Important calendar events
The dollar remained flat last week, and the dollar index hovered close to 104.1. U.S. Treasury yields gained strength mid-week but gave up their gains at the end of the week, with the US 10-year bond yielding approximately 4.24%.
The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate to a target range of 4.25% to 4.50%. Policymakers remained cautious and opted to keep interest rates steady under a climate of economic and inflationary statements.
The Fed, however, updated its “dot plot”, which is a summary of the central bank’s economic projections and reflects the central bank’s rate outlook. The latest FOMC dot plot indicates that policymakers expect to deliver approximately two more rate cuts this year of 25 basis points each, raising market expectations of future rate cuts. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible.
Fed Chair Jerome Powell delivered a hawkish message after the policy meeting, stating that the central bank is not in a hurry to lower interest rates. Powell cited economic instability and elevated inflation risks due to trade tariffs as the reasons behind the Fed’s decision to keep interest rates steady.
US President Donald Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. Trump has threatened to impose reciprocal tariffs on many countries, which would raise US import taxes to match those imposed by the country’s other trading partners. Markets this week will continue to focus on Trump’s economic policies and trade tariffs, and Trump’s statements are likely to cause volatility in the price of the dollar.
Trump’s tariffs may spark global trade wars and are causing turmoil in markets. Import taxes will raise the price of many products, fuelling inflationary pressures. Other nations are likely to reciprocate with tariffs of their own, starting global trade wars, which may lead to economic deterioration and rising inflation in many countries. Trump’s economic policies are raising concerns that the US economic growth will slow down. Many analysts are already expressing concerns that the US will enter a recession.
On Thursday, Trump announced that he will postpone tariffs for automobile parts. According to Reuters, automobiles will be subject to the 25% tariff after April 2, but tariffs on automobile parts will be delayed for up to a month.
On the data front, Core PCE Price Index, which is the Fed’s preferred inflation gauge, came in above expectations on Friday, reigniting inflation concerns. Core PCE Price Index rose by 0.4% in February from 0.3% in January, beating expectations of 0.3%. Annual core PCE rose to 2.8% in February from 2.6% the previous month.
University of Michigan (UoM) data released on Friday were disappointing, raising stagflation concerns. The UoM Consumer Sentiment Index for March came in at 57, against expectations of a 57.9 print, while UoM Inflation Expectations for March rose to 5.0% from 9.9% previously.
Final GDP data on Thursday showed that the US economy expanded by 2.4% in the final quarter of 2024, against previous estimates of 2.3%, following a 3.1% expansion in the third quarter of 2024. In addition, the US economy expanded by 3.0% in the second quarter of 2024 and by 1.4% in the first quarter. US Unemployment Claims released on Thursday dropped to 224K for the week ending March 22 from 225K the week before, against expectations of a 225K print.
US Durable Goods Orders came in higher than anticipated on Wednesday, boosting the dollar. Durable Goods Orders rose by 0.9% in February against expectations of a 1.1% contraction, but fell below January’s print of 3.2%. Core Durable Goods, which exclude automobiles, came in at 0.7% in February, surpassing expectations of 0.2%, as well as January’s print of 0.1%
The US Conference Board (CB) Consumer Confidence report was released on Tuesday, and it was less optimistic than anticipated, putting pressure on the dollar. The report showed that consumer confidence dropped in March, indicating reduced consumer spending.
Headline inflation in the US rose by 2.8% year-on-year in February after rising by 3.0% in January against expectations of a 2.9% print. Monthly inflation rose by just 0.2% in February, after rising by 0.5% in January against a 0.3% rise anticipated. Core CPI, which excludes food and energy, rose by 0.2% in February, which was significantly lower than January’s reading of 0.4% and fell below expectations of 0.3%. Annual Core CPI rose by 3.1% in February, below the 3.2% estimate, down from 3.3% in January.
This coming week, markets will likely experience some turbulence as Trump’s tariffs are expected to hit markets on Wednesday, April 2. Most countries will seek to negotiate with Trump’s administration over the implementation of the tariffs, leading to increased market volatility.
