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In focus today

In the US, 2nd estimate of Q4 GDP will be released in the afternoon. The flash release showed GDP growth cooling to 2.3%, but with private consumption growth remaining solid. Several Fed speeches are also scheduled for today, including ones from Hammack, Harker, Barkin and Schmid.

In the euro area, we look out for data on credit and money growth in January. Credit growth will indicate the degree of restrictiveness of monetary policy, thus serving as a notable datapoint for the ECB.

In Spain, inflation data for February is released, providing signals of the euro area print on Monday. We expect inflation to decline in February due to lower energy inflation and services inflation. Services inflation is expected to decline significantly in the coming months due to base effects from the large increases recorded in the same months last year.

In Norway, we expect Norges Bank's Expectations Survey to show that inflation expectations will continue to fall in both the short and long term. We will also focus on the wage expectations of the labour market organizations for 2025 and 2026. We are also keeping an eye on whether the preliminary employment figures for January will confirm the weak trend seen in December, or whether it was noise.

In Sweden, we receive the Economic Tendency Indicator from the National Institute of Economic Research. We will be looking closely at the companies' pricing plans following yesterday's high PPI figures and last week's high inflation figures. Data on the trade balance and household lending is also released.

Economic and market news

What happened yesterday

In the US, mixed signals came from the White House, as President Trump reportedly opened the door for postponing the tariffs on imports from Mexico and Canada, stressing they could take effect on 2 April. Conversely, a White House official stated that Trump's initial 4 March deadline remained in effect. Simultaneously, Trump also threatened to impose 25% tariffs on EU goods - "that will be on cars and all other things". All in all, the ambiguous tariff signals could suggest that Trump is using them as a negotiation tool, also underscored by a modest market reaction to the remarks. Hence, tariff uncertainty remains.

In geopolitics, President Zelenskyy was on the wire, emphasizing that the success of the minerals deal with the US hinges on this upcoming talks with President Trump. At the same time, Zelenskyy reiterated statements from his deputy prime minister and justice minister, noting that the agreement is part of broader deals with the US, while it could also be included in future security guarantees. Trump confirmed that Zelenskyy will travel to the US on Friday to sign the deal but indicated that the US would not provide any far-reaching security guarantees, saying that Europe should take on that responsibility.

We are hosting a webinar today at 09:30-10:00, guiding you through the status and what to expect in terms of possible outcomes and the channels of economic impact. To listen in, please use the following link: Webinar - The new security disorder in Europe - what are the economic implications?, 27 February.

In the euro area, the EU commission presented its "Clean Industrial Deal" comprising its business plan for reviewing economic growth and achieving decarbonisation by unlocking investments in clean industries. The deal aims to boost demand for made-in-Europe products, making energy more affordable, securing access to raw materials, and sharply cut the number of SME companies affected by reporting requirements. We do not expect to a short-term impact on growth from the deal, since there is no significant increase in public spending as part of the plan. The Commission aims at mobilising EUR 100bn (which is merely 0.6% of EU GDP) for EU clean manufacturing in "short-term relief", but is unclear where the money should come from, and it will mostly likely be mainly private capital as the EU faces financing constraints. All in all, any effect of the deal is years out in the future, but it will likely be positive.

Equities: The rotation into Europe continued Wednesday. S&P 500 closed unchanged while Stoxx 600 gained a full 1%. Despite new tariff threats, US markets stopped the bleeding following four-straight declines, with most indices modestly higher. Another sign that investors have recovered was renewed cyclical preference in the sector space. Cyclicals beat defensives by a full 1% globally. This was led by tech consumer discretionary and banks. The Nvidia earnings report helped pushing back AI capex bubble concerns, after crushing earnings expectations and upbeat commentary. US futures are a notch higher this morning.

FI: Another trading session with a mild bid for European duration, amid concerns about the (particularly) US growth outlook. Since late last week with disappointing US macro data, 10y UST has declined more than 30bp to 4.25%. At the same time, 10y Bunds have declined "only" 10bp, thereby narrowing the transatlantic spread to 181bp. Last night it was reported that the potential US tariff hikes have been postponed to early April. On the data front, we get Spanish inflation releases today for February.

FX: JPY, GBP and USD gained yesterday, where Scandies and AUD and NZD lost on a day whene risk sentiment overall was mixed. EUR/USD traded close to 1.05, EUR/SEK climbed above 11.15 and EUR/NOK hovered around 11.70.

Daily Pivots: (S1) 188.32; (P) 189.09; (R1) 189.77; More...

Intraday bias in GBP/JPY remains neutral and outlook is unchanged. Risk will be mildly on the downside as long as 193.04 resistance holds. On the downside, firm break of 187.04 will extend the fall from 199.79 towards 180.00 support.

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) 155.84; (P) 156.51; (R1) 157.00; More...

Intraday bias in EUR/JPY stays neutral and further decline is expected with 158.19 minor resistance intact. On the downside, firm break of 155.72 will be a strong sign that whole fall from 175.41 is resuming. Retest of 154.40 support should be seen next and firm break there should confirm. However, break of 158.19 resistance will turn bias back to the upside and extend the corrective pattern from 154.40 with another rising leg.

