Japan’s services PPI for January is set to be released, while the goods PPI for the same month increased by 4.2% year-on-year, surpassing the expected 4.0% and an increase from 3.8% previously.

No specific expectation figures are provided for the services PPI, but a median consensus estimate stands at 3.1%.

The ongoing inflation pressure in Japan remains evident.

Additionally, a rate cut is anticipated from the Bank of Korea today.

Japan’s services producer price index (PPI) data for January is about to be made public. The goods PPI for the same period already showed a year-on-year rise of 4.2%, exceeding forecasts of 4.0% and improving from the previous reading of 3.8%. While there are no fixed projections for the services component, economists have settled on a median estimate of 3.1%.

Recent data makes it apparent that inflationary forces continue to shape Japan’s economy. Higher producer prices in the goods sector indicate that businesses are paying more for inputs, and these increases could filter into service-based industries. If the services PPI aligns with or exceeds expectations, it would reinforce the argument that price pressures are not confined to just one area.

On the central banking front, attention shifts to South Korea, where a rate cut is widely expected from policymakers. The decision would mark another development in the broader trend of Asian economies adapting to slowing growth and inflation dynamics. Adjustments in South Korean monetary policy could influence capital flows and exchange rate movements, which are of immediate relevance to those involved in currency and interest rate derivatives.

For markets monitoring Japanese data, confirmation of higher-than-expected services PPI figures would imply sustained price pressures, which could strengthen arguments for monetary policy adjustments in the future. However, if the figure falls below estimates, it may provide a counterpoint to the latest goods inflation numbers, suggesting that pricing power remains uneven across different sectors.

A scenario in which both Japanese inflation measures maintain their upward momentum would require some reassessment of policy expectations. While the Bank of Japan has remained measured in its approach, persistent inflationary signals may push discussions surrounding rate changes further into focus.

For now, the figures being released in the coming days should be viewed in connection with broader trends rather than in isolation. The results could influence expectations for future monetary policy not just in Japan but across the region.

The United States held a 2-year note auction, with a yield of 4.169%, slightly down from the previous yield of 4.211%. This reflects ongoing shifts in market dynamics influenced by broader financial trends.

In the currency market, AUD/USD is trading around 0.6350, impacted by stricter chip controls on China announced by President Trump. Meanwhile, USD/JPY remains near 150.00 as US Dollar strength persists amid trade war concerns.

Gold prices have seen a correction from record highs, driven by a recovering US Dollar and profit-taking, although fears about trade tensions help limit the decline. Ripple’s XRP also experienced a downturn, dropping nearly 10% following Tariff announcements.

Looking ahead, money market trends for 2025 suggest diverse dynamics across the Eurozone, US, and UK, with repo rates in the US becoming more attractive. This environment includes speculation regarding potential rate cuts by the Fed, similar to trends in the UK.

The outcome of the recent 2-year note auction shows a minor decrease in yield, moving from 4.211% to 4.169%. This decline suggests investor demand is changing in response to broader financial forces. Lower yields typically indicate greater demand, which may be tied to expectations around interest rates or economic conditions. For those navigating fixed-income derivatives, this shift is a useful gauge of where sentiment is heading.

In foreign exchange markets, the Australian Dollar is holding near 0.6350 against the US Dollar, partly due to stricter restrictions on chip exports to China. Policy decisions that affect global trade often have direct consequences on currency valuations, which must be taken into account. The US Dollar’s ongoing strength, particularly against the Japanese Yen, keeps USD/JPY close to the 150.00 level. This reflects both market uncertainties and the prevailing appeal of the Greenback.

Gold, having recently reached new highs, has undergone a retreat. The moderation in price is largely attributed to a recovering US Dollar and some market participants locking in profits. That said, concerns surrounding global trade policies have provided support, preventing a steeper decline. This balance of forces keeps bullion markets in flux. Meanwhile, XRP has seen a nearly 10% drop, following recent tariff announcements, demonstrating how policy shifts continue to ripple through cryptocurrency markets.

Looking ahead, trends in short-term funding markets for the coming year suggest different movements across the US, UK, and Eurozone. Repo rates in the US are becoming more attractive, which can have downstream effects on liquidity preferences. There is also ongoing speculation about possible rate cuts from the Federal Reserve, mirroring conversations taking place in Britain. Expectations around central bank decisions are shaping trading strategies, and staying ahead of these adjustments can create opportunities.

