Crude Oil markets saw a decline on Monday, with West Texas Intermediate (WTI) prices falling by 2.5%. OPEC announced plans to gradually increase oil production, although challenges remain as member countries depend on higher prices.

OPEC’s agreement involves a flexible increase in production caps starting in April, conditional on positive global growth and rising oil demand. The US President has been advocating for lower oil prices, coinciding with OPEC’s decision to potentially adjust production based on market conditions.

Wti Hits 12 Week Lows

WTI prices have now reached 12-week lows near $68.25 after six weeks of consecutive declines. This followed a technical rejection from the 50-day Exponential Moving Average at around $71.50, shifting the market into a bearish trend.

WTI Oil, a high-quality crude from the US, is influenced primarily by supply and demand dynamics, along with political factors and OPEC decisions. The value of the US Dollar also affects WTI prices, as oil is predominantly traded in dollars.

Weekly inventory reports from the American Petroleum Institute and the Energy Information Administration shape WTI prices by indicating changes in supply and demand. OPEC’s production decisions can significantly impact WTI prices, either tightening supply or increasing production to adjust market balance.

Oil prices have stumbled again, driven lower by fears of increasing supply, following the announcement by OPEC to begin a controlled rise in production. Monday’s 2.5% drop in West Texas Intermediate (WTI) has now placed the commodity at levels last seen nearly three months ago, continuing a trend that has persisted for six weeks.

The group’s latest agreement outlines a measured and conditional approach, with production adjustments hinging on the pace of global economic growth and demand for crude. While this suggests flexibility, many of its member nations remain dependent on higher prices, meaning any further downward pressure could test their resolve. Meanwhile, the US administration has been vocal about its stance towards lower oil prices, aligning with OPEC’s readiness to adjust output if necessary.

From a technical standpoint, recent price action adds weight to the bearish momentum. The rejection from the 50-day Exponential Moving Average near $71.50 has reinforced selling pressure, with WTI settling near $68.25. This level represents an area of interest, as it marks a point where traders may reassess their positions.

External Market Influences

Of course, pricing remains sensitive to various external influences beyond simple supply adjustments. Geopolitical shifts, shifts in the strength of the US Dollar, and economic data releases remain pivotal factors. Given that crude is largely exchanged in dollars, any relative weakening or strengthening of the currency tends to have a noticeable impact on pricing.

Additionally, inventory data from the American Petroleum Institute and the Energy Information Administration offer insight into supply conditions, influencing short-term sentiment. Should we see larger-than-expected stockpile changes, particularly in the US, traders will likely adjust their outlook accordingly. OPEC’s willingness to manage production still holds weight, either by constricting availability to firm up prices or by maintaining a strategy that prevents excessive market imbalances.

For those tracking derivative positions, short-term movements are likely to be dictated by technical cues and inventory figures, while broader market sentiment remains tied to production policies and global economic signals.

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US stock markets experienced a sharp decline, with the S&P 500 falling by 1.75%. The Nasdaq Composite dropped by 2.6%, while the Russell 2000 saw a 2.8% decrease.

The DJIA closed down by 1.4%, and the Toronto TSX Composite fell by 1.5%. Despite a last-minute buying surge following Trump’s tariff order increase on China from 10% to 20%, tech stocks and small caps were particularly affected. Currently, the Nasdaq is trading below its level from election night.

Market Selloff Intensifies

Markets have been hit hard, and the selloff is showing no immediate signs of stopping. The latest declines follow a period of relative stability, making the abrupt reversal even more striking. Weakness in technology and smaller companies suggests that investors are pulling back from riskier assets, while the late-session bounce points to active efforts by short-term traders to reposition.

Trump’s decision to raise tariffs on Chinese imports has only added to the pressure. The higher levy—jumping from 10% to 20%—was met with selling across sectors, though technology and smaller companies bore the brunt of the reaction. The Nasdaq Composite, having already been under stress, has now fallen beneath levels seen on election night. This underperformance suggests that investor optimism surrounding past policy benefits may be fading, replaced by concerns over trade and growth.

The Dow and the Toronto TSX Composite were also caught in the downturn. Both ended lower, though large-cap stocks showed relatively more resilience. That said, with the broader market facing mounting pressure, the ability of these indices to hold up will be tested further in the sessions ahead.

