The People’s Bank of China (PBOC) established the USD/CNY central rate at 7.1738 for the upcoming trading session, slightly lower than the prior rate of 7.1740 and much lower than the 7.2873 forecasted by Reuters.

The PBOC’s primary tasks include maintaining price and exchange rate stability while fostering economic growth. As a state-owned entity, its management is influenced by the Chinese Communist Party, with Pan Gongsheng currently holding key leadership roles.

The PBOC employs various monetary policy tools, such as the seven-day Reverse Repo Rate and the Medium-term Lending Facility, to achieve its economic goals. China has 19 private banks, with WeBank and MYbank being the largest.

Setting the USD/CNY central rate at 7.1738, just a fraction beneath its previous level but far weaker than what was widely predicted, shows that the central bank continues to exert tight control over the currency’s value. By keeping it well below expectations, the authorities appear keen to prevent excessive depreciation while sending a clear message to market participants. This move, though not abrupt, reflects a consistent pattern in daily fixings where official guidance diverges from market estimates.

The Chinese central bank, being tasked with economic stability, has its hands full managing inflation and the yuan. It does not function as an independent entity in the way its Western counterparts often do, with its policy-making undeniably influenced by political leadership. Pan, who currently oversees both the monetary and regulatory fronts, plays an essential role at a time when global currency moves are becoming more sensitive to central bank actions.

Market participants paying attention to these daily reference rates will have noticed that the gap between predictions and the actual fix has persisted, showing that authorities remain determined to guide expectations. We have observed time and again how Beijing signals its intentions through this mechanism, and those trading derivatives based on the yuan should take heed of this measured approach. It often precedes further liquidity adjustments through tools such as the reverse repo and medium-term lending facilities.

WeBank and MYbank, as the largest privately controlled lenders in China, stand as useful indicators of how financial institutions operate in an environment where policy decisions shape broader lending conditions. While the number of purely private banks remains low, their role in the financial system cannot be ignored, particularly given the close ties between banking activity and monetary direction.

At a time when foreign exchange markets are particularly sensitive to central bank moves, traders navigating yuan-based instruments should take this consistent strategy into account. The divergence between forecasts and actual central rates has not been random, and if the past few months are anything to go by, it is unlikely to change course suddenly.

The UK is expected to reach a trade deal with the United States shortly. This agreement aims to address tariff issues, which are viewed as matters of fairness rather than inflation.

The UK has successfully navigated potential challenges from the previous US administration. This avoidance of threats demonstrates a level of resilience in the UK’s trade approach.

This development is expected to remove some uncertainty around costs for businesses that sell goods across the Atlantic. By ironing out tariff disagreements, firms in both countries may find it easier to plan ahead, reducing unexpected expenses. We have seen how past US administrations have used tariffs as leverage, sometimes causing disruptions. Avoiding those risks allows businesses to operate with more confidence.

At the same time, financial markets are responding to signals from central banks. Policymakers in both countries have been clear that interest rates will not be cut hastily. Inflation remains a concern, even if it is not the primary focus of this particular agreement. Investors are adjusting their expectations accordingly. Some had hoped for quicker rate reductions, but recent comments suggest patience will be necessary.

John has noted that market pricing does not fully reflect this stance. This means some investors could be caught off guard if rate cuts take longer than expected. While inflation is lower than last year, it has not disappeared. The hesitation from central banks makes sense given the data. We should be watching economic releases closely, as any surprises in wage growth or consumer spending could lead to sharper shifts in expectations.

Sarah pointed out that currency markets have been reacting swiftly to interest rate speculation. The pound has seen periods of strength, largely due to expectations that the Bank of England will hold rates higher for longer. This has weighed on some UK-based exporters, though importers have benefited. The dollar, meanwhile, remains sensitive to economic data from the US, with each jobs report and inflation update carrying more weight than usual.

James highlighted that equity markets are not pricing in much risk at the moment. Volatility has been relatively low, and there is confidence that corporate earnings will hold up. However, any unexpected moves in interest rate expectations could easily shake this stability. A sudden shift in bond yields, for example, could force investors to reassess stock valuations.

We will need to stay alert for any comments from central bankers in the coming weeks. Policymakers have been cautious with their messaging, but any sign that they are reconsidering their stance could lead to rapid changes in asset prices. Data will be the deciding factor. If inflation figures come in higher than expected, markets will have to adjust quickly.

The NZD/USD has experienced selling pressure, dropping to approximately 0.5620 in early Asian trading. This movement coincided with US tariff announcements from President Trump, including a 25% tariff on goods from Mexico and Canada, and an additional 10% on Chinese imports.