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. Next target will be 100% projection of 175.41 to 154.40 from 166.67 at 145.66.

Daily Pivots: (S1) 0.8256; (P) 0.8280; (R1) 0.8295; More...

Intraday bias in EUR/GBP remains neutral and further decline is expected with 0.8308 resistance intact. Below 0.8264 will resume the fall from 0.8472 to retest 0.8221 low. Nevertheless, firm break of 0.8308 minor resistance will turn bias back to the upside for stronger rebound to 0.8376 resistance instead.

In the bigger picture, the medium term down trend remains intact with EUR/GBP staying well inside the falling channel. Prior rejection by 55 W EMA (now at 0.8431) also affirm bearishness. Decisive break of 0.8201/8221 support zone will resume whole down trend from 0.9449 (2020 high) and carry larger bearish implications.

Daily Pivots: (S1) 1.6576; (P) 1.6613; (R1) 1.6668; More...

EUR/AUD's breach of 1.6631 resistance suggests that consolidation from 1.6800 has completed at 1.6355 already. Intraday bias is back on the upside for retesting 1.6800 resistance. Firm break there will resume whole rally from 1.5963. For now, risk will stay on the upside as long as 55 4H EMA (now at 1.6512) holds, in case of retreat.

In the bigger picture, with 1.5996 key support (2024 low) intact, larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5996 will indicate that such up trend has completed and deeper decline would be seen.

Daily Pivots: (S1) 0.9367; (P) 0.9384; (R1) 0.9397; More....

No change in EUR/CHF's outlook as range trading continues inside 0.9359/9516. Intraday bias remains neutral. On the downside, firm break of 0.9359 will revive the case that choppy rise from 0.9204 is merely a correction and has completed. Deeper fall should then be seen back to retest 0.9204 low. However, firm break of 0.9516 and sustained trading above 0.9481 fibonacci level will carry larger bullish implication and extend the rise from 0.9204.

In the bigger picture, sustained trading above 38.2% retracement of 0.9928 to 0.9204 at 0.9481 should confirm that whole fall from 0.9928 has completed at 0.9204. Further rally should then be seen back to 61.8% retracement at 0.9651 and above. However, another rejection by 0.9481 will keep outlook bearish for extending larger down trend through 0.9204 at a later stage.

Daily Pivots: (S1) 1.4297; (P) 1.4333; (R1) 1.4372; More...

Intraday bias in USD/CAD remains neutral, with focus on 1.4378 resistance. Firm break there will suggest that the correction from 1.4791 has completed, and turn bias back to the upside for retesting 1.4791. Below 1.4278 minor will bring turn bias to the downside for 1.4150. Firm break there will resume the fall from 1.4791 to 1.3946 cluster support (61.8% retracement of 1.3418 to 1.4791 at 1.3942).

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) 0.6283; (P) 0.6318; (R1) 0.6341; More...

Intraday bias in AUD/USD remains on the downside for the moment. Corrective rebound from 0.6087 could have completed ahead of 38.2% retracement of 0.6941 to 0.6087 at 0.6413. Deeper fall should be seen to retest 0.6087. For now, risk will stay on the downside as long as 0.6407 holds, in case of 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 0.6505) holds.

Daily Pivots: (S1) 1.0464; (P) 1.0496; (R1) 1.0518; More...

Outlook in EUR/USD is unchanged and intraday bias remains neutral. Price actions from 1.0176 are seen as a corrective pattern only. Strong resistance is expected from 38.2% retracement of 1.1213 to 1.0176 at 1.0572 to limit upside. On the downside, break of 1.0400 support will turn bias back to the downside for 1.0176/0210 support zone. However, decisive break of 1.0572 will raise the chance of reversal, and target 61.8% retracement at 1.0817.

In the bigger picture, immediate focus is on 61.8 retracement of 0.9534 (2022 low) to 1.1274 (2024 high) at 1.0199. Sustained break there will solidify the case of medium term bearish trend reversal, and pave the way back to 0.9534. However, reversal from 1.0199 will argue that price actions from 1.1274 are merely a corrective pattern, and has already completed.

Daily Pivots: (S1) 1.2635; (P) 1.2676; (R1) 1.2716; More...

Intraday bias in GBP/USD is back on the upside with breach of 1.2689 temporary top. Rise from 1.2099 should target 1.2810 resistance next. However, firm break of 1.2602 support will now indicate short term topping and turn bias back to the downside.

In the bigger picture, rise from 1.0351 (2022 low) should have already completed at 1.3433 (2024 high), and the trend has reversed. Further fall is now expected as long as 1.2810 resistance holds. Deeper decline should be seen to 61.8% retracement of 1.0351 to 1.3433 at 1.1528, even as a corrective move. However, firm break of 1.2810 will dampen this bearish view and bring retest of 1.3433 high instead.