From a trading perspective, the current environment demands caution. Sharp intraday movements indicate fragility, with sentiment shifting quickly in response to policy headlines. Any attempt to gauge short-term direction requires an understanding that momentum can reverse at any moment. Those who are positioned aggressively should carefully reassess, particularly with the volatility seen after Trump’s decision.

Institutional Reaction And Market Outlook

The next few weeks are likely to be driven not just by global trade policy but also by how institutional money reacts to recent price action. If larger players continue reducing exposure to risk-sensitive sectors, further downside cannot be ruled out. Meanwhile, any attempts at recovery may be met with resistance unless accompanied by clear signs of stabilisation in either economic outlooks or external pressures.

At present, market behaviour suggests traders remain highly reactive, making it challenging to maintain a consistent outlook. The rapid swings seen recently are a reminder that conviction can shift quickly, leading to abrupt repositioning. Those navigating this period should remain aware of the potential for sudden market shifts, especially as external factors continue shaping sentiment.

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The Canadian Dollar (CAD) declined by about 0.2% against the US Dollar (USD) amid ongoing bearish trends, marking its seventh consecutive session of losses. This downturn follows threats from President Trump regarding a 25% tariff on Canadian goods.

CAD is projected to approach multi-year lows as the USD/CAD pair returns to the 1.4500 range. Reports also indicate a forthcoming production limit increase from OPEC, which may further inhibit the Loonie’s performance. Canadian officials are prepared to retaliate with tariffs if the proposed measures go forward.

Canadian Pmi Disappoints

March’s Canadian Purchasing Managers Index (PMI) Manufacturing figures fell sharply to 47.8, missing forecasts and signalling potential recession fears. The CAD’s decline has pushed USD/CAD higher, with the pair trending above the 50-day Exponential Moving Average near 1.4300, although indicators suggest possible exhaustion in the upward trend.

Tariffs function as customs duties meant to bolster local markets by increasing the cost of imported goods. While they can generate government revenue, their long-term impact on prices and potential trade conflicts is debated among economists.

As the 2024 presidential election approaches, Trump aims to utilise tariffs to benefit the US economy, focussing on key trading partners, Mexico, China, and Canada, which together made up 42% of total US imports in 2024. He intends to use tariff proceeds to lower personal income taxes.

The Canadian dollar continues its downward march, with the USD/CAD pair climbing towards levels last seen years ago. After already losing ground for seven straight sessions, downward pressure remains strong. This decline isn’t happening in isolation. Reports of OPEC’s decision to increase production may weaken oil prices, which often sets the tone for Canada’s currency due to the country’s heavy reliance on energy exports. Meanwhile, the Bank of Canada’s task of stabilising inflation could grow more complicated if external pressures send consumer prices higher.

Trump’s tariff threat is rattling markets, particularly because Canada exports a major share of its goods south of the border. A 25% duty would sharply restrain business activity, as firms adjust pricing structures to offset the costs. The government in Ottawa has signalled a firm stance, with officials ready to hit back in kind. While retaliatory tariffs can help domestic producers in theory, they also risk inflating prices for consumers and disrupting supply chains. Markets will be watching closely to see whether diplomatic talks yield a resolution or if traders must brace for another round of trade disputes.

The disappointing March PMI figures only add to the bleak outlook. A reading below 50 typically indicates contraction, and at 47.8, the numbers paint a picture of manufacturers struggling with softer demand. Fears of an economic downturn are creeping in, which could influence future monetary policy decisions. The USD/CAD pair has pushed past the 50-day Exponential Moving Average, hovering around 1.4300, but technical signals suggest waning momentum in the current trend, hinting at possible exhaustion. Traders positioned for an extended climb should monitor whether buying pressure persists or if signs of reversal present an opportunity to reposition.

Tariff Debate Intensifies

The broader debate around tariffs is far from settled. Supporters argue that they encourage local production by making imports less competitive. Detractors point to the knock-on effects, with businesses often passing higher costs onto consumers. This time, Trump plans to use tariff revenues not just as leverage in trade negotiations but also as a way to lower personal income taxes. His economic approach will remain a focal point as the US presidential election draws closer, particularly among investors weighing the implications for global trade.

