Financial market overview on March 13, 2025

Inflation data for Germany, France and Spain will be published today. These figures are important indicators for forecasting the overall inflation dynamics in the eurozone next week. They can provide insight into possible inflation trends and influence market expectations regarding the future policy of the European Central Bank.The main focus in Sweden is on the February unemployment statistics (LFS). Last month, the figure rose sharply to 9.7%, which was the result of a significant influx of disappointed applicants into the active workforce. However, they were unable to find work, which led to a spike in the unemployment rate. In February, a partial rollback is expected – a decrease to 9.2%.Economic news and market eventsGeopolitics: Russian President Vladimir Putin commented on the 30-day truce proposed by the United States, expressing support for the idea, but noting the need to clarify a number of details. According to him, before the agreement can be implemented, "key issues" need to be resolved, which indicates a low probability of an early end to the conflict.USA: One of the leading Democrats of the Senate expressed support for the Republican bill aimed at preventing a government shutdown. He warned that the failure of the vote scheduled for Saturday could create conditions for the strengthening of Donald Trump's influence.Eurozone: Industrial production increased by 0.8% mom in January (0.6% expected, previous reading: -0.4%). However, the three-month rolling average (3M/3M) for the period from November 2024 to January 2025 remains 0.25% lower than the previous quarter. Despite signs of stabilization, the PMI in industry remains below 50, which indicates that the recession in the sector continues.Germany: Political differences in Berlin complicate the adoption of the budget. Despite a constructive dialogue between the parties, negotiations with the Greens on climate policy have reached an impasse, calling into question the vote scheduled for March 18.USA: Producer Price Index (PPI) for February was below forecasts at the headline level, but the underlying indicator indicates sustained pressure on prices. PPI increased by 3.2% YoY (versus 3.7% in January), while the decrease in prices for services was offset by a moderate increase in prices for goods. Initial and repeated applications for unemployment benefits decreased, indicating a stable labor market, despite concerns about layoffs in the federal sector.Sweden: The final inflation data for February confirmed the preliminary estimates. Inflation significantly exceeded expectations, while the CPIF baseline excluding energy resources was 3.0% YoY. The main contribution to the unexpected acceleration was made by the prices of food and leisure services.Stock market dynamicsStock indexes have entered a correction phase. The S&P 500 declined by 1.4%, entering the technical correction zone, while the Russell 2000 index lost 1.7%. Nasdaq continued to fall for the fourth week in a row, falling by 2%. Yesterday's dynamics of the sectoral indices were mixed: leading technology companies (MAG7) were among the outsiders along with real estate, while cyclical sectors, including raw materials and finance, showed relative stability.The general mood in the market remains uncertain, as the sell-off is not caused by a slowdown in the economy, but by a revaluation of the value of assets. Futures on American indices are showing growth today, which may lead to a technical rebound in the absence of new negative factors.Bonds and the foreign exchange marketThe weakening of risk appetite led to lower bond yields and falling stock indexes. During the week, the yield on 10-year German Bunds rose to 2.95%, but then fell back to 2.85%. Similarly, the yield on 10-year US Treasury bonds has fluctuated in the range of 4.15%-4.35%, and currently stands at 4.26%.In the foreign exchange market, the euro weakened against the dollar amid deteriorating market sentiment. The USD/SEK rally, which has been observed since the beginning of February, has stopped: the pair first fell below 10.00, but then rebounded to 10.20.