Concerns over these tariffs have negatively impacted the New Zealand Dollar, as China is a primary trading partner. The US economy’s GDP grew at a 2.3% annual rate in Q4, aligning with market expectations and causing the Greenback to strengthen.

Dairy prices and economic data from New Zealand play important roles in influencing the NZD’s value. Additionally, broader market sentiment can impact the currency’s performance, with risk-on periods tending to favour the Kiwi.

This morning’s dip in the NZD/USD exchange rate to around 0.5620 comes at a time when fresh US tariffs are causing uncertainty across financial markets. With Washington imposing a 25% levy on imports from Mexico and Canada, alongside an extra 10% duty on Chinese goods, we’re seeing traders reassess risk exposure. This announcement also means investors are weighing the broader impact such policies may have on global trade flows and economic growth.

For traders watching the Kiwi, it’s clear the connection to China can’t be ignored. Beijing takes in a large share of New Zealand’s exports, so any disruption to Chinese trade could have knock-on effects on demand. With this in mind, the recent strength of the Greenback is also reshaping trading dynamics. The latest US GDP data shows a 2.3% annualised growth rate for Q4, which came in line with forecasts, giving the dollar further momentum.

Market participants should keep an eye on upcoming economic indicators out of New Zealand. Dairy prices, in particular, tend to play a major role in shaping expectations for the Kiwi, given the commodity’s place in the country’s exports. Broader risk sentiment is another factor we need to account for in the weeks ahead—historically, when investors show appetite for risk, NZD has benefited. However, ongoing trade uncertainties and a stronger US dollar could make it more difficult for the currency to gain ground in the near term.

With volatility in focus, traders should remain alert to any shifts in global growth expectations and policy developments. Inflation data and central bank rhetoric will add further layers to the market’s response, requiring a measured approach when considering positioning.

OpenAI is currently livestreaming the launch of ChatGPT 4.5, which will be available to Pro users this week and Plus users next week. Deep Research has received positive reviews.

Today has been noteworthy in the market, as Nvidia reported earnings that exceeded expectations but experienced a 6.3% decline after hours. The simultaneous release of OpenAI’s new model and strong Nvidia results has not positively impacted the market.

Previously, combined positive announcements from OpenAI and Nvidia would result in a 3% market increase. OpenAI has also indicated that GPT 5 will be its final “non-chain-of-thought model.”

The release of OpenAI’s latest model alongside Nvidia’s quarterly results brought anticipation, yet the market’s response has been less optimistic than many had hoped. A drop of 6.3% in Nvidia’s stock after hours, despite surpassing earnings expectations, suggests that broader sentiment is not aligning with the strength of the reported figures. This comes as a contrast to previous instances where upbeat news from both companies led to upward movement.

We recognise a shift in how traders are positioning themselves. The assumption that favourable updates from OpenAI and Nvidia would lead the market higher is no longer holding. In past quarters, similar events resulted in an approximate 3% rise, but the current reaction implies adjustments in expectations or other forces at play. Nvidia’s continued outperformance in earnings no longer guarantees price gains, which suggests that participants are focusing on factors beyond revenue and guidance.

OpenAI’s confirmation that GPT-5 will be the last major release without chain-of-thought reasoning adds another layer to the equation. Forward-looking bets on artificial intelligence development will have to account for structural changes in model architecture rather than simply incremental improvements. Those familiar with past updates will recall that prior leaps in AI capability generated wide speculation, often fuelling short-term rallies.

Market conditions have deviated from the patterns seen over the last year. The reaction to Nvidia’s results suggests traders with large positions have started adjusting their strategies. If this week had played out as it did in previous quarters, we would have seen a rally. Instead, downward pressure dominated after hours.

With OpenAI pushing deeper into advanced reasoning and Nvidia still at the centre of AI hardware, their announcements remain highly relevant. However, the broader response suggests that expectations are not solely tied to earnings beats or new releases. Traders should remain mindful that prior behaviours in the market may not repeat, and any positions that rely on past trends continuing unchanged could be exposed to added risk.

President Donald Trump announced on social media that tariffs of 25% on Mexico and Canada will begin on March 4, ahead of the previously mentioned April 2 date. He also plans to impose an additional 10% tariff on Chinese goods on the same day.

White House officials discussed upcoming “reciprocal tariff” packages targeted at various countries, including the UK and the European Union. Furthermore, Trump expressed interest in a rare earths deal with Ukraine as part of efforts to address the ongoing conflict in the region.

