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Author: The Forex Feed
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It gets even worse for Canada as China puts on tariffs
Politics and diplomacy can be an amazing thing. Sometimes when you’re in the middle you can leverage both sides and get good deals with everyone. Other times, both sides use you as a punching bag.
After getting beaten up by Canada’s ‘best friend’ all week in the USA, China decided to pile on over the weekend with tariffs on:
- Rapeseed (canola) — 100% tariff
- oilcakes
- peas
- aquatic products
- pork
The tariffs go into effect on March 20.
This is retaliation for Canadian tariffs on Chinese autos, steel and aluminum; which was something Canada did at the behest of the United States.
Trudeau has salvaged some of his reputation by standing up to the United States this year but on Sunday, he will be replaced and hopefully the new Liberal leader can better manage the relationship with trading partners.
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Colombia Consumer Price Index (MoM) came in at 1.14%, above forecasts (1%) in February
Colombia Consumer Price Index (MoM) came in at 1.14%, above forecasts (1%) in February
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N. Macedonia Inflation Accelerates Further, Industrial Production Rises
Consumer price inflation in North Macedonia increased again in February, while the industrial production grew in January, separate reports from the statistical office showed on Friday.
The consumer price index rose 5.0 percent year-on-year following a 4.9 percent increase in January. Compared to the previous month, the CPI rose 0.5 percent.
Another report from the statistical office showed that industrial production grew 1.4 percent year-on-year in January, led by a 4.4 percent increase in the manufacturing output.
The statistical office also revealed that the external trade deficit in January totaled MKD 16.626 billion with exports rising 5.0 percent year-on-year and imports growing 5.9 percent.
Separate data from the statistical office showed that the unemployment rate fell to 11.9 percent in the fourth quarter of 2024 from 12.3 percent in the previous three months.
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Economic News
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Weekly Market Outlook: Trigger Uncertainty, Nasdaq in Correction & US CPI Data Ahead
- Markets experienced turmoil this week, driven by investor concerns over the Trump administration’s tariff policies.
- The US dollar is on track for its worst week in over a year, Nasdaq entered a correction.
- The Bank of Canada may cut rates due to tariff impacts and economic concerns.
- US CPI is also due in the week ahead, will it rescue the ailing US Dollar?
Week in Review: Fear is Rising but US Labor Market Remains Steady for Now
Markets have struggled this week as fears are rising. Wall Street is on edge as investors say the Trump administration’s mixed signals on rolling back tariffs are creating confusion instead of easing concerns.
The S&P 500 has dropped 4.3% since President Trump took office on January 20, with tariffs being a major worry for investors. Many believe tariffs could hurt economic growth and lead to higher prices.
On Thursday, stocks faced a sharp selloff after Trump announced a one-month exemption for Canada and Mexico from the 25% tariffs he introduced earlier in the week. The Nasdaq fell 2.6% that day and has been in a correction since its record high on December 16.
This latest tariff move gave limited relief to stocks, as Wall Street remains unsure about how a tariff-driven trade policy might affect the economy.
The Nasdaq 100 has now officially entered corrective territory with losses of 10% from its all time high.
Trump believes tariffs can boost revenue, growth, and help in negotiations with other countries. However, investors are worried they may hurt consumer confidence and cause businesses to hold back on spending.
Sources: LSEG Datastream
A brief pause came on Friday with the US jobs data release. The U.S. added 151,000 jobs last month, according to the Labor Department, following a revised increase of 125,000 jobs in January. Economists had predicted a rise of 160,000 jobs, compared to the earlier reported January figure of 143,000.
On the FX Front the dollar showed its vulnerabilities and is on course for its worst week in over a year. The dollar has dropped about 5% since President Trump took office in January and is now at a four-month low.
Concerns about U.S. growth, fueled by trade tariff news, have hurt the dollar. Meanwhile, Germany’s boost in spending has improved Europe’s economic outlook, leading investors to move their money to economies with stronger growth prospects.
The chart below shows how speculators have slashed their bets on a bullish US Dollar in recent weeks.
Source: LSEG
On the commodities front, Gold has rebounded this week to trade back above the $2900/oz mark, but continues to struggle to pierce through resistance at the $2924 handle. As we have discussed for weeks now, the geopolitical situation coupled with tariff uncertainty is likely to keep the precious metal supported.
