Germany’s SPD has acknowledged uncertainty regarding their future role in government discussions. The recent election result marked the SPD’s lowest voter support in a federal election.

The CDU/CSU alliance, led by Friedrich Merz, may hesitate to collaborate with the SPD due to potential public backlash. Currently, a coalition with the Greens seems more appealing to the CDU/CSU after the SPD’s disappointing performance.

This outcome has introduced fresh doubts about how the SPD will position itself in the coming months. Lars Klingbeil and Saskia Esken have avoided outright statements on whether they plan to engage in coalition talks with the CDU/CSU, though voices within the party appear divided. Some favour remaining in opposition to rebuild trust, while others see a potential agreement with the conservatives as a way to retain influence. The party’s stance over the next few weeks will set the tone for their engagement in policy negotiations.

Meanwhile, Friedrich faces increasing pressure to solidify his strategy. While early indications suggest a preference for working with the Greens, some within his party remain cautious. Previous tensions between the CDU/CSU and the Greens on fiscal policy and energy reforms could resurface. Any agreement would require careful concessions, something that has caused friction in earlier discussions. If these hurdles prove difficult, alternative arrangements might gain traction.

For Annalena Baerbock and Robert Habeck, this shifting political reality presents both opportunities and risks. They hold a considerable bargaining position, but public perception of their role in recent government policies could limit their hand. With economic concerns mounting, their ability to advocate for environmental measures while reassuring businesses will be tested. Any miscalculation here risks weakening voter confidence.

We have already seen how uncertainty in Berlin can lead to volatility in certain sectors. The prospect of an unstable coalition—or a prolonged negotiation period—could influence bond markets and investor sentiment. As discussions unfold, close attention must be paid to statements from party leaders. Even subtle shifts in tone or wording could hint at changing dynamics.

Over the next few weeks, expectations will need to be adjusted based on emerging details. Policy priorities, leadership decisions, and internal disagreements will all shape the direction of negotiations. Those tracking these developments must assess both public declarations and behind-the-scenes maneuvering. Misreading either could lead to unexpected outcomes.

The US Dollar (USD) is expected to retest the 148.90 level against the Japanese Yen (JPY) before stabilising. A key support level at 148.63 is unlikely to be reached soon, according to analysts.

In the short term, despite a recent drop, USD conditions are seen as oversold, indicating a potential for further decline. If the USD surpasses the 151.05 resistance mark, it may signal a stabilisation after a period of weakness. Current resistance levels are at 149.75 and 150.10.

We anticipate the US Dollar making another attempt at the 148.90 mark against the Japanese Yen before settling into a steadier range. Analysts suggest the 148.63 support level is unlikely to come into play anytime soon, which provides traders with a reference point in assessing downside risks.

Although the Dollar has pulled back recently, technical indicators suggest it has moved into oversold territory. This typically implies that further declines may be limited in the near term, though it does not necessarily mean an immediate sharp reversal. If the Dollar breaks above 151.05, it would suggest that the recent period of weakness has run its course, providing traders with a clear indication of potential stabilisation.

From here, we are closely watching the 149.75 and 150.10 levels as potential hurdles. If the price struggles to hold above them, short-term momentum could favour further tests of support. However, should the Dollar successfully reclaim these levels with sustained buying pressure, it would strengthen the case for a move towards the 151.05 threshold.

In terms of positioning, traders should remain mindful of the broader trend while also considering short-term technical signals. Keeping a close eye on shifts in momentum will be important when managing risk in derivative markets. If price action begins to consolidate, it may create entry opportunities, but sharp movements cannot be ruled out, particularly if external factors such as economic releases or central bank commentary shift sentiment unexpectedly.

While the backdrop remains fluid, traders should assess whether price developments align with broader market conditions. If resistance levels continue to hold, there could be renewed selling interest, but if buyers step in convincingly, we may see another leg higher.

On Friday, the Nasdaq experienced a notable sell-off following disappointing US Flash Services PMI data and the Final UMich Consumer Sentiment survey, which revealed long-term inflation expectations reaching a 30-year high. This sell-off was largely triggered by fears that the Federal Reserve may struggle to cut rates promptly amid ongoing inflation concerns.

The Nasdaq failed to surpass the key resistance level of 22111, leading to a decline. Sellers are likely to continue targeting the 20990 support, while buyers hope for a recovery above resistance to reinstate bullish momentum.

The bearish trend intensified following a break of the upward trendline on the 4-hour chart. Buyers may find a more favourable risk-to-reward scenario around the 21430 support, while sellers could benefit from a breakdown towards the 20990 level.