GBP/USD analysis on March 13, 2025The British pound is showing a moderate correction against the US dollar, trading near the 1.2960 mark. The weakening of the US currency supports the upward momentum of the pound, and additional strengthening drivers come from the UK macroeconomic statistics.The key event for the pound will be tomorrow's publication of GDP data for January (09:00 GMT+2). According to forecasts, the pace of economic growth could slow down: the monthly figure is expected to be 0.1% against 0.4% in December, and the annual rate below 1.5%. Confirmation of such data may strengthen the dovish mood of the Bank of England at the upcoming meeting on March 20, which in the future will limit the growth potential of the GBP.Yesterday's change in the Bank of England's liquid financing mechanism has an additional impact: the regulator increased the loan term for banks from weekly to semi–annual, and allocated a record 2,127 trillion pounds as part of the REPO operation, the largest amount of support since 2020.The US currency partially compensates for the losses of the beginning of the week, the USDX index is consolidating near 103.50. Investors' attention is focused on the US inflation report published yesterday.February data showed a weakening of price pressure: consumer inflation slowed to 0.2% mom (the previous figure was 0.4%) and 2.8% yoy (the previous value was 3.0%). The core CPI index also dropped to 3.1% from 3.3%. These data confirm the trend towards stabilization of inflation, which in the long term supports expectations that the US Federal Reserve's interest rates will remain at 4.25–4.50% at next week's meeting.Technical analysis of GBP/USD for todayOn the daily chart, the currency pair is correcting below the resistance line of the ascending channel with the boundaries of 1.3050–1.2750.Indicators confirm the dominance of buyers:• On the Alligator indicator, fast EMAS expand the distance from the signal line, which indicates the continuation of the upward trend.• The awesome oscillator (AO) indicator forms correction bars in the positive zone, strengthening the buy signal.Trading recommendationsLong positions: after a steady breakdown of the 1.3000 level up, the target is 1.3180. The stop loss is 1.2940.Short positions: when the support breaks down to 1.2920, the target is 1.2760. The stop loss is 1.2980.

USD/JPY analysis on March 13, 2025During Thursday's Asian trading, USD/JPY corrects positions and tests the 147.85 level for a downward breakout. Market participants are waiting for new fundamental factors that may set the direction for further movement.Producer Price Index (PPI) data for February will be released in the United States at 14:30 (GMT+2). According to forecasts, the annual rate may slow down from 3.5% to 3.3%, and the monthly rate from 0.4% to 0.3%. The core PPI index, which excludes food and energy resources, is likely to remain at 3.6% year-on-year and 0.3% month-on-month.In addition, the market is awaiting the publication of statistics on applications for unemployment benefits in the United States. According to expectations, the number of initial requests for the week of March 7 will increase from 221 thousand to 225 thousand, and repeat requests (as of February 28) — from 1,897 million to 1,900 million. On Friday at 16:00 (GMT+2), the consumer confidence index from the University of Michigan will be released, which is projected to decrease from 64.7 to 63.4 points, which may affect investor sentiment.Investors continue to analyze data on Japan's economic growth. Updated GDP statistics for the fourth quarter of 2024 showed that the economy grew by only 0.6% instead of the expected 0.7%, and in annual terms — by 2.2% instead of 2.8%. The slowdown in growth complicates the task of the Bank of Japan, which is considering a gradual curtailment of soft monetary policy.USD/JPY technical analysis for todayThe Bollinger indicator on the daily chart is trying to reach a neutral position. The MACD continues to grow and maintains a buy signal. Stochastic is moving up more actively and is located in the middle zone of the indicator.Trading recommendationsSales may be relevant after a confident breakdown down to 147.00. The target will be 145.00. Stop loss — 148.00.If growth resumes and gains above 148.55, purchases with a target level of 150.00 are possible. Stop loss is 147.90.