Oil prices faltered this week thanks to the OPEC+ announcement and growth fears. For a full breakdown read Brent Oil Price Analysis: Six-Month Lows Amid OPEC Output, Tariffs & Russia-Ukraine Negotiations
The Week Ahead: Tariffs at the Forefront. Will Trump Follow Through?
Asia Pacific Markets
The main focus this week in the Asia Pacific region for me is China’s Two Sessions and inflation data.
China’s Two Sessions ends next Tuesday, with key policy updates expected on stimulus and reforms. February inflation data is due Sunday, and the Lunar New Year impact may push consumer inflation to -0.3% year-on-year, while producer inflation is also expected to stay negative. Credit data for February is expected next week, with markets predicting higher overall financing and new loans in RMB.
In Japan, I do expect growth in labor earnings to slow, mainly due to smaller bonus payments. January’s inflation spike will likely push real earnings into the negative. Fourth quarter GDP may be revised down from 0.7% to 0.5% because capital spending was weaker than expected.
Markets are still focused on Japan as further interest rate hikes from the Bank of Japan remain on the table.
Europe + UK + US
In developed markets, the US inflation is back in the limelight. The data however, might be overshadowed once more by the ongoing tit-for-tat tariff developments which are set to continue.
U.S. consumer price inflation is expected to remain high in the coming week, with a 0.3% month-on-month increase forecasted. Business surveys show some companies are raising prices ahead of potential tariffs. Food and energy costs are also pushing inflation higher, even though gasoline prices have recently dropped.
However, markets are currently more concerned about slowing growth, government spending cuts, and the risk of reduced purchasing power if tariffs lead to higher prices. Over the past three weeks, expectations have shifted from predicting one small rate cut this year to three. A 0.3% inflation figure is unlikely to change this outlook.
The EU and UK have a bit of breather on the data front next week with a speech by ECB President Christine Lagarde on Wednesday the highlight.
The Bank of Canada has already cut rates by 200 basis points due to weak growth and low inflation. U.S. tariffs on Canadian imports are adding fears of a recession. Governor Macklem warned that a long trade conflict could severely damage the economy, which their models show would shrink before recovering on a path 2.5% below earlier forecasts.
Since 76% of Canadian exports go to the U.S., equal to 20% of GDP, the risks are high. With 6.6% unemployment and 1.9% inflation, the BoC may cut rates by another 25 basis points on Wednesday.
For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Chart of the Week
This week’s focus is on the Nasdaq 100 chart as the index had fallen as much as 10% from its all time highs this past week.
Friday did however bring a significant recovery from the weekly low of 19733, with the index rising to trade at 20131 at the time of writing. That is a near 2% percent rise from the weekly low.
Is this a temporary pullback or are the bulls finally back?
Time will tell, but given the amount of uncertainty and concerns from companies, there is a real possibility that there may be more downside ahead.
Immediate resistance rests at the 20326 handle which also houses the 200-day MA and could prove a tough nut to crack. If the index is capable of recording a daily candle close above this level then a run toward 20484 and 20790 become a real possibility.
A break of the psychological 20000 handle though could be key and could lead to a longer term selloff down to the mid 18000’s.
Support may be found at 19750 and 19123.
Nasdaq 100 Daily Chart – March 7, 2025
Source:TradingView.Com (click to enlarge)
Key Levels to Consider:
Support
Resistance
Follow Zain on Twitter/X for Additional Market News and Insights @zvawda
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
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Argentina Industrial Output n.s.a (YoY): 7.1% (January) vs previous 8.4%
Argentina Industrial Output n.s.a (YoY): 7.1% (January) vs previous 8.4%
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Rate decisions will look at jobs, economic activity
Federal Reserve Governor Michelle Bowman, regarded as one of the bank’s most hawkish policymakers, indicated that she might place greater emphasis on labour market indicators when considering future policy decisions.
Key Quotes
Labor market, economic activity will become a larger factor in US central bank policy discussions going forward.
Shocks, structural changes since Covid-19 pandemic may have masked transmission of Fed policy to the economy.
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Muted Market Response to NFP, Euro Holds Strong While Loonie Struggles
The much-anticipated U.S. non-farm payrolls report came and went without much impact to the markets. With job growth largely in line with forecasts, the data signaled a stable labor market and the balanced outcome offers little guidance to Fed policymakers, who will continue weighing inflation trends, fiscal uncertainties, and global trade risks before committing to any policy shift. Investors, for their part, appear content to sit on the sidelines until more definitive signals emerge, resulting in subdued market reactions.