In the short-term, a recent lower low at 21955 may pose resistance. If the price retraces to this level, sellers could enter, aiming for a decline towards the 21430 support, while buyers will seek a breakout to foster bullish movements.

Upcoming economic reports include the US Consumer Confidence report and US Jobless Claims figures, concluding with the US PCE data on Friday.

A disappointing services PMI release and a surge in long-term inflation expectations have heightened concerns about the Federal Reserve’s ability to cut interest rates soon. Markets responded swiftly. Tech-heavy stocks bore the brunt of the sell-off, dragging Nasdaq lower after failing to break resistance at 22111. The sharp reaction suggests traders remain sensitive to any news that could delay policy easing. Without clearer signs of inflation subsiding, downside risks persist.

A key level now stands at 21430, where technical buyers may attempt to enter. Earlier, an upward trendline provided support, but once price broke beneath it, sellers strengthened their grip. Returning towards 21955 may invite further selling pressure. If resistance holds, targets around 21430 and 20990 remain valid. If, however, upward momentum builds, a recovery towards 22111 could be on the table.

Inflation expectations running at a 30-year high put central bankers in a difficult spot. Hopes for early rate cuts diminish when consumers anticipate persistent price increases. A rebound in consumer confidence or weaker labour market data might shift this outlook. These next data releases, including PCE inflation on Friday, could heavily influence sentiment and future movement.

It remains a volatile period. Economic reports coming up may dictate direction, offering both buyers and sellers opportunities. Whether inflation fears hold back rallies or confidence resumes, staying adaptable will be key.

Current DAX Futures price is 22,545. Key levels indicate a bullish outlook above 22,775 and a bearish stance below 22,684, with the analysis noting that the price is presently in bearish territory.

For potential entry points, levels around 22,560 are suggested, close to the value area high. Bullish profit targets include 22,865, 23,025, and 23,195, while bearish targets are set at 22,360, 22,252, 22,145, 22,072, 21,930, 21,735, and 21,520.

The analysis serves as a guide for traders, emphasising the need to adapt strategies based on market interactions with these key levels. Further updates will be available from tradeCompass.

The current positioning of the DAX Futures price suggests that the market remains below the indicated bullish threshold. This implies that unless a move above 22,775 occurs, any upward shift is likely to face resistance. Conversely, with the present value lingering beneath 22,684, the broader trajectory appears to favour further declines unless buyers regain control.

As for those looking for entry points, areas near 22,560 align with recent value high levels, meaning interest from both sides could emerge there. If buyers gain strength, the key upside objectives offer a structured path towards 22,865, followed by 23,025 and extending up to 23,195. Conversely, should the downward pressure continue, multiple downside targets remain in play, starting from 22,360 and stretching towards lower levels, including 21,520 as an extended goal.

Given these outlined thresholds, the priority remains on how price behaves when engaging with them. If certain levels hold firm as support or resistance, that would dictate whether adjustments are required. The plan should remain flexible, reacting to confirmed moves rather than assumptions.

We will monitor movements closely for any changes and provide further updates as conditions shift.

The USD/CAD pair has rebounded to approximately 1.4220, recovering from an earlier drop to around 1.4180. This recovery follows a resurgence of the US Dollar, despite weak US flash S&P Global PMI data for February, which indicated the first contraction in services activity in 25 months.

Concerns about potential 25% tariffs on Canada imposed by US President Trump are affecting the outlook for the Canadian Dollar. Following a delay in tariff implementation, Bank of Canada Governor Tiff Macklem noted that such tariffs could severely impact the economy.

The USD/CAD pair currently forms a Descending Triangle pattern. A dip below the February 14 low of 1.4151 could lead to further losses towards the December 9 low of 1.4094, while a rise above 1.4246 may push it towards 1.4300.

Several factors affect the CAD, including Bank of Canada interest rates, oil prices, economic health, inflation, and trade balance. Higher rates are typically beneficial for the CAD, while changes in oil prices directly impact this currency due to Canada’s reliance on oil exports.

Inflation data has a complex relationship with the CAD. Although inflation generally decreases currency value, increased inflation may prompt higher interest rates, enhancing CAD demand from foreign investors.

Economic data releases, including GDP and employment statistics, significantly influence the CAD’s value. Strong economic performance attracts investments, potentially leading to rate hikes and a stronger currency, whereas weak data could result in a decline of the CAD.

