There are no major expiries to consider for today, so market sentiment will largely reflect yesterday’s movements. The dollar is in a mixed position, with USD/JPY lingering around its December lows below 150.00.

Ten-year Treasury yields are decreasing, approaching the 100-day moving average of 4.38%. This is a key level to observe as the week progresses.

EUR/USD remains below the crucial 1.0500 level, having retreated after an early rise. A negative risk mood has contributed to US stocks ending lower, as they await Nvidia’s earnings release.

Additionally, month-end flows may complicate market readings in upcoming sessions. Overall, expiries will not significantly affect trading sentiment today.

With no major option expirations influencing price action, investors are left to focus on broader market trends. Since there is no external pressure from large contracts rolling off, attention naturally shifts to how assets performed in the last session.

The dollar’s position varies depending on the pair in question. Against the yen, it remains weak. USD/JPY is still near its lowest level since December, trading under 150.00. This suggests traders are cautious, and it keeps intervention risks in view. With Japan’s authorities watching movements closely, any sharp declines could prompt action.

In the bond market, movements in US Treasury yields are drawing attention. The ten-year yield is edging lower and is now nearing the 100-day moving average of 4.38%. This threshold is one to watch closely. If yields dip below that mark convincingly, it could reinforce expectations of further declines, which would have clear knock-on effects for currency markets and equities.

Meanwhile, the euro remains under pressure. EUR/USD has failed to reclaim 1.0500, reversing after an initial attempt to move higher. A softer risk environment has added to downward momentum, contributing to weakness in US stocks. Market participants are treading carefully ahead of Nvidia’s earnings. The company’s results will likely influence sentiment, given its role in shaping expectations in the technology sector.

There is also the complication of month-end flows. These can create noise and make short-term price movements harder to interpret. As the final days of the month approach, adjustments by asset managers and corporate hedgers may temporarily mask underlying trends.

For now, with options-related influences taking a back seat, trading will be shaped by sentiment shifts, technical signals, and macroeconomic factors.

In Asian trading on February 25, 2025, the U.S. dollar initially strengthened following President Trump’s confirmation of upcoming tariffs on Mexico and Canada. However, the dollar’s momentum faded, with the euro, Australian dollar, New Zealand dollar, British pound, and Canadian dollar all recovering from their lows.

Japan’s January services PPI data showed a rise of 3.1% year-on-year, up from 2.9% in December, leading USD/JPY to briefly surpass 150.30 before falling back below 150.00.

The Bank of Korea also made a widely anticipated move, lowering its benchmark rate from 3% to 2.75%.

Federal Reserve Bank of Chicago President Austan Goolsbee stated that the Fed is adopting a “wait and see” approach regarding the impact of new administration policies on inflation.

In China, the People’s Bank of China drained 200 billion in its monthly Medium-term Lending Facility operation while keeping the MLF rate stable at 2%. Additionally, the central bank set its USD/CNY reference rate at its strongest point since January 20.

Chinese tech stocks experienced a near 5% drop but rebounded to positive territory within 90 minutes.

The dollar’s initial strength came as traders reacted to Donald’s tariff confirmations, but resistance emerged as other currencies clawed back losses. Traders initially sought safety in the greenback, but its edge faded as broader sentiment improved. The euro and commodity-linked currencies led the charge, recovering once the knee-jerk reaction settled. Sterling found buyers after hitting session lows, while the loonie benefited from steadier risk appetite.

Japan’s services inflation data brought a brief jolt to the yen pair, hinting at persistent pricing pressures in non-manufacturing sectors. USD/JPY breached 150.30 as the figures crossed, but momentum quickly reversed. That level has proven to be a magnet for official scrutiny in the past, making any sustained push above it uneasy ground. Traders faded the move, and with recent rhetoric from policymakers, speculation about intervention will remain present.

South Korea’s central bank acted within expectations, trimming its policy rate to 2.75%. The cut had been telegraphed, so won movements were measured. The bank’s statement leaned cautious, suggesting officials prefer a balanced approach as they gauge inflation risks.

Austan’s remarks reinforced the Fed’s hesitancy to commit to a policy shift too early. The wait-and-see stance, particularly amid tariff-related developments, indicates that officials are watching for any inflation persistence before adjusting course. Market participants took note, as pricing for rate cuts later in the year remained largely steady after his comments.