For now, traders should remain alert. Markets are bracing for further developments, and the next moves from policymakers could dictate short-term price action. Monitoring technical indicators alongside fundamental shifts will be key in the coming weeks.

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An article in the state-sponsored publication China State Finance has downplayed expectations for fiscal stimulus amid ongoing discussions in the National People’s Congress. It suggests that while there is some room for increased central-level fiscal deficits, the long-term aim remains achieving a balanced budget.

The report indicates that China’s deficit to GDP ratio is under 30%, considerably lower than 122% in the US and 260% in Japan as of the end of 2023. It mentions that some flexibility in fiscal deficits might be allowed for cities in good financial condition, but overall fiscal balance must be pursued in the medium term.

Beijings Fiscal Policy Approach

Beijing’s stance, as presented in the recent article, signals a preference for financial prudence over broad stimulus measures. This aligns with previous messaging from policymakers, who have consistently highlighted the risks of excessive borrowing. The text suggests that while there may be some room for deficit expansion at the central level, financial discipline remains the long-term goal. Expectations for substantial fiscal intervention should therefore be tempered.

Moreover, the comparison to the United States and Japan makes it evident that China’s government debt levels are relatively low on a global scale. However, keeping debt under control appears to take priority over any aggressive spending. By allowing budget flexibility only for cities with stable financial positions, authorities are ensuring that additional debt does not introduce further risks into the system. This cautious approach implies that while targeted support may be provided, broad-based stimulus packages remain unlikely.

For traders positioned in these markets, the implications are clear. Maintaining balanced budgets reduces the probability of large-scale market interventions by the state, affecting expectations for liquidity conditions. If policymakers continue to resist calls for widescale stimulus, investor sentiment may adjust accordingly. Monitoring official announcements and fiscal data releases in the coming weeks will help in gauging the extent of any forthcoming support.

Impact On Financial Markets

Additionally, the focus on medium-term fiscal goals rather than immediate spending measures underscores a commitment to financial stability. That means debt issuance may be controlled rather than expanded aggressively, potentially influencing the pricing of government bonds and linked instruments. This is especially relevant for those assessing sovereign risk and positioning themselves accordingly.

With authorities guiding expectations toward restraint, short-term policy decisions may offer only incremental shifts rather than sweeping changes. Market participants would do well to reassess positioning in light of these developments, particularly in areas where fiscal policy plays a key role in shaping long-term growth projections.

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XAG/USD has surged above $31.50 as demand increases due to tariff uncertainties. Silver now targets $32.00 following a rise from below the 50-day SMA.

President Trump confirmed tariffs on goods from Mexico, Canada, and China, starting March 4, contributing to the surge. Silver is currently trading at $31.67, appreciating by 1.76% due to the softening Greenback and declining US Treasury bond yields.

Key Resistance And Support Levels

A daily close above $31.50 could challenge resistance levels at $32.00 and $33.20. If prices fall below $31.50, support is expected at the 50-day SMA, with further support at $30.43.

Silver is widely used for both investment and industrial purposes, and its price can be influenced by various factors, including geopolitical events, interest rates, and economic conditions in major markets.

With silver’s sharp move above $31.50, the price appears to be pushing towards the $32.00 level, having already jumped by 1.76% amid a weaker US Dollar and falling Treasury yields. The latest push comes as traders react to fresh trade policies, with the US President confirming new tariffs on products originating from Mexico, Canada, and China. This shift in policy, set to take effect on 4th March, seems to have sparked increased interest in precious metals, as investors assess the outcome of potential supply chain disruptions and inflationary pressures.

Having established itself above the $31.50 mark, silver may attempt to test resistance at $32.00, with another barrier waiting at $33.20 if momentum persists. Traders should keep a close eye on daily closes, as slipping below the breakout level could see prices testing the 50-day simple moving average (SMA), followed by further support at $30.43. Within this context, price action will likely be influenced by changing expectations around monetary policy as well, with bond yields and risk sentiment playing a part in shaping the next move.