In addition, important economic activity data are coming up this week, and especially US labor data. Manufacturing PMI data and JOLTS Job Openings are due on Tuesda,y and on Wednesd,ay ADP Non-Farm Employment Change. Services PMI data and Unemployment claims are due on Thursday. This week’s most highly anticipated data are the labour data due on Friday and especially Non-farm Payrolls or NFPs.
EUR/USD traded sideways last week, oscillating around the 1.081 level. If the EUR/USD pair declines, it may find support at 1.071, while resistance may be encountered near 1.095.
The ECB lowered its benchmark interest rate by 25 basis points at its latest policy meeting, bringing its main refinancing rate down to 2.65% from 2.90%. In her speech after the policy meeting, ECB President Christine Lagarde reiterated her former statement that the central bank’s policy will remain data dependent and warned that the ECB will need to stay vigilant in these uncertain times.
US President Donald Trump threatened Europe and Canada with high tariffs last week. Trump stated on his social media platform that if the EU and Canada work together to do economic harm to the US, he will impose large-scale tariffs on both of them. On Thursday, US President Donald Trump announced that he will impose a 25% tariff on automobiles after April 2. Several EU countries, such as France, Italy, and Germany, export cars to the US and will be affected by these tariffs. Germany, in particular, sells 13% of its total automobile exports to the US. According to Reuters, the EU is preparing its response to the import tariffs announced by the US.
EU spokesman Olof Gill stated on Thursday that a robust and timely response is being prepared to Trump’s tariffs. EC Vice President Luis de Guindos warned that while the tariffs are likely to have only a temporary effect on inflation, they may inflict lasting damage on the Eurozone’s economy.
Meanwhile, the European Commission is reportedly preparing concessions to the US to alleviate some of the tariffs imposed by Trump’s administration. Trump is expected to announce the tariffs on Wednesday, April 2, and most countries are in a frenzy to prepare countermeasures.
On the data front, the German IFO Business Climate Index rose to 86.7 in March from 85.3 in February, coming below market expectations of 86.8.
Revised GDP data showed that the Eurozone economy expanded by 0.2% in the final quarter of 2024 after expanding by 0.3% in the second quarter, against original estimates of 0.1% growth. The economic outlook of the EU remains fragile as prolonged tightening has brought the Euro area economy to the brink of recession.
Eurozone inflation rose to 2.3% year-on-year in February after rising by 2.5% in January, against a previous reading of 2.4%. Core CPI, which excludes food and energy, dropped to 2.6% in February from 2.7% in January.
GBP/USD remained rangebound last week, trading close to the 1.292 level. If the GBP/USD rate goes up, it may encounter resistance at 1.301, while support may be found near 1.286.
British Finance Minister Rachel Reeves announced the government's budget for the year on Wednesday,y that included billions of pounds worth of spending cuts. Reeves reduced the government’s spending budget and cut welfare spending by approximately £4.8 billion. In addition, Reeves confirmed that the British government has revised the GDP growth for 2025 downward to 1% from 2% forecasted in autumn, due to global economic uncertainty.
On Thursday, US President Donald Trump announced that he will impose a 25% tariff on automobiles after April 2 as well as other reciprocal taxes. The Sterling, however, was boosted by hopes that the UK would be exempt from Trump’s tariffs, as the UK has enjoyed a close partnership with the US for many years. Reeves stated on Thursday that the UK is in intensive talks with the Trump administration to secure an exemption from US auto tariffs.
BOE policymakers kept interest rates steady in March and the Official Bank Rate was maintained at 4.5%. MPC members voted 8-1 to keep rates on hold, with only one member voting for a 25 basis point rate cut.
In his speech after the policy meeting, Bank of England Governor Andrew Bailey stated that there is a lot of uncertainty at the moment, but he still thinks that interest rates are on a declining path. The BOE currently anticipates that the British economy will grow by 0.25% in the current quarter, up from 0.1% previously.
On the data front, Final GDP data released on Friday for the fourth quarter of 2024 showed that the British economy expanded by 0.1,% matching previous estimates and following economic stagnation in the third quarter of 2024. The British economy contracted unexpectedly by 0.1% in January after expanding by 0.4% in December, missing expectations of 0.1% growth.
British retail sales rose unexpectedly by 1.0% in February against expectations of 0.3% contraction, according to data released on Friday, while January’s print was revised downward to reflect 1.4% growth.