China’s central bank maintained its MLF rate, choosing instead to drain excess liquidity. That move suggests officials are walking a fine line—supporting growth without overstimulating. At the same time, the fixing of USD/CNY sent a message. By guiding the reference rate to its firmest in over a month, authorities signalled efforts to manage foreign exchange expectations.

Chinese tech shares endured a sharp sell-off but found dip buyers. After tumbling nearly 5%, funds moved in, flipping prices green within an hour and a half. The rapid reversal suggests sentiment remains fragile but far from outright bearish.

Gold prices have dropped from recent highs, reaching around $2,929 due to profit-taking, although concerns around US trade policies are expected to limit further declines. Speculation about potential Federal Reserve rate cuts may also provide support for the metal.

The US dollar’s bounce from a two-month low didn’t help the gold price much, while ongoing trade tensions are fuelling caution regarding the global economy. Recent US macro data has strengthened views for rate reductions later this year.

Near-term price consolidation may occur, with dip-buying expected around the $2,920-$2,915 zone. Additional support levels are noted at $2,900 and $2,880; a break below these could lead to further declines.

We’ve seen gold pull back after reaching fresh highs, with traders locking in profits following a strong rally. But expectations around US economic policy and interest rates should keep downside pressure in check. With concerns about trade policy still present, the metal remains well-supported at lower levels.

Recent US economic data has further strengthened views that the Federal Reserve may have to ease policy in the coming months. This expectation is keeping interest in gold intact, particularly as we inch closer to potential policy shifts. Traders are likely to remain watchful as further confirmation from policymakers could increase volatility.

Meanwhile, the dollar has stabilised after hitting a two-month low, but this hasn’t noticeably impacted gold movements. Market sentiment remains cautious, especially given ongoing global trade tensions. These factors could contribute to further safe-haven buying, preventing any deep corrections.

For now, we may see gold consolidate around the latest levels, as buyers seem eager to step in near the $2,920-$2,915 range. Should prices dip further, additional interest is expected near $2,900 and $2,880. If those levels fail to hold, further selling pressure could emerge, prompting a broader pullback in the short term.

Given the uncertainty surrounding future rate moves, traders should be prepared for sudden shifts. Any changes in expectations could fuel quick swings in price, making it necessary to stay ahead of potential catalysts.

Lorie Logan, President of the Federal Reserve Bank of Dallas, will address the 2025 BEAR Conference focused on central bank balance sheets. The conference will include a question and answer session following her presentation.

Lorie is set to speak at the 2025 BEAR Conference, where she will cover central bank balance sheets in detail. After her presentation, she will take questions. This gives us a chance to learn how she sees policy choices shaping up over the next year.

Her remarks matter given her role in the Federal Reserve system, particularly when it comes to setting interest rates and managing liquidity. When Lorie shares her outlook, it will give us a better sense of what may come next.

Recent statements from her suggest she pays close attention to financial conditions and whether markets are adjusting in ways that align with policy goals. If she expands on this, it could offer insight into how much room there is for further policy moves.

We are watching for any change in tone compared to her previous comments. If she signals concern about inflation pressures picking up again, it may suggest tighter policy for longer. If she focuses more on easing financial strains, the direction could be different.

Beyond Lorie’s speech, the question and answer session could be just as revealing. These exchanges often bring out viewpoints that might not be as clear in prepared remarks. If she is asked about balance sheet adjustments or interest rate path expectations, her responses could shift market expectations quickly.

Heading into this event, understanding past policy discussions helps frame what to focus on. If her comments align with earlier ones from the Federal Reserve, it may reinforce what we already expect. If she departs from prior messaging, traders may have to rethink positioning.

This session may also be the right moment to gauge whether officials see financial conditions as tight enough. Any sign that further measures are in play could be important. If she points to concerns around market stability, it may hint at how soon adjustments would come.

What we take from Lorie’s remarks will matter beyond just this event. If her message matches others in the Federal Reserve, positioning could remain steady. But if she takes a different approach, it could force a shift in market expectations.

Swati Dhingra from the Bank of England confirmed her dovish stance, emphasising that gradual rate cuts will still keep monetary policy restrictive and impact the economy. She voted for a 50 basis point cut on 6 February alongside Catherine Mann.

Chief Economist Huw Pill is expected to address market rate expectations, which remain cautious despite Governor Andrew Bailey’s comments on inflation being temporary. Predictions suggest three more rate cuts this year due to a deteriorating fiscal situation, although EUR/GBP upside is seen as limited due to the euro’s own challenges.