In Thursday's Asian session, USD/CHF shows mixed dynamics, consolidating near the level of 0.8815. Market activity remains moderate, despite the release of important data on inflation in the United States on Wednesday.The annual consumer price index (CPI) slowed to 2.8% in February from 3.0% in January, which was lower than the forecast of 2.9%. On a monthly basis, CPI growth was 0.2% against 0.5% previously, with expectations of 0.3%. The core index, which excludes food and energy, also slowed: the annual rate decreased from 3.3% to 3.1%, and the monthly index decreased from 0.4% to 0.2%.Despite this, market expectations regarding the Fed's monetary policy remain stable. Analysts still expect two or three key rate cuts in 2025, starting in June.Today at 14:30 (GMT+2), the market's attention will be focused on data on the producer price index (PPI) in the United States. The annual rate is expected to slow down from 3.5% to 3.3%, and the monthly rate from 0.4% to 0.3%. The base PPI, excluding food and energy, is likely to remain at the same levels: 3.6% in annual terms and 0.3% in monthly terms.Investors will also keep an eye on statistics on applications for unemployment benefits. It is predicted that the number of initial applications for the week of March 7 will increase from 221.0 thousand to 225.0 thousand, and repeat applications (for the week of February 28) — from 1.897 million to 1.900 million.On Friday at 16:00 (GMT+2), the March data on the consumer confidence index from the University of Michigan will be published. The indicator is expected to decrease from 64.7 to 63.4 points.Switzerland will publish February data on producer and import price indices at 09:30 (GMT+2). The monthly index is expected to grow slightly from 0.1% to 0.2%, while the annual index is likely to remain at -0.3%. These data are unlikely to have a significant impact on the monetary policy of the Swiss National Bank.USD/CHF technical analysis for todayOn the USD/CHF daily chart, the Bollinger Band indicator indicates a continuation of the downtrend. The MACD indicator is trying to turn up, forming a weak buy signal. Stochastic shows more confident growth, being in the middle part of the workspace.Trading recommendations- Short positions: can be considered after a confident breakdown down to the level of 0.8800 with a target of 0.8758. The stop loss is 0.8827.- A rebound from the 0.8800 level as support, followed by an upward breakout of 0.8827, may be a signal for purchases with a target of 0.8875. The stop loss is 0.8800.

FOREX Fundamental analysis for EUR/USD on March 13, 2025Donald Trump intends to respond to the actions of the European Union, which imposed duties on American goods worth €26 billion in response to US tariffs on steel and aluminum. The US president believes that the EU was created to benefit at the expense of the United States, and is ready to act on the principle of "an eye for an eye." Despite the growing tension, the EUR/USD pair has not yet shown a significant reaction to these events.The sharp rise in the euro against the dollar has forced financial institutions to revise their forecasts. For example, UBS, which previously expected parity in the EUR/USD pair, now forecasts growth to 1.12 by the end of the year. Among the key factors are Trump's tolerance for a possible recession in the United States, progress in Europe's fiscal policy, and worsening trade relations between the United States and Canada.However, Nordea adheres to the opposite point of view, expecting the pair to decline to 1.04 within three months. The bank's analysts believe that trade wars and fiscal incentives in the United States can support the American economy, while tariffs will slow down the growth of its competitors.US inflation data for February showed a slowdown in consumer price growth to 0.2% in monthly terms. This has increased expectations that the Fed may resume its rate-cutting cycle as early as May. The news put pressure on the dollar. However, the market is starting to take into account that the tariffs imposed may accelerate the growth of the CPI and PCE indices in the future, which will change the current disinflationary trend.Donald Trump's policies continue to bring uncertainty to the markets. If investors tried to predict which tariffs would be lifted during his first term, they are now preparing for short-term difficulties, which, according to the administration, are necessary to strengthen the US position.Although markets interpret these difficulties as harbingers of a recession, it is too early to talk about a downturn in the US economy. Excessive pessimism is embedded in the current dollar quotes, while optimism about the euro related to fiscal incentives in Europe may be overestimated. It will take time to implement a positive scenario for the euro, especially given the need to amend the German Constitution.Perspectives and recommendationsGiven the growing risks of a trade war and overestimated optimism about the euro, the correction potential of the EUR/USD pair looks significant. This should be taken into account in forex trading strategies. It is recommended to consider the possibility of strengthening short positions opened earlier from the level of 1,089. 1.0825 and 1.0715 can be considered as initial targets.