North American trading on 24 February 2025 saw US stocks decline despite discussions of a potential peace deal regarding Ukraine. The Dallas Fed manufacturing index fell to -8.3, its lowest since September 2024, contributing to the downward trend in indices.

The NASDAQ dropped by 248.55 points, while the S&P and Dow also experienced declines. Although a report indicated that a US-Ukraine minerals deal was close, it failed to boost stock performance significantly.

The US Treasury successfully auctioned $69 billion in two-year notes at a yield of 4.169%. In the forex market, the EURUSD fluctuated around 1.0466, and the GBPUSD traded near the 38.2% retracement level of 1.26076.

Bond traders reacted to the Treasury auction without much surprise, as the yield on the two-year note remained within expected ranges. With demand closely resembling recent auctions, broader market sentiment remained cautious. Equity traders paid more attention to the Dallas Fed data, which pointed to slowing economic conditions in Texas. Although this regional index does not always dictate national trends, its decline sparked discussions about manufacturing strength across other states.

Currency markets showed limited reaction to the Treasury auction results. The euro struggled to gain momentum after testing familiar levels against the dollar. Meanwhile, sterling held near its retracement mark, suggesting traders were hesitant to commit to a clear direction. The lack of a breakout reflected uncertainty in broader financial markets rather than any sudden shift in fundamentals.

Looking ahead, short-term interest rate expectations remain a primary focus. Federal Reserve officials have expressed mixed views on the timing of adjustments, keeping markets uncertain. Some anticipate slight policy shifts in response to economic data, while others argue for patience. Any fresh comments from policymakers this week could cause short-term volatility.

Commodity markets saw minor moves, with oil prices trading in a narrow range. Speculation around supply adjustments remains a factor, but no immediate shifts were evident. While some traders positioned for potential changes following developments in Ukraine, market participants largely waited for clearer signals.

With indices under pressure and economic signals mixed, short-term traders need to stay aware of potential catalysts. Inflation readings, central bank speeches, and geopolitical headlines continue to shape expectations. Those monitoring price movements should be prepared for shifts depending on how the next round of data unfolds.

There was a time when trading meant being tied to a desk, eyes glued to multiple screens, waiting for the perfect moment to make a move. It was a world reserved for institutional traders, hedge funds, and financial elites with access to cutting-edge technology. Today, that landscape has shifted.

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The Pound Sterling is stable against the US dollar, having reached a nine-week high of 1.2690 before settling at 1.2632. Optimism surrounds the Bank of England’s approach as UK Retail Sales and Consumer Price Index data suggest a moderate easing policy may be ahead.

GBP/USD opened the week positively, climbing above the mid-1.2600s, nearing a two-month peak reached on Friday. This movement is supported by a weaker US dollar sentiment and surpassing the 100-day Simple Moving Average.

This suggests that traders are increasingly confident in the Bank of England’s handling of monetary policy. Retail sales and inflation figures indicate that while the economy remains steady, there is enough easing in price pressures to justify a more balanced approach from policymakers. Markets appear to be pricing in the possibility that interest rates may not need to remain as restrictive as before.

The fact that the pound has sustained levels above 1.2600 implies that investors are not rushing to sell, and there may still be appetite for further gains if economic indicators continue to support this outlook. Breaking past a key technical marker like the 100-day Simple Moving Average shows that momentum has shifted, at least in the short term, in favour of sterling.

A softer US dollar has equally contributed to these gains. There has been reduced demand for the greenback, likely due to expectations that the Federal Reserve may not adopt a more restrictive stance in the immediate future. If the outlook for monetary policy in the United States remains steady or shifts towards a more cautious tone, this could provide additional support for the pound.

Looking ahead, traders should pay attention to upcoming economic releases from both the UK and the US. Signs of continued economic resilience in Britain, coupled with any weakness in American data, could push the pound higher. Conversely, if inflation or wage growth in either country creates new concerns for investors, this could quickly shift momentum the other way.

At these levels, price action will likely be sensitive to fresh information, and we should be prepared for swift moves in both directions as markets react.

Putin has stated that the US-Ukraine discussions regarding rare earth metals do not concern Russia. He indicated a willingness for Russia to collaborate with US entities on these metals and mentioned potential joint projects involving aluminium.