The USD/CAD pair has regained traction, moving back to around 1.4220 after dipping to 1.4180 earlier. This rebound comes even as the latest US flash S&P Global PMI figures for February painted a weak picture, marking the first contraction in services activity in over two years. Despite that, the US Dollar remains firm, suggesting that traders are pricing in other dynamics beyond just economic indicators.

Meanwhile, concerns surrounding trade policy continue to shape sentiment. With tariffs on Canada still in discussion, Tiff warns that if enforced, they could have severe repercussions for the economy. The delay in implementation has provided temporary relief, but uncertainty remains. As market participants weigh the risks, volatility in the Canadian Dollar is likely.

Looking at the technical setup, the Descending Triangle pattern is still in play. If price breaks below 1.4151—last seen on February 14—downside momentum may accelerate towards 1.4094, a level dating back to early December. Conversely, a move above 1.4246 might see the pair pushing towards 1.4300. Given the current price action, these levels serve as meaningful thresholds for potential moves in either direction.

The Canadian Dollar doesn’t move in isolation. The Bank of Canada’s rate decisions remain key, with higher rates historically lending support to the currency. Alongside that, oil prices carry outsized influence, as Canada’s resource-heavy economy ties closely to crude exports. Any spikes or declines in oil can have an immediate effect.

Inflation presents a more layered dynamic. Rising prices typically erode purchasing power, which could weaken the CAD. However, if inflation remains persistent, policymakers might be forced to raise rates in response, increasing demand as investors seek higher returns. Understanding this balance is key when assessing price movements.

Domestic economic performance plays a significant role as well. Strong GDP growth or robust labour market data can encourage inflows into Canadian assets, potentially lifting the currency. On the other hand, weaker figures may lead to speculation about rate cuts, weighing on the CAD. Given the upcoming data prints, traders should be prepared for fluctuations.

With key levels in focus and major themes unfolding in trade policy, central banking, and commodity prices, the next few weeks hold plenty of opportunity—but also risks—for those following this pair closely.

President Xi Jinping expressed China’s contentment with Russia and other involved parties making efforts towards resolving the Ukraine situation. Following a conversation with President Vladimir Putin, Xi noted that China-Russia relations will progress steadily regardless of shifts in the international landscape.

The two nations have committed to ongoing communication and coordination, with a focus on long-term development strategies and diplomatic policies. This statement reinforces the existing partnership between China and Russia, reflecting their aligned interests amid broader geopolitical dynamics.

This statement from Xi highlights Beijing’s satisfaction with Moscow’s diplomatic efforts in handling the Ukraine situation. It also underlines a commitment to maintaining strong ties, even as global conditions shift. Stability in relations between these two nations suggests that their cooperation will persist, shaping future economic and political strategies.

For those tracking global markets, this steady relationship between Beijing and Moscow signals continuity. The reaffirmation of long-term coordination implies that trade policies and agreements between the two will likely remain intact, providing clarity on future engagements. Any expectations of distancing due to geopolitical tensions appear unfounded, based on the latest remarks.

Putin’s call with Xi reinforces this stability. The ongoing dialogue suggests that both sides are keen to ensure that economic ties are not disrupted. Continued diplomatic alignment often translates into sustained trade flows, which may impact commodity prices, particularly in energy and raw materials. Industries dependent on these sectors might find reassurance in the consistency of this relationship.

From our perspective, the focus should be on how these statements influence economic expectations. Consistent ties between these two governments tend to reduce unpredictability in supply chains linked to their economies. The absence of divergence in policies suggests that broader market movements will reflect adjustments rather than abrupt shifts.

Looking ahead, attention must be given to any developments in the policies that Beijing and Moscow follow in response to external pressures. If their dialogue leads to deeper cooperation in trade or finance, this could shape near-term expectations across multiple sectors. Recognising these signals early allows for better positioning in response to future shifts.

Moreover, the reaffirmation of diplomatic coordination indicates that prior agreements and discussions remain on course. For industries reliant on steady imports or exports between these economies, this provides reassurance that no sudden disruptions should be anticipated. Stability in these relations often correlates with more predictable commodity flows, particularly in oil, gas, and metals.

It is worth noting that global responses to this partnership can still influence external market conditions. If other nations adjust their own policies in reaction, this could create indirect effects. Monitoring these reactions should be a priority when assessing the wider economic picture.

While long-term strategies remain a central theme in this discussion, short-term developments should not be ignored. Any upcoming discussions between these two leaders could present new details that refine expectations. Keeping track of whether economic commitments evolve further will be necessary to maintain awareness of shifting conditions.