Overnight, the Canadian dollar experienced sharp volatility after US President Donald Trump announced a possible increase in duties on steel and aluminum imports from Canada to 50%. This unexpected tightening of trade policy caused a sharp weakening of the loonie, as markets feared an imminent blow to Canadian exports.However, the situation changed after Ontario Premier Doug Ford announced the suspension of surcharges on electricity exports to the United States and scheduled a meeting with U.S. Commerce Secretary Howard Latnick. After that, Trump made it clear that he could reconsider the tariff increase, which helped the Canadian dollar partially regain its lost ground.Tariff uncertainty and Bank of Canada rate expectationsDespite the temporary easing of pressure, tariff-related uncertainty continues to negatively affect business sentiment on both sides of the border. Companies and consumers are concerned about the possible economic consequences of trade restrictions, which increases pressure on the Bank of Canada (BoC).The markets have already priced in a 25bp reduction in the key rate at today's BoC meeting. However, market participants now expect at least two additional rate cuts before the end of the year, as the regulator is likely to seek to mitigate the effects of the trade conflict and support economic growth.Special attention today will be focused on the rhetoric of the Bank of Canada: its forecast and comments can set the tone for the further movement of the Canadian dollar and determine expectations for future monetary policy decisions.USD/CAD technical analysisFor (H4), USD/CAD declined to the level of 1.4541, and the intraday sentiment remains neutral for now. In general, the current movement from 1.4791 looks like a corrective structure, where the recovery from 1.4150 can be considered as the second phase of correction.If the quotes break through 1.4541, the buyers will open the way to 1.4629, the level of 100% projection of the movement of 1.4150–1.4541 from 1.4238. However, in the broader perspective, strong resistance near 1.4791 may limit growth, which will lead to the formation of a third wave of decline.On the other hand, if the pair falls below 1.4238, we will get a signal for the beginning of the third downward wave, which is aimed at breaking the support of 1.4150.In the long-term horizon, according to the Daily, the uptrend remains in force after the breakdown of the key resistance zone of 1.4667/89 (the highs of 2020 and 2015). The next growth target is the 1.4993 level, which is a 100% projection of the 1.2401–1.3976 movement from 1.3418.This scenario will be relevant as long as the support of 1.3976 (2022 maximum) remains stable, even if the pair goes into a deep correction.

Today, the key event in the financial markets will be the publication of the US Consumer Price Index (CPI) for February. According to forecasts, the overall CPI index grew by 0.2% on a monthly basis (against 0.5% in January) and amounted to 2.8% year-on-year (against 3.0% previously). The core CPI index is expected to reach 0.3% mom and 3.2% YoY.Markets are closely following the report after the unexpectedly high January reading. An important question remains whether this was a temporary effect related to the revision of prices at the beginning of the year, or whether it indicates continued inflationary pressures.The Bank of Canada (BoC) will also hold a meeting today, at which the interest rate is expected to decrease by 25 bps to 2.75%. This step is aimed at protecting the Canadian economy from the effects of US tariffs. The market consensus is also leaning towards this decision, as the slowdown in the economy requires a more lenient monetary policy.Main newsJapan: wage growthMajor Japanese corporations, including Toyota, have agreed to fully meet the demands of trade unions for wage growth, which averaged 6.1%. This is the most significant growth in recent decades. Now investors' attention is shifting to small and medium–sized enterprises, which form the backbone of the Japanese economy - will they be able to afford similar increases?Strong wage growth supports domestic demand and strengthens the case for further rate hikes by the Bank of Japan (BoJ).Ukraine and the USA: Truce and strategic agreementsThe US and Ukrainian delegations have completed negotiations, following which Kiev agreed to a 30-day truce mediated by Washington. In response, the United States will restore military assistance and resume intelligence sharing.The parties also reached an agreement on the development of Ukraine's critically important mineral resources, which could enhance the region's investment attractiveness. However, the final approval of the deal depends on Russia's reaction.USA: increase of tariffs on metalOn March 1, 25% tariffs on steel and aluminum imports came