Swati and Catherine’s push for a larger rate cut shows that some within the Bank of England believe monetary policy is still too restrictive, even with inflationary risks in the background. A 50 basis point reduction would have marked a bold shift, but the majority prefer smaller adjustments. That suggests traders betting on a sharp fall in rates may need to reset expectations.

Huw, as usual, will probably attempt to manage market hopes. Given that rate expectations have stayed controlled—despite Andrew hinting that inflation pressures could be short-lived—there’s little risk of a dramatic policy change just yet. Traders should expect more of the same from him: balancing inflation concerns with the need to avoid suffocating growth.

Predictions of three rate cuts this year highlight worsening fiscal conditions, meaning policymakers may not have the freedom to hold rates high for too long. However, those watching EUR/GBP should be aware that the euro is facing its own obstacles. Any upward moves in the pair will have limits, as economic struggles elsewhere in Europe prevent a one-sided trend.

In the coming weeks, positioning should focus on the likelihood of gradual adjustments rather than a policy shift that catches markets off guard. If rate cuts are coming, they seem unlikely to be rushed. The challenge now is in determining precisely when the first move comes, and whether external pressures force action sooner than policymakers would prefer.

Tesla has released software updates for its customers in China.

These updates add Autopilot functionality for urban roads, improving the existing Navigate on Autopilot system.

The vehicles can now manage exit ramps and intersections and can identify traffic lights.

Furthermore, the system is capable of executing maneuvers, including driving straight, turning, and making U-turns.

It can also automatically change lanes according to speed and route conditions.

If no navigation route is designated, the vehicle selects the best road based on real-time information.

This development follows an extended period of anticipation from customers in China. Tesla had previously introduced similar capabilities in other regions, but regulatory concerns and local testing requirements delayed the broader adoption within this market. With this update, owners of compatible vehicles can now experience a more refined version of the driver assistance system, though it still requires active supervision from the person behind the wheel.

In practice, the improvements allow for smoother handling in complex urban environments. Previously, the system’s strengths were primarily exhibited on highways, where traffic patterns are more predictable, and manoeuvres involve fewer sudden stops or unpredictable elements. Now, as Autopilot navigates city streets, it can recognise and react to a wide variety of road signals and situations. The ability to adjust speed dynamically based on surroundings is particularly useful in dense traffic, where conditions often shift rapidly.

Elon, as ever, remains vocal about the company’s ambitions in automation, though Tesla continues to reinforce that this is not fully autonomous driving. Drivers are expected to remain attentive at all times, a message underscored by frequent prompts to keep hands on the steering wheel. Automatic lane changes, which rely on Tesla’s suite of cameras and sensors, are smoother and more context-aware, reducing the chances of abrupt or unnecessary shifts. This refinement is part of a broader push to enhance confidence in assisted driving technology.

Given the strong demand for software-driven vehicle improvements in China, the timing of this release is notable. The company faces increasing pressure from both domestic competitors and regulatory bodies, making continuous software enhancement a necessity rather than an option. The ability of these updates to balance improved automation with stringent local requirements could play a role in customer retention.

Throughout the automotive sector, discussions around assisted driving technologies have intensified. Some manufacturers approach this space with a more conservative outlook, avoiding advanced rollouts until stricter regulatory frameworks exist. Tesla has taken the opposite route, deploying updates at a rapid pace and refining capabilities through real-world usage. This method has drawn scrutiny at times but has also allowed faster development cycles compared to more cautious competitors.

The impact on broader market sentiment will become clearer in the weeks ahead. Investors typically react swiftly to software updates of this nature, particularly when they introduce capabilities that could affect long-term adoption rates. Updates that improve vehicle utility without requiring hardware modifications tend to be well received, as they provide a direct boost to perceived value.

Given these recent changes, the direction of regulatory response also warrants attention. Authorities in China have taken an increasingly active role in overseeing automated driving features, meaning further refinements or restrictions could follow. Tesla’s ability to align its software updates with these evolving expectations will serve as a key factor in maintaining compliance and customer trust. Those monitoring developments closely will be weighing the balance between enhanced system capability and potential regulatory scrutiny.

Bank of England Chief Economist Huw Pill is scheduled to deliver closing remarks at the central bank’s annual research conference on Tuesday at 1400 GMT, which is 0900 US Eastern time. This event marks an important occasion for discussions related to monetary policy and economic research.