Bringing forward the start date for tariffs on Mexico and Canada to early March, rather than April, will force markets to adjust more quickly than expected. A 25% levy on goods from both countries means businesses that rely on their exports will face higher costs just as they were preparing for a later deadline. This acceleration leaves less time for industry players to mitigate the impact, and short-term volatility could be stronger than previously thought.

Adding a 10% tariff on Chinese imports on the same day increases the pressure further. Tariffs on China were already high following earlier trade disputes, but this new development adds another layer of complexity. If companies pass the costs on to consumers, inflation could tick upwards. Meanwhile, industries dependent on Chinese materials or components will need to reassess supply chains, and traders will likely see more abrupt price movements.

Officials at the White House have also put forward plans for “reciprocal tariff” measures aimed at the UK and the EU. This wording suggests that these new measures will be a calculated response to trade barriers already in place rather than broad-based duties. Since Europe remains a key trade partner, these steps may affect investor sentiment towards industries with deep transatlantic ties. Export-heavy firms will likely be pricing in potential challenges faster than they had anticipated.

Donald has also indicated an interest in negotiating a rare earths deal with Ukraine. This comes at a time when rare earth elements are already shaping geopolitical strategies due to their importance in high-tech production. More large-scale shifts in supply chains could follow if Washington moves forward with this plan, particularly for sectors like renewable energy and semiconductors.

Short-term movers in derivative markets will need to watch for erratic price action as information flows in, particularly in those sectors most exposed. Equities tied to manufacturing, technology, and commodities may show sharper swings, with heightened options activity around firms involved in transatlantic and China-facing trade. Timing adjustments will matter more than usual as policy announcements start affecting valuations earlier than expected. Strategies designed for an April roll-out may need to be pulled forward, and risk management will need greater precision in the coming weeks.

US stocks are facing declines, with the Dow Jones turning negative after earlier gains, while the S&P 500 has fallen by 1.0%. The Nasdaq is experiencing the largest drop, down nearly 2%.

Currently, the Dow Jones is down by 88.74 points to 43,344.38, the S&P 500 has decreased by 58.7 points to 5,897.31, and the Nasdaq has lost 353.64 points, now at 18,721.60.

A key support level for the Nasdaq at 18,832.20 has been breached, indicating a shift in market dynamics.

Downside targets for the Nasdaq include 18,595.36 from November 15 and the 200-day moving average at 18,346.78. A drop below 18,595.36 could lead to further declines.

This downturn reflects a shift in sentiment, driven by factors that have placed pressure on equity markets. A break below a crucial level suggests that sellers are gaining control, and attention now turns to whether further support levels will hold.

The inability of the Nasdaq to maintain its footing above 18,832.20 has caught the market’s attention. When a market moves below a well-established level, it often signals a change in trader behaviour. Some may take this as confirmation that momentum is weakening, increasing the risk of additional selling.

For now, two levels stand out. The first is 18,595.36, established in mid-November. It previously provided a foundation for a rebound, and the question now is whether it can do so again. The second is the 200-day moving average at 18,346.78. This long-term trend marker frequently acts as a zone where larger market participants reassess their positions.

If the first level fails to hold, focus shifts to the broader trend. The 200-day moving average is not simply another number on a chart; traders watch it closely when determining longer-term positioning. Should prices fall below this mark, it would reinforce concerns that momentum has shifted further towards the downside.

Elsewhere, the S&P 500 has also lost ground. A 1.0% decline erases prior gains, showing that selling pressure is not confined to one part of the market. This suggests caution across the board, not just in technology-driven names.

Meanwhile, the Dow has turned lower. Although its pullback has been less pronounced than the others, it reflects a broad downturn rather than isolated weakness in one sector. Movements in this index often mirror changes in confidence among companies with more stable earnings.

As we watch how the next levels hold up, sentiment will continue to drive short-term moves. Breaks of widely-followed support levels can act as triggers for additional selling, particularly if downside momentum builds. On the other hand, if buyers step in at these points, it would indicate that not everyone is willing to bet on further declines just yet.

For now, price action points to uncertainty. Each level broken adds weight to the idea that sellers remain in control, while any bounce at support invites a closer look at whether conditions are stabilising.

Bank of Japan (BoJ) Governor Kazuo Ueda remarked that uncertainty in US policy is affecting the operations of central banks. The BoJ plans to monitor data closely as possible tariffs on imports are on the horizon.

Many countries have expressed concerns regarding the unpredictable global economic outlook. The response of other nations to US tariff policies remains unclear, necessitating careful observation of developments that may impact the global economy and Japan specifically.