British inflation data came in softer than anticipated on Wednesday, putting pressure on the Sterling. Headline inflation in the UK rose by 2.8% annually in February, down from 3.0% in January, against expectations of a 2.9% print. Core inflation, which excludes food and energy, rose by 3.5% year-on-year in February, falling below expectations of 3.6% as well as January’s print of 3.7%.
USD/JPY gained strength early last week, rising from 149.7 to 151,1 but pared gains later in the week, dropping back to 149.7. If the USD/JPY pair declines, it may find support at 146.5. If the pair climbs, it may find resistance at 151.3.
The BOJ held interest steady at 0.50% at its policy meeting in March. BOJ Governor Kazuo Ueda stated that the central bank will keep adjusting the degree of monetary easing to support the country’s economy. Ueda stressed, however, that inflation in Japan remains below the BOJ’s 2% target, lowering rate hike expectations and boosting the Yen.
Markets anticipate that the BOJ will raise interest rates at least one more time this year, and there is a high probability of a second 25-bp rate hike within the year. The BOJ is expected to raise interest rates by approximately 75 basis points in the next two years, which will bring the central bank’s peak rate to 1.25%.
The Yen gained strength last week after the release of the minutes of the BOJ policy meeting in January. The minutes revealed that most BOJ policymakers felt that the likelihood of Japan’s inflation rising above the central bank’s 2% target is high. Some BOJ members also opined that the central bank should continue tightening its monetary policy if the bank’s inflationary and economic targets were achieved.
On Thursday, US President Donald Trump announced that he will impose a 25% tariff on automobiles after April 2. Japan is a major importer of automobiles to the US, and the tariffs are likely to affect the country’s economy. Japan’s Prime Minister Shigeru Ishiba stated on Thursday that all options were open in response to the US tariffs.
Final GDP data for the final quarter of 2024 showed that the Japanese economy expanded by only 0.6% against expectations of 0.7% growth. Final GDP data for the third quarter of 2024 showed that Japan’s economy expanded by 0.3%, down from 0.7% in the second quarter.
Inflation in Japan is on the rise, raising the odds of future rate hikes and providing support for the Yen. The headline Tokyo CPI inflation rose to 3.4% annually in January from 3.0% in December. National Core inflation in Japan came in at 3.0% year-on-year in February against expectations of a 2.9% print, but came down from January’s 3.2% print. In addition, BOJ Core CPI remained steady at 2.2% year-on-year in February.
Gold prices hit a new all-time high of $3,086 per ounce on Friday and are poised for more gains. If gold prices rise, they may encounter resistance at the psychological level of $3,100 per ounce, while if gold prices decline, support may be encountered near $2,976 per ounce.
Gold prices remained bullish last week, hitting new record highs every day and reaching a new all-time high of $3,086 per ounce on Friday. Gold prices are trading in overbought territory but remain bullish, driven by geopolitical uncertainty and trade wars coconcernsand are likely to touch new historical highs in the following days.
Uncertainty over US President Donald Trump’s future policies and trade tariffs promotes a risk-averse sentiment that boosts safe-haven assets. Concerns that Trump’s trade policies may ignite global trading wars are raising the appeal of safe-haven assets, such as gold. Trump’s tariffs are likely to raise global inflation and lower the economic outlook, thus promoting a risk-averse sentiment. Trump’s economic policies are raising concerns that the US economic growth may slow down. Many analysts are already expressing concerns that the US will enter a recession.
On Thursday, Trump announced that he will postpone tariffs for automobile parts. According to Reuters, automobiles will be subject to the 25% tariff after April 2, but tariffs on automobile parts will be delayed for up to a month.
Gold prices have typically been directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar remained flat last week, and the dollar index hovered close to 104.1. U.S. Treasury yields gained strength mid-week but gave up their gains at the end of the week, with the US 10-year bond yielding approximately 4.24%.
Gold prices are supported by rising Fed rate cut expectations. The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate tina the target range of 4.25% to 4.50%.
The Fed, however, updated its “dot plot”, which is a summary of the central bank’s economic projections and reflects the central bank’s rate outlook. The latest FOMC dot plot indicates that policymakers expect to deliver approximately two more rate cuts this year of 25 basis points each, raising market expectations of future rate cuts. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible.