He argued that Trump’s intentions to improve Ukraine’s situation align with Ukrainian interests rather than Russia’s. Putin expressed openness to European involvement in the negotiations despite Europe severing contacts with Russia, and suggested possibilities for reducing defence budgets.

Trump, on the other hand, spoke about recent dialogues with Russia aimed at achieving a cease-fire in Ukraine. He emphasised the need for Europe to share the costs associated with the conflict, noting progress in creating a minerals deal for Ukraine.

Despite these discussions, financial markets showed little reaction, with the S&P down 5 points and the NASDAQ down 118 points. Concerns about underlying motivations and the genuine nature of these negotiations remain.

This dynamic presents a compelling scenario. Vladimir’s stance on rare earth metals diverges from typical geopolitical frictions. He downplays the relevance of American-Ukrainian agreements, instead offering collaboration with businesses from the United States—an approach that suggests a broader economic strategy rather than an adversarial position. Aluminium came up as well, implying opportunities that extend beyond just niche mineral extraction.

His view on Donald’s attempts to reshape Ukraine’s future is also noteworthy. He reframes them as initiatives strictly for Kyiv’s benefit, rather than something that affects Moscow’s strategic interests. This shift in language matters. By brushing aside tensions, he leaves room for economic discourse rather than prolonged political disputes. Even with Europe formally cutting ties, he keeps the door open to European contributions, suggesting ways to lower military expenditures. That, in itself, raises longer-term implications.

Donald, meanwhile, portrays discussions with Moscow as a step toward halting hostilities. A cease-fire, at least rhetorically, is now on the table. He reiterates his long-standing argument that European nations should shoulder a greater portion of the financial strain tied to the situation, reinforcing his preference for burden-sharing. He also points to headway in mineral negotiations for Ukraine—perhaps an effort to tie economic incentives to ongoing de-escalation talks.

Despite these carefully framed statements, markets were indifferent. The S&P barely moved, shedding 5 points, while the NASDAQ dropped 118. Traders seem unconvinced that these words will translate into immediate economic shifts. Hesitation stems from an underlying scepticism about what is truly driving these statements. Are these leaders positioning themselves for tangible agreements, or is this rhetoric aimed elsewhere? The hesitation speaks volumes.

For those navigating derivatives markets, this presents a clear challenge. Price swings may come not from these declarations themselves, but from how institutions interpret and act on them in the coming weeks. The lack of reaction so far does not mean conditions will remain stable. It means investors are waiting. If talks materialise into policy shifts—whether through trade agreements, defence spending cuts, or changed supply chain dynamics—certain asset classes could respond in ways not yet priced in.

Moreover, there is an economic undercurrent tied to resource security. Aluminium and rare earth elements are not just commodities; they are keystones of advanced manufacturing. If actual deals emerge, entities engaged in these industries will adapt accordingly. But if these talks prove to be political theatre, the current market apathy may persist.

We must continue to assess where concrete decisions might arise. Any movement in tariff adjustments, access rights, or state-backed agreements could drive fluctuations that catch markets off guard.

Gold’s price reached a record high of $2,956 during North American trading, supported by a stable US Dollar and unchanged US yields. This uncertainty surrounding trade policies under President Trump has influenced bullion prices amid escalating tensions involving the US, Canada, and Mexico.

The yield on the US 10-year Treasury note decreased to 4.443%, boosting precious metal values. Real yields are steady at approximately 2.017%, and mixed business activity data from the US reflects rising inflation expectations and declining consumer sentiment.

XAU/USD maintains an uptrend, although potential buyers may be cautious, indicated by an overbought Relative Strength Index. If the price surpasses $2,956, the next resistance level may be $3,000, while a drop below $2,916 could see it test $2,900.

Gold serves as a safe haven and hedge against inflation during economic instability. Central banks added 1,136 tonnes of gold in 2022, the highest yearly purchase on record, with notable increases from emerging economies.

The price of gold reacts to various factors, such as geopolitical unrest and interest rate changes. It generally rises when the Dollar weakens, while a stronger Dollar typically suppresses gold prices.

These shifts in gold prices, supported by a steady Dollar and consistent yields, show that the metal remains highly sought after during political and economic uncertainty. Seeing bullion climb to a fresh high of $2,956 suggests that traders are continuing to lean towards gold as a hedge, particularly with tensions growing between North American nations.