Market Drivers And Trend Analysis

Considering silver’s dual role as both an industrial metal and a store of value, market participants ought to monitor various factors affecting demand. Geopolitical events, central bank policies, and broader macroeconomic developments could all feed into price direction, prompting shifts in positioning. Those looking at options and futures trading on silver may want to assess volatility trends, given that fluctuations in dollar strength and bond yields tend to impact price swings.

For now, market movements suggest a preference for haven assets amid an uncertain trade backdrop. Monitoring key levels, particularly the breakout zone at $31.50, will be important in gauging whether silver extends its climb or faces a pullback.

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The Dow Jones Industrial Average (DJIA) opened around 43,800 but fell significantly, ending the session down 640 points. Ongoing concerns regarding tariff threats from the US President add to market volatility.

The Nonfarm Payrolls (NFP) week commenced with the ISM Manufacturing PMI decreasing to 50.3, above the contraction threshold of 50.0. Meanwhile, ISM Manufacturing Prices Paid rose to 62.4, signalling inflation worries.

Nvidia Stock Decline

Nvidia’s stock dropped 9% amid news of their products reaching China despite restrictions. The DJIA continues to hover near key moving averages, facing potential further declines after a recent swing low at 43,200.

The DJIA represents 30 prominent US stocks and is calculated based on their share prices. Various factors influence its performance, including macroeconomic data and Federal Reserve interest rates.

Trading strategies include ETFs, futures contracts, options, and mutual funds. Dow Theory outlines trends based on movement and volume analysis between the DJIA and Dow Jones Transportation Average.

With the Dow Jones Industrial Average sliding sharply, giving up 640 points from its opening, it’s evident that market anxiety remains high. A key concern stems from tariff threats, which historically have had ripple effects on broad market sentiment. Any indication of further trade restrictions sends investors adjusting their risk exposure, particularly in industries reliant on international supply chains. Such developments, combined with the broader economic picture, contribute to the choppy trading behaviour we see unfolding.

As we move further into Nonfarm Payrolls week, manufacturing data from the Institute for Supply Management (ISM) provides mixed signals. While the Manufacturing PMI remains marginally above contraction territory at 50.3, it’s the rise in Prices Paid to 62.4 that stirs inflation concerns. When businesses report higher costs, downstream effects often follow, potentially influencing Federal Reserve decisions on monetary policy. Those engaging in derivatives markets will need to assess shifts in rate expectations, as even subtle changes in sentiment can drive volatility in indices and yield-sensitive assets alike.

Nvidia’s sharp decline of 9% is a reminder of how policy issues and geopolitical tensions continue to affect individual stocks. Reports suggesting that certain products made their way into China despite restrictions triggered a knee-jerk reaction in the stock. Moves of this magnitude in leading technology shares often translate into broader index reactions, not just affecting the Nasdaq but spilling over into the DJIA and S&P 500 as well. If concerns grow, they could weigh further on sentiment across the technology sector.

Looking at broader positioning, we notice the DJIA is still hovering in proximity to key moving averages. After dipping towards 43,200 in its latest swing low, the prospect of further declines depends in part on the strength of the next few economic data releases. Technical traders will have noticed the interplay between recent support zones and price action, seeking confirmation of whether downside momentum is building or whether buyers are stepping in. Support from institutional flows, particularly around prior lows, could indicate potential stabilisation.

Dow Jones Composition

The index itself represents a collection of 30 well-established US stocks, calculated based on their share prices rather than market capitalisation. This makes it particularly sensitive to price swings in higher-weighted components. Economic data and interest rate expectations remain key drivers, meaning any deviation from anticipated payroll numbers or inflation figures could introduce fresh catalysts.

When navigating this environment, traders have several instruments at their disposal. Exchange-traded funds (ETFs) allow for broad exposure, while futures contracts and options offer ways to position for directional moves or hedge against risk. Mutual funds tend to be longer-term in nature, making them less sensitive to short-term fluctuations. Those following Dow Theory will continue monitoring the DJIA alongside the Dow Jones Transportation Average, seeking confirmation of broader trends through their movement and volume patterns.

Given the current backdrop, price reactions to upcoming data will provide valuable insight into sentiment and momentum shifts. Whether markets stabilise or continue lower will rest on both economic indicators and investor interpretation of policy risks.