Huw’s comments will likely provide more insight into the Bank of England’s thinking on inflation, interest rates, and economic conditions. Given the timing, his remarks may influence expectations about future policy decisions. When a key figure at the Bank speaks, markets tend to listen carefully.

The focus remains on whether rate cuts will arrive sooner or later. With inflation still above the Bank’s target, officials have been cautious. However, recent economic data shows some signs of slowing, which could make room for a shift in approach. If Huw signals that current rates are enough to bring inflation under control, it may steer expectations toward potential adjustments in the coming months.

At the same time, financial markets have already priced in certain assumptions about the future path of interest rates. Any suggestion that these expectations are incorrect could lead to adjustments in asset prices and market positioning. If Huw leans towards a more restrictive stance, borrowing costs in certain areas might rise. But if his tone hints at eventual relief, traders may react accordingly.

We will also be paying attention to how global factors come into play. Economic conditions in the US and Europe continue to shape market sentiment. Shifts in Federal Reserve policy can influence decisions at the Bank of England. If Huw acknowledges external risks, it could be a signal that policymakers remain cautious about moving too quickly.

As always, timing matters. His remarks come after the latest economic data releases and before another key policy meeting. If traders sense a shift in thinking, we could see adjustments in market expectations. Those who react swiftly to any fresh signals may find opportunities. If his speech reinforces what is already expected, market movement may remain limited.

Huang Yiping, an advisor to the People’s Bank of China, indicated that the Chinese Consumer Price Index (CPI) is expected to decline moderately in February. He added that external factors will exert pressure on domestic demand this year.

Adjustments in the property market are causing a contraction in demand. Tariff increases from the Trump administration could sharply reduce China’s exports to the US.

In related economic activities, the PBOC has conducted a one-year Medium-term Lending Facility worth CNY300 billion at an interest rate of 2.0%. Meanwhile, the Australian Dollar remains stable amid heightened risk aversion.

Huang expects the downward movement in the CPI to be moderate. That suggests inflationary pressures are weak, which typically signals that demand is softening. Weak demand in China, the world’s second-largest economy, tends to have repercussions beyond its borders. Given that much of the country’s economy depends on domestic spending and exports, traders should be aware that low price growth could mean slower economic expansion. Inflation isn’t falling dramatically, but it isn’t rising at a pace that would suggest strong activity either.

He also points to external elements putting strain on domestic demand throughout the year. That is worth paying attention to because if demand remains weak over an extended period, policymakers may feel compelled to intervene. Traders and investors should therefore be prepared for decisions from the central bank designed to counteract these effects.

The troubles in the property sector are a known issue. Housing demand isn’t what it was, and that filters through to other industries. When fewer people buy homes, they don’t take out large loans. And when construction slows, fewer raw materials are needed. That reduces economic activity in those related sectors. This is not a short-term adjustment.

Then there’s the matter of the tariffs. The prospect of higher duties on exports to the US is no small issue. If enforced, they would make Chinese goods more expensive in one of its largest markets. This would inevitably squeeze manufacturers. Fewer exports mean lower production, which leads to reduced earnings and possibly job losses. That would weaken consumer spending further back home.

On the central bank side, the People’s Bank of China has deployed a one-year Medium-term Lending Facility, funnelling liquidity into the financial system. The size is considerable, and the interest rate attached to it is low. This points to authorities ensuring access to credit remains inexpensive. When central banks take these steps, they are usually trying to boost lending and economic activity without resorting to more aggressive moves. This should be seen as part of the broader effort to maintain stability in an environment where the risks, as outlined earlier, remain present.

Meanwhile, the Australian Dollar is not showing much movement despite the widespread cautious sentiment in global markets. The stability suggests that while traders are cautious, they are not yet reacting in a way that would send the currency lower. It is often sensitive to shifts in market confidence, particularly when there are risks related to China. If uncertainty builds over the coming weeks, the lack of volatility in the currency may not last.

The Trump administration is pursuing tighter controls on semiconductor exports to China. This involves encouraging Japan and the Netherlands to align with US restrictions and potentially implementing tighter controls on Nvidia chip exports.

Furthermore, the US is assessing stricter measures regarding Chinese manufacturers SMIC and SCMT. Meetings have taken place between US officials and their counterparts from Japan and the Netherlands to prevent engineers from Tokyo Electron and ASML from servicing semiconductor equipment in China.