Fed Chair Jerome Powell delivered a hawkish message after the policy meeting, stating that the central bank is not in a hurry to lower interest rates. Powell cited economic instability and elevated inflation risks due to trade tariffs as the reasons behind the Fed’s decision to keep interest rates steady.
Geopolitical instability is raising the appeal of safe-haven assets such as gold. Hostilities in the Gaza area have been resumed, breaking the ceasefire deal between Israel and Hamas, boosting gold prices. Meanwhile, Russian President Vladimir Putin agreed to a ceasefire deal with Ukraine that involves attacks on each other’s energy infrastructure for 30 days.
Oil prices edged higher last week, with WTI price rising from $68.3 to $69.2 per barrel. If oil prices retreat, they may encounter support near $65.2 per barrel, while resistance may be found near $73.1 per barrel.
US crude oil inventories released on Wednesday showed an unexpected drop in US crude stockpiles, boosting oil prices. The US Energy Information Administration reported a weekly crude stockpile draw of 3.3M barrels for the week to March 21, against expectations of a rise by 1.5M barrels and following a rise by 1.7M barrels the week before
US President Donald Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. Trump has threatened to impose reciprocal tariffs on many countries, which would raise US import taxes to match those imposed by the country’s other trading partners.
Trump’s tariffs may spark global trade wars and are causing turmoil in markets. Trump issued an executive order on Monday to impose secondary tariffs of 25% on all imports from countries buying oil from Venezuela starting April 2. The secondary tariffs will come in addition to direct tariffs on Venezuelan oil exports, raising supply concerns and boosting oil prices.
On Thursday, Trump announced that he will postpone tariffs for automobile parts. According to Reuters, automobiles will be subject to the 25% tariff after April 2, but tariffs on automobile parts will be delayed for up to a month.
Oil prices have been volatile due to geopolitical instability. Hostilities in the Gaza area have been resumed, breaking the ceasefire deal between Israel and Hamas. On the other hand, Russia and Ukraine agreed to stop attacking each other’s energy infrastructure for 30 days. The ceasefire deal includes attacks on oil ships in the Black Sea. In addition, the US has agreed to lift some of the sanctions against Russia, putting pressure on oil prices.
OPEC+ has issued a new production plan to compensate for overproduction, boosting oil prices. OPEC’s new plan will be applied to seven of its member nations and will involve monthly oil production cuts, ranging between 189k barrels/day and 435k barrels/day.
Oil prices are kept in check by high central banks’ interest rates. The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate to a target range of 4.25% to 4.50%. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible.
Bitcoin price rose above the $88,000 level early in the week but declined later in the week, dropping below $82,000 over the weekend. If BTC price declines, support can be found at $76,500, while resistance may be encountered at $92,700.
Ethereum price rose to the $2,100 level early last week but dipped to 1,800 over the weekend. If the Ethereum price declines, it may encounter support near $1,750, while if it increases, it may encounter resistance near $2,300.
Most major cryptocurrencies are under pressure due to concerns that US President Donald Trump’s trade policies may start global trading wars. The uncertainty over Trump’s future policies and trade tariffs is generating a risk aversion sentiment, putting pressure on crypto markets. Trump’s tariffs are likely to raise global inflation and lower the economic outlook, promoting a risk-averse sentiment that puts pressure on crypto markets. Trump’s economic policies are also raising concerns that the US economic growth will slow down. Many analysts are already expressing concerns that the US will enter a recession.
On Thursday, Trump announced that he will postpone tariffs for automobile parts. According to Reuters, automobiles will be subject to the 25% tariff after April 2, but tariffs on automobile parts will be delayed for up to a month.
Trump has announced the creation of a national Bitcoin reserve, stressing his determination to make the US the crypto capital of the world. The US government will cease selling Bitcoin and will stockpile it instead as a store of value. Reports that US President Donald Trump is preparing lto aunch a new stablecoin owned by his family boosted crypto markets this week.
Cryptocurrency prices are also affected by central banks’ interest rates. High interest rates stifle economic growth, putting pressure on crypto markets. The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate to a target range of 4.25% to 4.50%. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Written by:
Myrsini Giannouli
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