NZD/USD experienced a slight increase before retracing its gains. Analysts from BBH noted that New Zealand’s Q4 retail sales data exceeded expectations.

Retail sales volume rose by 0.9% quarter-on-quarter, against an anticipated 0.5% and a prior quarter’s figure of 0%. The Reserve Bank of New Zealand (RBNZ) indicated a gradual pace of easing, planning for 75 basis points of reductions over the next year, with a target policy rate of 3.00%.

In other market movements, EUR/USD gained traction after reaching lows, while GBP/USD fluctuated around 1.2630. Gold prices approached record highs near $2,955 per ounce, amid mixed signals in the US dollar. Bitcoin continues to consolidate between $94,000 and $100,000, with recent investor outflows indicating reduced institutional demand.

This recent lift in the New Zealand dollar was short-lived, with traders swiftly taking profits as the market adjusted its stance. The better-than-expected retail sales figures for the fourth quarter provided temporary support, though the broader sentiment remains tied to monetary policy expectations. The Reserve Bank of New Zealand has reaffirmed that rate cuts will be spaced out, aiming for a total reduction of 75 basis points over the coming year. Markets have mostly priced this in, making further upside dependent on shifting expectations around inflation or global demand trends.

On the currency front, strength in the euro suggests that buyers stepped in following a period of weakness. Sterling’s hesitancy around 1.2630 reflects uncertainty, with traders weighing economic conditions against central bank rhetoric. Movements in both pairs underline how market participants remain reactive rather than proactive, with price action responding sharply to incoming data rather than setting firm directional trends.

Gold’s march towards an all-time high highlights its role as a preferred hedge amid fluctuating US dollar dynamics. While upward momentum remains intact, traders should watch for any profit-taking as new highs are tested. Meanwhile, Bitcoin’s range between $94,000 and $100,000 signals a battle between large buyers and sellers, with recent capital outflows suggesting that major investors have been pulling back.

For the near term, those dealing in derivatives should remain alert to shifts in rate expectations, particularly from central bankers who continue to influence volatility. Sentiment around inflation and policy adjustments will guide flows across asset classes, with traders needing to balance short-term moves against longer-term positioning. Keeping an eye on institutional behaviour in crypto and metals markets will also provide useful clues about where capital is flowing next.

The S&P 500 experienced a steep decline on Friday due to disappointing US Flash Services PMI and a rise in long-term inflation expectations, which hit a 30-year high. Concerns arose that if an economic slowdown occurs, the Federal Reserve may be slow to reduce rates while inflation remains above target.

Despite the negative data, one report alone may not trigger a major market correction. Upcoming Non-Farm Payrolls (NFP) and Consumer Price Index (CPI) reports will be important ahead of the March FOMC decision.

The daily chart indicates a pullback from all-time highs, with sellers targeting the 5960 support level. Dip buyers may also see opportunity around that level for a potential rally.

On the 4-hour chart, a bounce occurred near the minor support at 6020 as buyers entered the market, while sellers await a break lower. From a risk management view, buyers find better setups around 6020, while sellers eye a lower break for further declines.

The week ahead includes the US Consumer Confidence report, Thursday’s Jobless Claims figures, and Friday’s PCE data.

Markets took a hit on Friday, largely driven by weaker-than-expected economic data. The services sector, a key driver of US growth, showed signs of slowing. Adding pressure, long-term inflation forecasts reached levels not seen in three decades. This presents a difficult challenge: if the economy decelerates, policymakers may hesitate to lower rates while inflation remains above target.

Even with these concerns, a single piece of data is unlikely to trigger a sustained downturn. Investors will closely monitor upcoming reports on employment and inflation as these will shape expectations ahead of March’s central bank meeting. A rebound could occur if job figures show strength or inflation cools. However, should these reports confirm Friday’s worrying signs, pressure on equities may persist.

From a technical standpoint, price action suggests hesitation near record highs. Sellers remain in control for now, with attention on 5960 as a key area where demand may return. Short-term traders looking for value could step in around that level, but a push below it would open the door to further declines.

On lower timeframes, buyers attempted to regain ground near 6020. This level acted as a buffer, preventing deeper losses, though sellers remained patient. A break below would likely encourage further selling. Conversely, if support holds, short-covering could drive prices upwards. Risk management remains essential, with buyers focusing on defined levels while those looking for declines wait for confirmation.