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NZD/USD experienced a slight increase, ending a five-day decline, though gains remain restricted. After dropping below the 20-day Simple Moving Average (SMA) and reaching a low not seen since mid-February, the pair found some stability as selling pressure lessened.

Currently, resistance is identified at 0.5680 and support is positioned around 0.5580. Momentum indicators show a fragile recovery, with the Relative Strength Index (RSI) increasing yet still in negative territory, which implies that selling pressure persists.

Macd Signals Downside Risks

The Moving Average Convergence Divergence (MACD) has crossed below its signal line, indicating ongoing downside risks. A consistent rise above the 0.5680 level may provide support for upward movement, while a drop below 0.5580 could lead to further declines towards 0.5540.

In simple terms, what we see is that the recent downward trend appears to be taking a pause, but this does not necessarily mean a reversal is underway. The pair has struggled to maintain momentum above short-term resistance, and technical indicators suggest that bearish pressure has not vanished entirely. The RSI is turning upwards but remains in territory that suggests weakness. The MACD, too, is positioned in a way that typically signals further downside potential.

From here, what matters most is whether prices can sustain moves beyond nearby levels. A push higher that holds above 0.5680 could encourage more buying, possibly shifting sentiment in favour of the upside. However, if sellers reassert themselves and price slips below 0.5580, that would open the door for another wave lower, potentially down to 0.5540.

Key Levels To Watch

Short-term traders should watch for price reactions at these key levels. If the pair continues to struggle with upside momentum while indicators remain weak, it would suggest that rallies could be short-lived. On the other hand, if we see a stronger push upwards with improving technical signals, the possibility of a more extended recovery would need to be reassessed.

For now, the focus remains on how price behaves around these thresholds. If pressures persist and the market fails to reclaim lost ground, further softness would not be unexpected. Staying alert to shifts in momentum will be key, as any unexpected strength or renewed selling could quickly force adjustments.

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The upcoming data agenda centres on the minutes from the Reserve Bank of Australia’s February meeting. At this meeting, the Bank cut rates for the first time since November 2020, after commencing a rate hiking cycle in May 2022.

The Bank’s rate held steady at 4.35% since the last hike in November 2023. Attention on the minutes will focus on potential timelines for future rate cuts, especially in light of rapid changes in offshore economic conditions.

Economic Calendar Overview

The economic calendar for Asia on 04 March 2025 includes previous results and consensus expected figures, particularly for New Zealand and Australia.

The central bank’s recent move to lower borrowing costs was widely anticipated, but how policymakers discussed this shift is what matters most now. When we examine the upcoming minutes, the tone and reasoning behind their decision will offer hints about what might happen next. If they show broad agreement among members that further cuts are needed, that will shape expectations. On the other hand, if there were disagreements, that could slow down any further moves.

These minutes will also need to be considered alongside the latest global economic indicators. With overseas markets adjusting to new inflation trends and policy shifts, there’s a growing need to assess how local policymakers view these shifts. If the commentary suggests worries about global instability, it could mean a more careful approach going forward.

Australia and New Zealand both have data scheduled that could influence expectations on 4 March. Previous figures and forecasts will set the backdrop, but the real focus will be on whether incoming numbers reinforce or challenge what’s already known. Any unexpected results here could prompt a fresh look at future policy adjustments.

Market Positioning And Expectations

With all this in mind, the next few weeks will require close attention to official statements and economic reports. Every data release or policy comment has the potential to change expectations, and waiting to see how these factors align will be key. There’s little room for assumptions—each development should be viewed through the lens of what it means for market positioning and potential shifts ahead.

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US 10-year yields have decreased by 7 basis points to 4.16%, marking the lowest rate this year and approaching the December low of 4.126%. Levels to monitor include 4.00% and a September low of 3.60%, which were associated with concerns about a slowing US economy.

The decline in yields may lead to similar circumstances as inflation concerns persist. In tandem, the USD/JPY currency pair has formed a double bottom near 148.50, with the current spot rate around 100 pips above this level. In September, the pair fell to 140.00 as yields reached their lowest point.