Washington is striving to limit Beijing’s access to advanced chip technology, not just by tightening its own export controls but by urging allies to follow suit. Aligning policies with Tokyo and The Hague would make it far harder for Chinese firms to secure essential semiconductor components. Restricting Nvidia chip exports is another move being considered, particularly as these components play a vital role in artificial intelligence and high-performance computing.

Scrutiny extends beyond restricting physical goods. Officials are questioning how much technical support Chinese companies should receive. Talks with Japan and the Netherlands indicate an effort to cut off maintenance services for machines essential to Beijing’s chip production. If engineers from Tokyo Electron and ASML are prevented from servicing equipment, this could hamper operations at key Chinese manufacturers, including SMIC and SCMT.

Such measures would create further bottlenecks for China’s push toward semiconductor self-sufficiency. Without access to Western machinery and expertise, producing advanced chips becomes far more difficult. While Beijing has been investing heavily in domestic alternatives, restrictions on maintenance and technical assistance could slow progress.

For markets, these developments carry weight. Regulations affecting Nvidia chip exports would have direct implications for technology companies relying on these components. Any shift in trade restrictions will influence supply chains, affecting chipmakers and the industries depending on them.

Geopolitical tensions are driving these regulatory efforts. Policymakers in Washington view advanced semiconductors as a matter of national security, not just trade. The reliance on Japanese and Dutch cooperation shows that isolating China’s access to these technologies is not something that can be done unilaterally. It requires coordination among countries holding key positions in the semiconductor industry.

Price action will reflect how traders assess these policy manoeuvres in the coming weeks. As discussions continue, company valuations could move based on expectations of stricter restrictions or policy shifts. Market participants should follow developments closely to gauge any further steps taken by Washington, The Hague, or Tokyo.

Major currency pairs experienced limited movements on Monday due to a lack of high-tier economic data. On Tuesday, the European Central Bank will release Negotiated Wage Rates for Q4, while the US will see regional manufacturing surveys and the Consumer Confidence Index.

The US Dollar Index started the week under selling pressure, reaching below 106.20 but later fluctuated above 106.50. The index has been affected by a cautious market mood.

EUR/USD opened positively, rallying above 1.0500 but entered a consolidation phase above 1.0450. GBP/USD experienced a minor decline, remaining above 1.2600, while USD/JPY initially rose but retreated to 149.60.

Japan’s Corporate Service Price Index showed a 3.1% year-on-year increase in January. Gold prices reached an all-time high above $2,955 before correcting to below $2,940.

Market participants began the week with subdued price action, given the absence of data releases capable of driving volatility. As we advance into Tuesday, attention will turn towards Europe’s latest wage figures and survey-based indicators from the United States, which could shift sentiment if they outperform or disappoint. These releases, while not top-tier, will still provide insight into economic momentum.

The US Dollar came under pressure in early trade, pushing the Dollar Index towards 106.20. However, as sentiment remained cautious, the index found some footing and rebounded above 106.50. This back-and-forth movement suggests that markets are waiting for clear direction from incoming data before making decisive moves. The way investors react to Tuesday’s figures will set the stage for how the currency behaves in the coming days.

The Euro gained some traction at the start of the week, climbing past 1.0500 against the Dollar. However, as buyers struggled to maintain momentum, the pair drifted lower but held above 1.0450. Similarly, Sterling faced mild selling pressure yet managed to remain above the 1.2600 threshold. The Japanese Yen saw an early push higher in USD/JPY, only to reverse course towards 149.60. The movement in this pair highlights traders taking profits amid uncertain risk sentiment.

Japan’s latest Corporate Service Price Index showed a 3.1% increase from a year earlier, reinforcing the view that pricing pressures remain persistent in the services sector. While this is not the primary inflation gauge for monetary policymakers, it does offer clues about how inflation dynamics are playing out beneath the surface. This could become more relevant as markets assess future moves by the Bank of Japan.

Commodities saw a volatile start to the week, particularly in gold. The precious metal surged to a fresh record above $2,955 before retreating slightly below $2,940. Price swings of this nature underscore the tug-of-war between safe-haven demand and profit-taking by short-term traders. With inflation and geopolitical risks still in focus, gold’s ability to hold elevated levels will be key in gauging broader market sentiment.

For traders dealing in derivatives, volatility expectations and positioning around these developments will be key in shaping short-term strategies. While the lack of major events on Monday kept price action restrained, the unfolding data cycle could lead to sharper moves as expectations adjust accordingly.