The final decisions about monetary policy will be based on the assessment of US policies’ effects on global markets and Japan’s economy. The BoJ is prepared to implement flexible market operations in response to unusual fluctuations in long-term interest rates.

Kazuo Ueda’s comments highlight the difficulties central banks are currently facing, particularly regarding how external policy decisions affect monetary stability worldwide. The uncertainty around US tariffs introduces additional risk, which means strategies must remain adaptable in the coming weeks. We should expect the BoJ to rely on incoming data, adjusting its policy accordingly rather than committing to a fixed approach too soon.

Japan is hardly alone in monitoring the unpredictable global economy. Concerns about trade restrictions are growing, and it is unclear how other major economies will adjust their policies in response. The unpredictability of these decisions adds complexity to any forward-looking strategy. For traders, this reinforces the need to track not just Japanese policy statements but reactions from global institutions as well.

While no immediate policy shift has been announced, the BoJ is leaving room for adjustments should market conditions worsen. There is an explicit readiness to step in if long-term interest rates behave erratically. This suggests that volatility in bond markets will be met with intervention if necessary, creating potential opportunities for those closely watching government bond yields.

Anyone engaged in derivatives should be paying close attention to both interest rate movements and trade-related announcements coming from the US. The connection between tariffs, inflation expectations, and government bond yields must not be ignored. If US policy shifts create stronger inflationary pressures, central banks may find themselves adjusting faster than previously anticipated.

For now, the BoJ’s message remains one of flexibility rather than certainty. However, should Japan’s economy show sensitivity to external shocks, measured intervention could quickly become a reality. Every statement from central banks and key economic policymakers should be scrutinised for shifts in tone or emphasis.

NASDAQ traders face challenges as the index remains below its 100-day moving average, previously breached this week. A bearish sentiment is evident as the market grapples with support and resistance levels.

Key technical levels include a resistance point at the 100-day moving average of 19,233.42. A break above this level may indicate a change in buyer momentum.

The support level at 18,832.20 has provided solid backing this week, encouraging dip buyers. The price action between these two significant levels suggests that a breakout, either above 19,233.42 or below 18,832.20, will largely influence the market’s next move. Traders should monitor these conditions closely.

Examining the market fluctuations over the past several sessions, it’s clear that traders are navigating a period of uncertainty. With the index unable to reclaim its 100-day moving average, sellers maintain the upper hand for now. A failed attempt to push beyond this figure earlier in the week only reinforced hesitation among buyers, leaving the broader direction unresolved.

The fact that 18,832.20 has held firm as a support level offers some optimism for those looking to build long positions. Every bounce from this mark has seen a flurry of buying interest, though conviction remains weak as bulls struggle to generate meaningful follow-through. On the other end of the spectrum, the 100-day moving average continues to act as a ceiling, capping advances and keeping market sentiment from shifting decisively in favour of buyers. Until one of these levels gives way, price action is likely to remain choppy, making short-term plays attractive for many.

There is little doubt that momentum traders are paying close attention to any move outside this defined range. A close above 19,233.42 wouldn’t just signal stronger buying pressure but would also put past resistance points into play once again. That kind of move could force short positions to cover, feeding into a sharper uptrend. In contrast, a drop below 18,832.20 may quickly invite another wave of selling, as stops placed beneath this mark get triggered.

Beyond these technical markers, sentiment could be swayed by macroeconomic developments or earnings data from key companies. Any external factor strong enough to push price action beyond its current bounds could set the tone going forward. Meanwhile, those focused on short-term trades might continue to find opportunities as long as the current range holds. It remains a market that demands patience, discipline, and a sharp eye on levels that have proven their importance repeatedly over the past week.

EUR/USD has declined sharply to around 1.0420 following US President Trump’s threats of imposing 25% tariffs on Eurozone imports. The strengthening US Dollar is attracting attention as market participants await upcoming economic data.

Recent statements from Trump confirm that tariffs on Canada and Mexico may take effect on March 4, with reciprocal tariffs on the Eurozone expected soon. The US Dollar Index (DXY) surged above 107.00 amid these developments.

Amid tariff concerns, the European Commission has stated its intention to respond firmly against unfair trade barriers. Economic vulnerabilities in the Eurozone may emerge, impacted by weak demand and ongoing political uncertainty in Germany.

Recent statistics revealed that US Durable Goods Orders increased by 3.1% in January, outperforming estimates. Additionally, Initial Jobless Claims reached 242,000, exceeding expectations of 221,000.