In contrast, Canadian dollar faltered after domestic employment data revealed a near standstill in job growth. Despite a short-lived uplift from fresh tariff exemptions, Loonie found itself on the back foot again, as stagnant employment reignited concerns over economic momentum. Whether the currency will face further downward pressure in the final trading hours of the week may depend heavily on broader risk sentiment, which has already pushed Australian and New Zealand Dollars lower.
Meanwhile, European majors are holding their ground, with Euro on track to end the week as the best performer. Sterling and Swiss Franc also remain well-supported, benefiting from the rally tied to Europe’s sweeping fiscal and defence initiatives.
In Europe, at the time of writing, FTSE is down -0.25%. DAX is down -1.79%. CAC is down -1.19%. UK 10-year yield is down -0.053 at 4.569. Germany 10-year yield is down -0.046 at 2.789. Earlier in Asia, Nikkei fell -2.17%. Hong Kong HSI fell -0.57%. China Shanghai SSE fell -0.25%. Singapore Strait Times fell -0.07%. Japan 10-year JGB yield rose 0.012 to 1.524.
US NFP rises 151k in Feb, slightly below expectations
US non-farm payroll employment increased by 151k in February, just slightly below expectations of 156k, and broadly in line with the 12-month average of 168k.
Unemployment rate edged up from 4.0% to 4.1%. Unemployment rate has remained in a narrow range of 4.0% to 4.2% since May 2024. Labor force participation rate slipped from 62.6% to 62.4%.
Average hourly earnings rose 0.3% mom, in line with forecasts, while the average workweek remained unchanged at 34.1 hours.
Canada’s job growth stalls, unemployment rate steady at 6.6%
Canada’s labor market was stagnant in February, with employment rising by just 1.1k, falling far short of the expected 17.8k increase.
Unemployment rate held steady at 6.6%, better than expectation of 6.7%, while the labor force participation rate dropped from 65.5% to 65.3%, marking its first decline since September 2024. A notable contraction was seen in total hours worked, which fell by -1.3% mom.
Despite the weak employment figures, wage growth accelerated, with average hourly wages rising 3.8% yoy, up from January’s 3.5% gain.
China’s exports rise 2.3% yoy, imports fall -8.4% yoy
China’s exports rose just 2.3% yoy to USD 539.9B in the January–February period, coming in below forecasts of 5.0% yoy and down sharply from December’s 10.7% yoy.
Meanwhile, imports sank -8.4% yoy to USD 369.4B, missing expectations of 1.0% yoy growth and marking a noticeable drop from December’s 1.0% yoy.
As a result, trade balance resulted in USD 170.5B surplus exceeding projections of USD 147.5B.
EUR/USD Mid-Day Outlook
Daily Pivots: (S1) 1.0749; (P) 1.0801; (R1) 1.0837; More…
EUR/USD’s rally from 1.0176 resumed after brief retreat, and intraday bias is back on the upside for 161.8% projection of 1.0176 to 1.0531 from 1.0358 at 1.0932 next. On the downside, below 1.0764 minor support will turn bias neutral and bring consolidations. But downside of retreat should be contained above 55 4H EMA (now at 1.0613) to bring another rally.
In the bigger picture, the strong break of 55 W EMA (now at 1.0668) suggests that fall from 1.1274 (2024 high) has completed as a three wave correction to 1.0176. That came after drawing support from 0.9534 (2022 low) to 1.1274 at 1.0199. Rise from 0.9534 is still intact, and might be ready to resume through 1.1274. This will now be the favored case as long as 1.0531 resistance turned support holds.
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Yen extends gains, markets eye US nonfarm payrolls
- Japanese yen extends rally for a third consecutive day
- BoJ’s Uchida says rate hikes still on the table despite tariff concerns
- US nonfarm payrolls expected to edge slightly
The Japanese yen has extended its gains on Friday. In the European session, USD/JPY is trading at 147.79, down 0.13% on the day.
It was a light calendar in Japan this week but that didn’t stop the yen from taking advantage of a broadly weaker US dollar. The yen has posted gains of 1.9% against the US dollar this week and strengthened as much as 147.19 to the dollar, its best level since Sep. 2024.
Will US tariffs target Japan?
Central bankers are watching nervously as US President Donald Trump has escalated trade tensions by imposing tariffs on China and a host of other countries. The US is yet to target Japan but Trump has complained about nations that have a trade surplus with the US, which include Japan. This means that Japan is at risk for US tariffs, which would hurt Japan’s economy and likely boost inflation.