into force, which increases the risk of a recession in the United States. President Trump initially threatened to raise tariffs to 50% on imports from Canada, but then backed down when Ontario agreed to cancel retaliatory measures.This uncertainty caused sharp fluctuations in financial markets, which were already under pressure due to Washington's large-scale protectionist steps.US labor market dataJOLTs showed 7.74 million job openings in January, which is higher than expected (7.63 million). At the same time, the number of involuntary layoffs has decreased, which may have a positive impact on consumer confidence.However, the NFIB index, which measures the mood of small businesses, continued to fall for the third month in a row, reaching its lowest level since the beginning of the election campaign. This reflects the concern of entrepreneurs about tariff policy and possible cuts in government spending.Stock markets: continued declineUS stock indexes closed down again.• S&P 500 fell 0.8%, approaching the correction zone• Dow Jones lost 1.1%• Nasdaq declined by only 0.2%, while the Russell 2000 index even showed a slight increase (+0.2%)Defensive sectors, including healthcare and consumer goods, were under the most pressure, while cyclical assets showed less drawdown. European stocks also fell sharply (Stoxx 500 -1.7%), but the morning rise in futures indicates a possible rebound amid news of a truce in Ukraine.Bonds and the foreign exchange marketIn the foreign exchange market, the euro, the Swedish krona and the Norwegian krone became the growth leaders, while the Japanese yen weakened slightly.Yields continued to rise in the bond market:• The yield on 10-year German bonds increased by 6 bps, while 2-year bonds decreased by 2 bps.• In the US, 10-year Treasury bonds also rose by 6 bps, leading to increased rate volatilityThe spread between Italian and German bonds remained stable, indicating that there was no significant flight to safe haven assets.ResultsToday, markets are focused on US inflation data and the Bank of Canada's decision. Stock markets remain under pressure, but the morning rise in futures indicates a potential reversal. The foreign exchange market supports the euro and Scandinavian currencies, while American bonds remain highly volatile.

FOREX Fundamental analysis for EUR/USD on March 12, 2025Despite investors' gloomy forecasts about the US economy due to Donald Trump's tariff policy, the actual data shows a different picture. The labor market remains strong, and inflation is slowing down, which corresponds to the "soft landing" scenario that supporters of the dollar have long dreamed of. However, the question arises: has the EUR/USD rally gone too far?In January, the number of vacancies in the United States increased, while the number of layoffs decreased, which, along with an increase in employment, confirms the stability of the labor market. Bloomberg experts expect that inflation in February will slow down from 0.5% to 0.3% in monthly terms and create conditions for the resumption of the Fed's monetary policy easing cycle. Derivatives predict a reduction in the federal funds rate by 80 basis points by the end of 2025, although a week ago this figure was 60 points.Investor concerns have intensified after Donald Trump's statements about a possible recession and a "transition period" in the US economy. The president dismissed the collapse of stock indexes, although he previously considered them an indicator of the success of his policies. This caused panic in the markets, which was reflected in the growing expectations of monetary expansion.The collapse of the S&P 500 forced Trump to soften his rhetoric. He said he expects a boom in the economy and sees no signs of recession. At a meeting with representatives of large businesses, the president stressed that tariffs are only the first step, and the real victory will be achieved when production starts returning to the United States. White House officials explained the "transition period" as a transition from the chaos created by the previous administration to stability under Trump's leadership.EUR/USD prospectsIn my opinion, the markets are overly scared. There is still a long way to go before a real recession in the US economy, and expectations of large-scale monetary easing by the Fed seem overstated. In addition, it is unclear whether Friedrich Merz will be able to convince the Green Party to support changes in the fiscal brake. This can lead to profit-taking on long EUR/USD positions.To continue the growth of the EUR/USD pair, a symbiosis of an optimistic scenario for Germany and an extremely pessimistic one for the United States is needed, which is unlikely so far. Doubts can trigger a pullback to an uptrend. A drop below the 1.0890 pivot level may be a signal for short-term sales.