With the US 10-year Treasury yield dipping to 4.443%, precious metals received a natural lift. This, coupled with real yields holding at 2.017%, signals steady demand. Business activity data in the US paints a mixed picture, with inflation expectations increasing while consumer sentiment is weakening. Such conditions tend to bolster gold’s appeal as a store of value, given that inflation pressures erode the purchasing power of cash holdings.

As things stand, gold remains in an upward trajectory, though buyers might be hesitant to commit fully due to the Relative Strength Index entering overbought territory. If gold pushes past $2,956, the next hurdle lies at $3,000—an obvious psychological level that could act as a magnet for price action. However, if momentum falters and it slips under $2,916, then $2,900 would likely come into focus as the next support.

Given that demand remains strong from governments—central banks accumulated 1,136 tonnes of gold in 2022, marking the highest annual acquisition ever recorded—this provides another supportive factor. Much of this buying came from emerging economies, which have been increasing their reserves to reduce reliance on foreign currencies.

Gold’s behaviour is shaped by multiple influences, from geopolitical stress to changes in interest rates. When the Dollar loses value, this generally lifts gold, and the reverse is true when the greenback strengthens. Traders should remain alert to external events that might shift expectations around monetary policy or global stability, as these tend to be the most immediate triggers for price action.

Germany is contemplating EUR 200 billion ($210 billion) in emergency defence expenditure to rebuild its military. Chancellor-in-waiting Friedrich Merz is negotiating with the Social Democrats (SPD) to find ways to bypass borrowing restrictions.

The objective is to secure a vote before March 24 to prevent potential constitutional challenges. Funding strategies include creating a special fund for military spending and aid to Ukraine, expanding the existing EUR 100 billion defence allocation, and adjusting the “debt brake” for increased military borrowing, requiring a two-thirds majority.

Fringe parties have attained a blocking minority, complicating future votes. Merz has committed to enhanced military investment to address Russian threats amid existing political hurdles.

This discussion on Germany’s military financing should be viewed through the lens of political urgency rather than routine budgeting. The negotiations aim to bypass constitutional hurdles while securing enough parliamentary backing before a critical deadline. With opposition parties holding sway over specific votes, the process is anything but straightforward.

Friedrich faces a delicate balancing act, working with the SPD while circumventing potential roadblocks from smaller factions. The effort to expand defence funding extends beyond a singular budget increase—instead, it requires the reshaping of financial frameworks to accommodate long-term military commitments. One proposed method involves establishing a dedicated fund, shielding military expenditure from general budget constraints. Another involves modifying borrowing regulations, though this demands broad political backing.

We find that the timing raises the stakes. A deal must be struck swiftly to avoid unnecessary delays, which could introduce complications before a formal decision is reached. The March 24 deadline is not arbitrary. A failure to act promptly risks constitutional scrutiny, which could entangle defence financing in legal disputes. Given the political composition of Germany’s parliament, achieving the required majority presents a real challenge. Even though Friedrich’s party and the SPD may align on certain spending goals, smaller parties retain sufficient leverage to disrupt proceedings.

As the debate unfolds, Germany’s response to Russian military activity remains at the forefront. The trajectory of negotiations has broader implications, particularly for those considering risk in European markets. If political uncertainty grows, expect added volatility in financial instruments sensitive to German defence policy. Changes in borrowing rules could prompt shifts in government bond markets, affecting investor calculations.

The SPD may lean towards accommodating Friedrich’s goals, but internal disagreements could surface. Should coalition talks falter, new proposals might emerge, further complicating projections. If alternative funding structures gain traction, they could influence future budget protocols. Every revision to borrowing limits and spending mechanisms alters expectations about state-backed financial instruments. In particular, signs of hesitation from fiscal policymakers could have immediate repercussions.

For now, discussions remain fluid, with each development shaping potential outcomes. Negotiators must weigh immediate defence priorities against long-term fiscal constraints. Those watching these deliberations should pay attention to signs of parliamentary resistance. If smaller parties coalesce against major reforms, adjustments may be required, possibly leading to delays in proposed spending packages.

EUR/USD declined from an intraday high of 1.0530 to around 1.0460, influenced by a strong recovery in the US Dollar and concerns about potential political instability in Germany. The US Dollar Index rebounded to 106.40 following a drop to 106.10.

The US S&P Global PMI report indicated a slower rise in private business activity, with the Composite PMI falling to 50.4. A notable drop in the Services PMI to 49.7 was observed, while the Manufacturing PMI improved to 51.6.