This turbulent backdrop could complicate the Bank of Japan’s plans to continue raising interest rates. Deputy-Governor Shinichi Uchida appeared to dispel these concerns in a speech on Wednesday. Uchida sounded upbeat about the economy and said that rate hikes would continue if the economy and inflation evolved according to the BoJ’s projections.
US nonfarm payrolls expected to rise slightly
The market will be keeping a close eye on today’s US nonfarm payrolls. The labor market has been cooling down gradually, which is music to the ears of the Federal Reserve as it looks to guide the US economy to soft landing. The market estimate for February stands at 160 thousand, compared to 143 thousand in January. Wage growth is expected to rise 0.3% m/m in February, down from 0.5% in January. Annualized wage growth is expected to remain unchanged at 4.1%.
Only a few months ago, the market was expecting a series of rate cuts in 2025 from the Fed, but sticky inflation and solid economic growth have changed the rate outlook dramatically. The Fed is widely expected to hold rates at the March 19 meeting and there is a good chance that we won’t see any further rate cuts this year. The Fed’s rate path will largely depend on inflation and the strength of the labor market.
USD/JPY Technical
- 147.09 and 146.19 are providing support
- 148.21 and 149.11 are the next resistance lines
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
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XAU/USD: Elliott wave analysis and forecast for 07.03.25 – 14.03.25
The article covers the following subjects:
Major Takeaways
- Main scenario: Once the correction ends, consider long positions above the level of 2583.80 with a target of 3100.00 – 3300.00. A buy signal: the price holds above 2583.80. Stop Loss: below 2550.00, Take Profit: 3100.00 – 3300.00.
- Alternative scenario: Breakout and consolidation below the level of 2583.80 will allow the pair to continue declining to the levels of 2370.00 – 2078.42. A sell signal: the level of 2583.80 is broken to the downside. Stop Loss: above 2610.00, Take Profit: 2370.00 – 2078.42.
Main Scenario
Consider long positions above the level of 2583.80 with a target of 3100.00 – 3300.00 once the correction is formed.
Alternative Scenario
Breakout and consolidation below the level of 2583.80 will allow the pair to continue declining to the levels of 2370.00 – 2078.42.
Analysis
The ascending fifth wave of larger degree 5 is presumably developing on the weekly chart, with wave (5) of 5 forming as its part. The third wave of smaller degree 3 of (5) appears to continue unfolding on the daily chart, within which wave iii of 3 is completed. On the H4 time frame, the local corrective wave iv of 3 is presumably developing, with wave (a) of iv forming as its part. If the presumption is correct, the XAU/USD pair will continue to rise to 3100.00 – 3300.00 once the corrective wave iv of 3 is completed. The level of 2583.80 is critical in this scenario, as a breakout will enable the pair to continue falling to the levels of 2370.00 – 2078.42.
This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.
Price chart of XAUUSD in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.
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USD/JPY Outlook: Traders Flock to Yen Amid Rising Trade Worries
- The USD/JPY outlook indicates increased demand for the safe-haven yen.
- Market participants dumped risky assets in the panic that followed Trump’s new tariffs.
- The US will release its crucial nonfarm payroll report.
The USD/JPY outlook indicates increased demand for the safe-haven yen amid escalating fears of the impact of Trump’s tariffs on the global economy. Meanwhile, market participants are looking forward to the nonfarm payrolls report for clues on Fed policy.
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The yen strengthened as market participants dumped risky assets in the panic that followed Trump’s new tariffs. The US president implemented tariffs on Canada, Mexico, and China. Furthermore, he promised a reciprocal tariff starting in April that will affect more countries. These policy changes ignited trade wars that have dimmed the outlook for the global economy. The US economy is also under threat since many companies depend on imports and exports. A decline in trade will, therefore, leave them in the dark.
Furthermore, the yen remained strong due to the recent rise in BoJ rate hike expectations. Higher inflation in Japan has convinced speculators that the Bank of Japan will implement more rate hikes. Therefore, traders are bullish on the yen.
Meanwhile, the US will release its crucial nonfarm payroll report, showing the state of employment. Soft data will raise Fed rate cut bets, further hurting the greenback. On the other hand, a rebound in employment would allow the dollar to recover.
