Treasuries, but we doubt that they’ll be a long term beneficiary of current developments. US yields lost 8 bps to 11 bps in a daily perspective with the belly of the curve outperforming the wings. Treasuries outperformed German Bunds with daily German changes varying between -3.2 bps (30-yr) and -5.3 bps (5-yr). US eco data on Friday confirmed the stagflation risks with March inflation expectations in the Michigan consumer confidence survey showing upward revisions for bot the short term (1y) gauge (5% from 4.9%; highest since 2022) and long term (5-10y) measure (4.1% from 3.9%; highest since February 1993). In the meantime, the Atlanta Fed’s GDPNow estimate showed Q1 GDP shrinking by 2.8% Q/Qa vs the previous release’s estimate of -1.8% Q/Qa. Unlike US Treasuries, the US dollar failed to even briefly profit from the risk-off climate given the rising US recession risk premium. Fears of global de-dollarization become more and more of an issue as well. EUR/USD closed back above the 1.08 mark (1.0845). USD/JPY fell from 151.05 to 149.84.

Friday’s themes are at play this morning. Asian stock markets sink by up to 3-4% (Japan, Taiwan) with European and US futures pointing to steep losses. USD/JPY slides further below 149 with core bond futures gaining more traction. US President Trump said he’ll start his reciprocal tariffs with all countries (20% across the board?!) instead of a focus on the “dirty 15” which are responsible for the lion share of the US goods trade deficit as suggested earlier by Secretary of Treasury Bessent. Details on what specific sectors, calculations or (ways to get) exemptions are still unknown. Adding to the risk-off climate is an escalation in ceasefire talks between Russia and the US with Trump threatening secondary tariffs on buyers of Russian oil and more and more talk about plans to bypass the constitution prohibition on US presidents being elected three times. This week’s tariff narrative by far outweighs other eco figures like today’s EMU March CPI figures (expected to strengthen the case for a final April ECB rate cut) or key US eco data (ISM surveys, JOLTS job openings, ADP employment and payrolls).

News & Views

Both the Chinese manufacturing and non-manufacturing PMI rose gradually further above to 50 mark this month. The manufacturing index improved from 50.2 to 50.5, the best level in 12 months. The rise was supported by a further improvement in orders. However, employment remained in contraction territory (48.2). Price indicators suggest ongoing deflationary pressures (input prices 49.8, output prices 47.9). Medium and small enterprises showed an improvement in sentiment, which might be an indication of better domestic demand. Large enterprises turned more cautious. The non-manufacturing improved modestly as well, from 50.4 to 50.8. The rise suggests that (fiscal) stimulus is gradually supporting activity. A the same time, some of the improvement might be due to orders improving as demand has been frontloaded ahead of the implementation of US tariffs later this week.

Rating agency S&P on Friday affirmed the Czech Republic’s AA- credit rating with a stable outlook. According to S&P, the stable outlook reflects the view that Czechia's strong government and external balance sheets, including sizeable international reserves at the central bank, should cushion the effects of a more muted economic performance in the face of a more subdued European economic outlook, unclear trajectory of global trade disputes, and structural challenges facing Czechia's automotive manufacturing-centered economy. S&P assesses that economic recovery since the pandemic has been somewhat lackluster with GDP only exceeding 2019 levels by only 2.5%. 2025-2026 growth is seen as mainly being driven by domestic factors with average growth at about 2% still seen below potential growth of 2.5%. Still growth is expected to exceed the average of the EU. S&P also indicated that Czechia demonstrated the strongest fiscal consolidation within the CEE region with a government deficit below 3%. Net public debt also is expected to remain low at 31% of GDP, which the rating agency sees as proving room for spending on defense and nuclear power generation.

Daily Pivots: (S1) 1.4286; (P) 1.4310; (R1) 1.4342; More...

Intraday bias in USD/CAD stays neutral for the moment. Overall, corrective pattern from 1.4791 is still extending. On the upside, break of 1.4400 will argue that it's still in the second leg, and turn bias to the upside for 1.4541 resistance. On the downside, break of 1.4238 will suggest that the third leg has already started for 1.4150 and below.

In the bigger picture, long term up trend is tentatively seen as resuming with prior breach of 1.4667/89 key resistance zone (2020/2015 highs). Next target is 100% projection of 1.2401 to 1.3976 from 1.3418 at 1.4993. This will remain the favored case as long as 1.3976 resistance turned support holds (2022 high), even in case of deep pullback.

Daily Pivots: (S1) 0.6275; (P) 0.6293; (R1) 0.6306; More...

Intraday bias in AUD/USD remains neutral as sideway trading continues. On the downside, below 0.6257 will target 0.6186 support first. Firm break there will indicate that corrective pattern from 0.6087 has completed and larger fall from 0.6941 is ready to resume. For now, outlook will stay bearish as long as 38.2% retracement of 0.6941 to 0.6087 at 0.6413 holds, in case of another recovery.

In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6474) holds.

Daily Pivots: (S1) 1.0782; (P) 1.0813; (R1) 1.0862; More...

Intraday bias in EUR/USD stays neutral for the moment. On the upside, break of 1.0857 resistance will indicate that correction from 1.0963 has completed already. Retest of 1.0953 should be seen first. Firm break there will resume the rally from 1.0176 towards 1.1274 key resistance. In any case, outlook will remain bullish as long as 38.2% retracement of 1.0358 to 1.0953 at 1.0726 holds.

In the bigger picture, prior strong break of 55 W EMA (now at 1.0692) 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.