Connection Between Bond Yields And Currency Markets

These moves show how connected bond yields and the currency market are. The drop in yields suggests that investors may be positioning for slower economic growth or an adjustment in expectations for Federal Reserve policy. Lower yields tend to make the US dollar less attractive, and this can influence how different markets behave.

Given this, the recent pattern in USD/JPY is worth following. The double bottom around 148.50 indicates a level where buyers have stepped in twice, preventing further declines. Right now, the price sits a little higher, but if US yields continue to slide, history suggests the pair could revisit levels last seen in September. Market participants who were around then will remember that the pair dropped sharply to 140.00 when rates were in a similar position.

Bond traders are already watching the 4.00% mark on the 10-year yield closely. The last time this level was tested, it was linked to worries about growth losing steam. If yields approach that point again, it could reinforce those same fears. Below that, 3.60% remains tied to the deeper concerns that were at play last September.

We have seen before how these types of moves influence decision-making across different markets. Inflation remains a topic that keeps resurfacing, which means every shift in expectations around Federal Reserve policy adds an extra layer of complexity. If bond yields continue to move lower, the US dollar’s reaction could resemble past behaviour.

Market Reactions To Changing Yields

This is the kind of environment where various markets begin to align. Lower yields can put pressure on the dollar, and that in turn creates ripple effects for assets that are sensitive to currency movements. In these situations, we tend to see volatility pick up in certain corners of the market, especially if economic data reinforces the direction bond traders are leaning towards.

There are always inflection points where market behaviour starts to reflect shifting expectations. Recent moves suggest we may be in one of those periods again. Familiar price levels are coming back into focus, and decisions taken now could have a lasting impact on how the next few weeks unfold.

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During a recent announcement regarding chip factories, Trump reiterated plans to impose 25% tariffs on imports from Canada and Mexico. This statement resulted in a roughly 60-pip increase for the USD/CAD and a decline in US equities.

He also reaffirmed the reciprocal tariffs set for April 2. Additionally, Trump expressed the belief that Ukraine’s President Zelensky should show more gratitude and indicated that the minerals deal with Ukraine is not concluded. He stated intentions to negotiate with various parties to resolve the conflict in Ukraine while asserting that there is little opportunity for a deal with Canada and Mexico.

Market Sensitivity To Policy Shifts

This comes at a time when markets have been sensitive to any policy shifts, particularly those affecting global trade. The immediate reaction in USD/CAD reflects how quickly traders factor in potential disruptions, with the currency pair climbing by roughly 60 pips following the remark. Meanwhile, US equities took a downward turn, showing that anticipation of tighter trade conditions has already started to weigh on investor sentiment.

With the 25% tariffs reaffirmed, pricing pressure on goods passing through North American supply chains cannot be ignored. Those directly affected will likely begin adjusting operations to absorb these added costs or pass them down the line. For market participants, this means volatility in sectors reliant on cross-border trade, with companies shifting strategies to remain competitive.

The comments on Ukraine add another dimension. By suggesting that Zelensky should express more appreciation, Trump draws attention to ongoing tensions regarding military and economic aid. This fuels speculation about potential shifts in diplomatic priorities, while bringing uncertainty over resource agreements. The reference to minerals—as yet unresolved—raises the question of how future negotiations might unfold, particularly given the broader geopolitical stakes.

His statement about Ukraine negotiations suggests willingness to engage in talks with multiple parties, yet the stance on Canada and Mexico reflects a different approach. Tariffs on North American trade partners appear locked in, with no apparent interest in finding a middle ground. Businesses relying on these supply routes may soon need to account for long-term disruptions, since comments like these indicate that sudden policy reversals are unlikely.

Trader Reactions And Market Positioning

For those tracking near-term price movements, such announcements create fast-moving conditions. The quick reaction in currency and equity markets serves as a reminder that traders are factoring these developments in almost instantly. This makes it necessary to stay ahead of how policies are likely to be perceived, rather than waiting for formal agreements to materialise.

All of this comes as tariff-related concerns continue to ripple through multiple sectors, affecting everything from industrial production to commodity pricing. As companies reassess supply lines and margins, shifts in market positioning could follow—giving traders an incentive to monitor upcoming statements for further adjustments. Anything hinting at enforcement measures or retaliatory steps could add to the recent trading patterns, with momentum building around these policy shifts.

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