USD/JPY Forecast:
- US average hourly earnings m/m
- US nonfarm employment change
- US unemployment rate
- Fed Chair Powell Speaks
USD/JPY technical outlook: Downtrend nears the 147.00 key level
USD/JPY 4-hour chart On the technical side, the USD/JPY price is nearing the 147.00 support level, a new low in the downtrend. The price trades far below the 30-SMA, showing bears are in the lead. At the same time, the RSI trades below 50, indicating solid bearish momentum.
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USD/JPY has maintained its downtrend, making lower highs and lows. However, bulls have also tried several times to take control by breaking above the 30-SMA. Still, the price has reached fresh lows. If this momentum continues, bears will break below the 147.00 key level to make new lows.
However, before the break, the price might pause or pull back to retest the 30-SMA. The bearish bias will remain strong as long as the price stays below the 30-SMA with the RSI under 50.
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French Trade Gap Widens In January
France’s trade deficit increased sharply in January as exports fell amid an increase in imports, data from the customs office showed on Friday.
The trade gap rose to EUR 6.54 billion from EUR 3.48 billion in December. In the same period last year, the trade deficit totaled EUR 6.87 billion.
Exports declined 4.6 percent on a monthly basis, while imports climbed 1.2 percent in January.
Year-on-year, both exports and imports rose by 2.1 percent and 0.5 percent, respectively.
The energy balance deteriorated slightly by EUR 0.1 billion in January after a continuous improvement since June 2024, the customs office said.
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Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
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US Dollar Index breaks below 104.00 as Treasury yields fall ahead of Nonfarm Payrolls
- The US Dollar Index depreciates as market expectations grow for more aggressive Fed rate cuts amid US growth concerns.
- President Trump exempted Mexican and Canadian goods under the USMCA from his proposed 25% tariffs.
- The US Nonfarm Payrolls is projected to show job growth, with employment rising to 160K in February.
The US Dollar Index (DXY), which tracks the US Dollar (USD) against six major currencies, continues its losing streak for the fifth consecutive day, pressured by declining US Treasury yields. Market expectations of more aggressive Federal Reserve (Fed) rate cuts amid concerns over US economic growth are contributing to the weakness. The DXY is trading around 103.90 with 2- and 10-year yields on US Treasury bonds standing at 3.94% and 4.24%, respectively, during the early European hours on Friday.
Traders are closely watching global trade developments, particularly Canada’s decision to delay its second round of retaliatory tariffs on US products until April 2. This move follows US President Donald Trump’s exemption of Mexican and Canadian goods under the USMCA from his proposed 25% tariffs.
On the labor market front, US Initial Jobless Claims for the week ending March 1 fell to 221K, down from 242K the previous week, according to the US Department of Labor (DOL). The figure came in below market expectations of 235K. Meanwhile, the upcoming US Non-Farm Payrolls (NFP) report is projected to show a modest rebound, with job additions expected to rise to 160K in February, up from 143K in January.
Atlanta Fed President Raphael Bostic commented on Thursday that the US economy remains in a state of flux, making it difficult to predict future developments. Bostic reiterated the Fed’s commitment to bringing inflation down to 2% while minimizing labor market disruptions. He also stressed the importance of business sentiment in shaping monetary policy decisions.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Euro.
USD EUR GBP JPY CAD AUD NZD CHF USD -0.31% -0.10% -0.12% 0.04% 0.46% 0.35% -0.25% EUR 0.31% 0.20% 0.21% 0.35% 0.78% 0.67% 0.06% GBP 0.10% -0.20% 0.00% 0.14% 0.57% 0.46% -0.11% JPY 0.12% -0.21% 0.00% 0.17% 0.60% 0.49% -0.08% CAD -0.04% -0.35% -0.14% -0.17% 0.42% 0.32% -0.25% AUD -0.46% -0.78% -0.57% -0.60% -0.42% -0.10% -0.66% NZD -0.35% -0.67% -0.46% -0.49% -0.32% 0.10% -0.56% CHF 0.25% -0.06% 0.11% 0.08% 0.25% 0.66% 0.56% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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Risk Aversion Creeps Back as Markets Unconvinced by Trump’s Temporary Tariff Exemptions
Risk sentiment in the forex markets appears to be tilting towards risk aversion in Asian trading, marking a shift from the broad Dollar selloff earlier in the week. Overnight, US President Donald Trump granted temporary tariff exemptions for Canadian and Mexican goods under the USMCA, delaying a full-scale implementation until April 2. While this provided some relief for Canadian Dollar, overall market sentiment remained fragile, with major US equity indexes closing in the red, led by losses in NASDAQ.