The coming days bring fresh data that may sway sentiment. Consumer confidence results will give insight into household optimism, followed by jobless claims, which could signal labour market conditions. To cap off the week, Friday’s inflation figures offer the final piece before the next policy decision. Each of these releases carries the potential to shift expectations, meaning volatility may remain elevated.

UK data released on Friday indicated a net public sector surplus of £15.4bn for January, falling short of the £20bn forecasted by the Office for Budget Responsibility. This situation increases the likelihood that Chancellor Rachel Reeves may need to reduce spending to avoid tax hikes in her upcoming Spring Statement on 26 March.

The expected fiscal flexibility has diminished due to rising gilt yields. GBP/USD is anticipated to dip below 1.25 in March, influenced by potential lower spending and changes from the Bank of England.

The UK data calendar is clear this week, directing attention to upcoming remarks from Bank of England representatives, including two dovish members today and Chief Economist Huw Pill tomorrow.

A lower-than-expected public sector surplus means that Rachel has less room to manoeuvre ahead of next month’s Spring Statement. Borrowing costs are already climbing, as reflected in rising gilt yields, so filling the gap with more debt would only add to the pressure. On the other hand, increasing taxes would likely be unpopular, particularly given the broader economic slowdown. That leaves spending cuts as the most likely option.

For traders, this creates a scenario where the pound could soften further. Expectations that GBP/USD may slip below 1.25 in March are tied to both the potential for reduced fiscal spending and any dovish signals from the Bank of England. If markets start to price in a more accommodative stance from policymakers, sterling could weaken even more. Rising borrowing costs make aggressive rate cuts less attractive, but if economic growth looks weak, the central bank may still be inclined to loosen policy sooner rather than later.

This week’s UK economic schedule is empty, shifting attention to how members of the central bank guide expectations. Two policymakers seen as supportive of easier financial conditions are set to speak today, meaning markets may lean towards a softer view if their comments reinforce expectations of rate cuts. Tuesday brings remarks from Huw, and as Chief Economist, his words carry more weight. If he signals patience on loosening policy, the pound may find some support, but any mentions of downside risks to growth could reinforce a weaker trend.

For those navigating derivatives, pricing in possible moves based on policy signals will be important. If markets take today’s speeches as dovish, sentiment could push sterling lower before traders even hear from Huw. However, a stronger-than-expected stance from him may curb any early losses.

With fiscal and monetary policy decisions shaping up to pressure the pound, it’s a week where attention to detail matters. Movements may not be driven by data, but by how policymakers position expectations going forward.

As of 21 February 2025, the Swiss National Bank (SNB) reported total sight deposits at CHF 438.1 billion, an increase from CHF 432.5 billion previously.

On 24 February 2025, domestic sight deposits reached CHF 430.2 billion, up from CHF 424.4 billion.

This resurgence in Swiss sight deposits marks the highest levels seen since just before Christmas, although it follows a trend of declining deposits in previous weeks.

Liquidity levels within the Swiss banking system have started to rebound after weeks of declines. With total sight deposits climbing to CHF 438.1 billion, there’s a clear indication that liquidity is returning to the system. Domestic sight deposits also moved higher, reaching CHF 430.2 billion, reinforcing this trend. This suggests a shift in positioning among financial institutions, which may have implications for monetary conditions in the near term.

For those monitoring monetary policy, this movement provides insight into how the Swiss National Bank may be managing liquidity. The rise in deposits could signal that liquidity injections have been made, or that previous outflows are reversing. Given that these deposits had been declining in earlier weeks, the recent increase suggests that demand for francs has changed.

It’s worth noting that sight deposits can reflect interventions or changes in central bank operations. When these balances grow, it often indicates more liquidity in the financial system. When they shrink, it suggests tightening conditions. Keeping an eye on these fluctuations can offer clues about the SNB’s stance and how financial institutions are responding.

Short-term volatility in funding markets can also be linked to these deposit shifts. The return towards higher balances—last seen in December—may suggest that earlier liquidity pressures are easing. If this trend continues, it could affect expectations around funding rates and broader financial conditions.

Changes in sight deposits can also influence currency markets. The Swiss franc has had periods of strength in recent months, and rising liquidity levels could hint at shifts in positioning. If deposit levels keep climbing, it may point to adjustments that traders should watch closely.

Watching how these numbers move in the coming weeks will provide a clearer picture of whether this is a temporary reversal or the beginning of a longer adjustment. If deposits continue to trend upwards, it might suggest that financial institutions are adapting to changing conditions in a way that could affect capital flows.