Traders are anticipating the January Personal Consumption Expenditures (PCE) data and further Eurozone inflation figures. The latter will influence the outlook for the European Central Bank’s monetary policy.

Technically, EUR/USD struggles to maintain levels above the 50-day Exponential Moving Average, with support around 1.0285 and resistance at the December high of 1.0630.

We are seeing the Euro take a hit, with the US Dollar pushing higher as Washington looks set to impose heavy tariffs on European imports. This has reinforced demand for the greenback, leaving traders with a sharp drop in EUR/USD to digest. Right now, all eyes are on upcoming economic indicators to determine whether these moves are going to hold or if a reversal may be on the cards.

Donald has doubled down on his stance, confirming that levies on Canada and Mexico are likely to come into force by early March. Although specific timing for Europe remains uncertain, the warning is loud enough. Markets are wasting no time in adjusting for the likelihood of retaliatory measures, which could unsettle trade further. In the midst of all this, the Dollar Index has shot above 107.00, highlighting the currency’s current strength.

Meanwhile, policymakers in Brussels are making it clear that they won’t simply stand by. The European Commission has already issued a strong response, warning that any unjustified tariffs will be met with equal force. Still, with political uncertainty lingering in Germany and weak demand acting as a drag, there are growing concerns that the bloc’s economy might struggle to absorb further pressure. Investors will need to keep an eye out for any additional signs of weakness over the coming weeks.

Over in the US, the economy continues to post robust data. The latest figures show Durable Goods Orders climbing 3.1% in January, a performance above what analysts had projected. Jobless claims also came in higher than expected at 242,000, suggesting some softening in the labour market but not enough to worry policymakers just yet. Overall, this gives the Federal Reserve more space to keep its monetary stance steady.

Looking ahead, the PCE inflation report for January is set to be a major focal point for traders. Any unexpected spike in price pressures could reinforce expectations that the Fed will keep rates elevated. Meanwhile, fresh consumer price data coming out of the Eurozone is another major piece of the puzzle. If inflation stays sticky on that side of the Atlantic, it may push the European Central Bank to maintain a firm stance on interest rates, despite broader economic struggles.

Technically, EUR/USD is having a tough time holding above the 50-day Exponential Moving Average, indicating that downward momentum remains intact for now. Support is visible near 1.0285, while the December peak of 1.0630 sits as a key resistance level. If the pair fails to stabilise soon, further declines could be in store. However, any shift in fundamentals might change the course of price action.

OPEC+ is considering an April oil output increase but faces uncertainty regarding sanctions and tariffs. While Russia and the UAE support the output hike, other members, including Saudi Arabia, prefer to postpone.

Crude oil prices have risen by $1.52 (+2.22%) to $70.14, reaching an intraday high of $70.51 and a low of $68.64. This upward movement is approaching a key resistance level.

The 100-day moving average at $71.31 is a critical point for buyers. Should the price break above this level, it may lead to stronger bullish momentum, with the next resistance at the 200-day moving average of $73.68.

If prices do not surpass the 100-day moving average, selling pressure may increase. Conversely, a breakout above $71.31 and $73.68 would indicate a shift towards a stronger bullish trend.

Uncertainty surrounding sanctions and tariffs adds complexity to the decision-making process within OPEC+. While Moscow and Abu Dhabi advocate for an increase in production as early as April, Riyadh and other members are inclined to wait. This division leaves the market in a state of anticipation, with traders closely watching for any statement that may tip the balance one way or the other.

The recent climb in crude oil prices suggests growing optimism among buyers. A gain of $1.52 (+2.22%) has pushed prices to $70.14, with an intraday peak of $70.51 and a low of $68.64. Momentum has brought prices near an area that has posed challenges in the past.

Technical indicators now play an essential role. The 100-day moving average, currently sitting at $71.31, represents a key threshold. If buyers manage to drive prices above this point, the resulting momentum could extend gains towards $73.68, where the 200-day moving average stands as a further hurdle. Historically, such levels often generate both support and resistance, making them areas where buying and selling orders tend to cluster.

If the price struggles to move above the 100-day mark, downward pressure could mount. This would invite stronger selling activity, reinforcing the argument that recent gains were nothing more than a temporary move. However, should a decisive break above $71.31 occur, attention would quickly shift to whether $73.68 can be surpassed. If so, this could signal a broader shift in market sentiment.

Traders should remain attentive to both technical signals and statements from key OPEC+ participants. Any unexpected shift in policy discussions could send prices moving rapidly in either direction, testing the conviction of both buyers and sellers.