The temporary exemption covers roughly 50% of Mexican imports and 38% of Canadian imports. However, Trump’s move has done little to inspire confidence, as markets remain skeptical about his erratic trade policies. Investors have become wary of his inconsistent messaging—one day insisting on strict tariff enforcement, the next day granting exemptions. This unpredictability has left traders cautious, unsure of how to position for potential future shifts in trade policy.
Despite the tariff delay, risk-sensitive currencies like Australian and New Zealand Dollars have come under renewed selling pressure in Asia. The broader market focus has shifted toward the April 2 deadline, when Trump’s proposed “reciprocal tariffs” are set to take effect. These tariffs will target foreign nations that impose import taxes on US goods, keeping trade war fears firmly in play.
Adding to market unease is the upcoming US non-farm payrolls report. With sentiment already on shaky ground, any significant weakness in the jobs data could deepen risk aversion. While a weaker NFP might increase expectations for a Fed rate cut, traders are growing concerned that deteriorating labor market conditions could signal a sharper economic slowdown. This dynamic suggests that even rising Fed cut bets may not be enough to offset broader recession fears.
So far for the week, Dollar remains the worst-performing currency, struggling to find any solid footing. Canadian Dollar follows closely as the second weakest, alongside Australian Dollar. On the stronger side, Euro continues to outperform, driven by optimism over fiscal expansion plans in Europe. Sterling and Swiss Franc are also holding firm, while Yen and Kiwi are settling in the middle.
In Asia, the time of writing, Nikkei is down -2.07%. Hong Kong HSI is down -0.06%. China Shanghai SSE is up 0.15%. Singapore Strait Times is down -0.01%. Japan 10-year JGB yield is up 0.023 at 1.535. Overnight, DOW fell -0.99%. S&P 500 fell -1.78%. NASDAQ fell -2.61%. 10-year yield rose 0.021 to 4.286.
NFP in focus: NASDAQ and S&P 500 at risk of deeper correction
US markets are standing on precarious footing, with investors attention on the February non-farm payrolls report due later in the day. There has been noticeable anxieties surrounding the impact of fiscal and trade policies changes. A set of weaker-than-expected NFP data could be taken as another signal of swift deceleration in the economy and rattle market sentiment further.
Cooldown in the job market might prompt Fed to resume rate cuts earlier. Markets are currently pricing in 53% chance of a 25bps rate cut in March, reflecting growing belief that Fed will need to act sooner rather than later. However, the immediate market response to downside surprises may not be relief over monetary easing but rather heightened concerns about the pace of economic weakening, given recent policy uncertainties and trade disruptions.
Markets anticipate 156k increase in NFP for February, up from 143k in January. The unemployment rate is forecast to remain at 4.0%, while average hourly earnings should hold steady at 0.3% m/m.
The latest indicators paint a mixed picture: ISM Manufacturing PMI Employment subindex dropped to 47.6 from 50.3, while ISM Services PMI Employment inched up to 53.9 from 52.3. Meanwhile, ADP Employment reading of 77k missed last month’s 186k, and the 4-week moving average of jobless claims rose to 224k—its highest level so far this year.
Technically, NASDAQ has been sliding for two consecutive weeks, now testing its 55-week EMA at 17,874.13. A decisive break below this level would confirm that the index is at least in a correction relative to the broader uptrend from the 10,088.82 low in 2022. The next key support to watch is the 38.2% Fibonacci retracement of 10,088.82 to 20,204.58, which comes in at 16,340.36. Extended losses here could set a negative tone for broader U.S. equities.
The S&P 500, still trading comfortably above its 55-week EMA at 5,590.31, may follow in the NASDAQ’s footsteps if sentiment sours further. Should the index breach this EMA convincingly, it would likely confirm that the fall from 6,147.43 is a correction of the uptrend from the 3,491.58 low in 2022. This scenario would set a 38.2% retracement target around 5,132.89, marking a significant downside pivot.
Overall, whether today’s NFP meets, misses, or exceeds expectations, the market’s reaction will hinge on how investors interpret the labor data in the context of looming trade uncertainties and weakening growth momentum. A softer reading could drive near-term Fed cut bets higher but might also deepen concerns that the U.S. economy is losing steam, thereby raising the stakes for traders and policymakers alike.