Market expectations for a Federal Reserve interest rate cut in June rose to 63.5%. Weakness in the Euro resulted from Germany’s fractured political landscape, despite CDU leader Friedrich Merz securing majority votes.

German IFO data showed the IFO Business Climate at 85.2, below expectations. However, IFO Expectations improved to 85.4.

The 50-day Exponential Moving Average offers support for EUR/USD around 1.0437. Key support is at the February 10 low of 1.0285, while resistance stands at the December 6 high of 1.0630.

The recent movement of EUR/USD suggests that traders are taking a cautious stance as the US Dollar regains its strength. A retreat from 1.0530 to 1.0460 came as confidence in the greenback grew, supported by a broader market reassessment of economic conditions in the United States. Factors such as political concerns in Germany added further weight on the Euro, leaving it vulnerable. Meanwhile, the US Dollar Index’s rebound above 106.40 suggests investors are still leaning towards dollar strength, particularly following softer US data.

The drop in the US S&P Global PMI’s Composite measure to 50.4 indicates business activity remains stagnant. A slip in the Services PMI below 50 is particularly striking, as it signals contraction in a key component of the economy. In contrast, an uptick in the Manufacturing PMI to 51.6 suggests this sector is holding up better despite broader economic concerns. The reaction in interest rate expectations has been swift, with traders now assigning a higher probability—over 63%—that the Federal Reserve will cut rates in June.

Germany’s political worries have kept the Euro under pressure. Even though Friedrich managed to secure a majority in his party, broader fractures in the German political system remain. This uncertainty, paired with weaker-than-expected IFO Business Climate numbers at 85.2, has contributed to a lack of conviction in the Euro. However, it is worth noting that future expectations measured by the IFO did improve slightly.

For those watching EUR/USD, technical price levels remain important in the coming sessions. The 50-day Exponential Moving Average is providing a floor at 1.0437, meaning we may see buying interest emerge at this level. If the pair moves lower, the next key level to monitor would be the February 10 low at 1.0285. On the upside, the December 6 high of 1.0630 remains the next level traders would target should momentum shift in the Euro’s favour.

Decisions in the weeks ahead will be shaped by incoming economic data and shifts in risk perceptions. With political concerns lingering and market sentiment fluctuating, each development could push the balance one way or the other.

NZDUSD buyers are currently positioned against higher technical levels. The 100-hour moving average supported the price during today’s trading.

Last week, NZDUSD rebounded after finding support at the 200-hour moving average and rose above a key swing area (0.5683–0.5694). After breaking above the 100-hour moving average (near 0.5715), the pair surged to a weekly high of 0.57716.

Following this high, price action has been inconsistent, moving up and down. Today’s price action showed a high near Friday’s level, while the low held at the 100-hour moving average, indicating modest buyer strength.

Key technical levels include upside targets at 0.57492 and 0.5771, with downside support at the 100-hour moving average. Maintaining above the 100-hour MA suggests a bullish trend, while a break below may lead to a test of the 200-hour MA for further direction. Buyers remain in control for the time being.

The current setup shows that buyers are holding ground, with price staying above the 100-hour moving average, which has played an important role in recent sessions. While volatility has led to swings in both directions, market participants with long positions have managed to stop sellers from gaining too much control.

The move higher last week started with a bounce off the 200-hour moving average, pushing past a previous resistance zone between 0.5683 and 0.5694. Breaking above 0.5715, a level that previously acted as resistance, triggered further buying momentum, lifting price to 0.57716. However, since that peak, there has been less conviction, as price has fluctuated within a tighter range.

Today’s movement has adhered to this pattern. Buyers pushed price close to last week’s high, but there wasn’t enough strength to move decisively beyond it. At the same time, sell-offs have been met with buying interest at the 100-hour moving average, which remains a critical point for market structure. As long as price stays above this level, buyers hold short-term control.

If price rises, resistance exists just below 0.5750, followed by last week’s high at 0.5771. Moving higher than that would reinforce buyer confidence and could encourage more participants to follow the trend. On the other hand, if price fails to stay above the 100-hour moving average, momentum could quickly shift. A drop below would almost certainly bring the 200-hour moving average back into focus, where buyers previously stepped in.

For now, we see buyers maintaining positions, but recent price action suggests that upside movement is meeting resistance. Whether the current range holds or breaks will depend on how market participants react to these well-defined levels.