Technically, NASDAQ is now eyeing 55 W EMA (now at 17874.13) with the extended decline in the past two weeks. Sustained break there will confirm that it’s at least in correction to the up trend from 10088.82 (2022 low). Next target will be 38.2% retracement of 10088.82 to 20204.58 at 16340.36.
Extended selloff in NASDAQ could be a prelude to the similar development in S&P 500. While it’s still well above 55 W EMA (now at 5590.31), sustained break there will align the outlook with NASDAQ. Fall from 6147.43 would then be correcting the up trend from 3491.58 (2022 low) at least, and target 38.2% retracement of 3491.58 to 6147.43 at 5132.89.
Fed’s Waller: No immediate rate cut, but open to future easing
Fed Governor Christopher Waller suggested that another rate cut at the next FOMC meeting is unlikely, but he remains open to further easing down the line.
“I would’t say at the next meeting, but could certainly see [cuts] going forward,” he noted. Waller particularly highlighted the February inflation report and the evolving impact of trade policies as key factors in shaping the Fed’s outlook.
Waller acknowledged the challenges in assessing the economic effects of tariffs, citing changing economic conditions and President Trump’s harder trade stance as factors complicating policy decisions.
He noted that evaluating the impact of tariffs is more difficult this time, adding, “It’s very hard to eat a 25% tariff out of the profit margins.”
Fed’s Bostic: Economy in flux, no rush to adjust policy
Atlanta Fed President Raphael Bostic emphasized the high level of uncertainty in the US economy due to evolving policies under the Trump administration. With inflation, trade policies, and government spending all in flux, he suggested that meaningful clarity may not emerge until “late spring or summer”. Given this, he reiterated “We’ll have to just sort of really be patient.”
Speaking overnight, he described the situation as being in “incredible flux,” with rapid shifts in trade and fiscal policies making it difficult to predict economic trends. Given this backdrop, Bostic urged caution, stating, “You’ve got to be patient and not want to get too far ahead.”
He noted that just this week, there have been significant swings in expectations regarding economic policy. “If I was waiting before to see and get a clear signal about where the economy is going to go, I’m definitely waiting now,” he said.
BoE’s Mann: Larger rate cuts needed as global spillovers worsen
BoE MPC member Catherine Mann argued that recent monetary policy actions have been overshadowed by “international spillovers.” Financial market volatility, particularly from cross-border shocks, has disrupted traditional policy signals, making “founding premise for a gradualist approach to monetary policy is no longer valid”.
Mann said that larger rate cuts, like the 50bps reduction she supported at the last BoE meeting, would better “cut through this turbulence” and provide clearer guidance to the economy.
She believes that a more decisive policy stance would help steer inflation expectations and stabilize economic conditions, rather than allowing uncertainty to linger with smaller, incremental moves.
Despite her stance, the BoE opted for a smaller 25bps rate cut in its latest decision, with Mann and dovish member Swati Dhingra being outvoted 7-2.
China’s exports rise 2.3% yoy, imports fall -8.4% yoy
China’s exports rose just 2.3% yoy to USD 539.9B in the January–February period, coming in below forecasts of 5.0% yoy and down sharply from December’s 10.7% yoy.
Meanwhile, imports sank -8.4% yoy to USD 369.4B, missing expectations of 1.0% yoy growth and marking a noticeable drop from December’s 1.0% yoy.
As a result, trade balance resulted in USD 170.5B surplus exceeding projections of USD 147.5B.
Looking ahead
Germany factory orders, Swiss foreign currency reserves and Eurozone GDP revision will be released in European session. Later in the day, Canada employment will also be published alongside US NFP.
USD/CHF Daily Outlook
Daily Pivots: (S1) 0.8800; (P) 0.8863; (R1) 0.8900; More…
Intraday bias in USD/CHF remains on the downside for the moment. Rise from 0.8374 should have completed at 0.9222, after rejection by 0.9223 key resistance. Deeper fall should be seen to 61.8% retracement of 0.8374 to 0.9200 at 0.8690 next. On the upside, above 0.8924 minor resistance will turn intraday bias neutral first. But rise will now stay on the downside as long as 0.9035 resistance holds, in case of recovery.
In the bigger picture, rejection by 0.9223 key resistance keep medium term outlook bearish. That is, larger fall from 1.0342 (2017 high) is not completed yet. Firm break of 0.8332 (2023 low) will confirm down trend resumption.
