The trading week begins with a focus on European business sentiment and US economic activity, setting the stage for broader market trends. Investors will be looking for early signs of economic resilience or weakness following recent central bank decisions.
KEY INDICATORS
Germany Ifo business climate index (March)
A key indicator of business confidence in Germany, the Eurozone’s largest economy.
Any weakness could weigh on the euro and European equity markets.
US Chicago Fed national activity index (February)
A composite measure of economic activity and inflationary pressure in the US.
A strong reading may reinforce hawkish Federal Reserve expectations, impacting bonds and the dollar.
Market positioning after Fed rate decision (19 March)
Investors will react to any shifts in sentiment following the Federal Reserve’s recent policy announcement.
Expect volatility in US equities, the dollar, and Treasuries as traders digest the Fed’s long-term outlook.
MARKET MOVERS
USD/JPY
Possible short preference
Short positions below 149.523 with targets at 149.263 & 148.956 in extension.
Alternative scenario
Above 149.869 look for further upside with 150.089 & 150.396 as targets.
The RSI is mixed.
BofA sees potential for a strong dollar rebound on portfolio rebalancing
Bank of America (BofA) analysts have highlighted significant currency rebalancing needs that could drive a robust rebound for the US dollar.
According to their research, an expected shift in investment flows towards dollar-denominated assets, particularly equities, may occur, as US equities have underperformed compared to their European counterparts.
BofA’s analysis suggests a substantial rebalancing inflow into the dollar, quantified at +2.6 standard deviations (σ), while predicting outflows from the euro (EUR), Japanese yen (JPY), British pound (GBP), and emerging market (EM) currencies.
The analysts at BofA recommend hedging strategies in anticipation of these shifts, specifically suggesting 2-week put options on the EUR/USD pair, expiring on 2 April 2025, which coincides with the deadline for the upcoming tariffs.
Gold prices pull back from record high on reports of softer Trump tariffs
Gold prices fell in Asian trading on Monday, retreating further from record highs after reports suggested that US President Donald Trump’s 2 April tariffs will be less severe than initially feared, dampening demand for safe-haven assets.
Despite the decline, gold remained close to recent peaks, as ongoing uncertainty over the US economy and Trump’s broader tariff plans continued to support safe-haven buying.
Spot gold slipped 0.2% to USD 3,018.51 per ounce.
Gold futures expiring in May steadied at USD 3,049.30/oz.
Spot prices reached a record high of USD 3,057.50/oz last week.
A series of key US economic reports – including purchasing managers’ index data, the PCE price index, and a revised fourth-quarter gross domestic product figure – are due this week.
Platinum futures rose 0.3% to USD 981.15/oz.
Silver futures climbed 0.7% to USD 33.735/oz, after both metals posted losses last week.
XAU/USD
Possible long preference
Long positions above 3035.57 with targets at 3046.10 & 3057.39 in extension.
Alternative scenario
Below 3021.85 look for further downside with 3014.83 & 3004.00 as targets.
The RSI is bullish and calls for further upside.
TODAY’S NEWS HEADLINES
Dow futures jump 300 points on reports Trump will hold back some tariffs
Stock futures rose early on Monday following reports that US President Donald Trump plans to hold back some of the tariffs initially scheduled for 2 April, raising hopes that the US will avoid plunging the global economy into an all-out trade war.
Futures linked to the Dow Jones Industrial Average advanced 305 points, or 0.7%.
S&P 500 futures gained 0.9%.
Nasdaq 100 futures climbed 1.2%.
Stocks are coming off a much-needed winning week, with the S&P 500 finishing in positive territory on Friday, thereby avoiding four consecutive weekly losses.
European markets open higher; British Airways owner IAG up 1% after Heathrow Airport restart
European markets opened higher on Monday after US President Donald Trump hinted at possible tariff “flexibility.”
The pan-European Stoxx 600 was up 0.5% shortly after the opening bell.
Germany’s DAX rose 1.05%.
France’s CAC 40 gained 0.65%.
The UK’s FTSE 100 was 0.49% higher.
The travel and leisure sector advanced 0.8% after London’s Heathrow Airport reopened on Saturday, following a power outage caused by a fire at a nearby electrical substation that disrupted services on Friday. British Airways owner IAG rose 1% in early trading.
Oil inches up as markets weigh sanctions on Iran and Russia-Ukraine ceasefire talks
Oil prices edged higher on Monday as investors weighed the impact of fresh US sanctions on Iranian exports against ongoing ceasefire talks aimed at ending the Russia-Ukraine war, which could potentially increase Russian supplies to global markets.
Brent crude futures gained 4 cents, trading at USD 72.20 a barrel by 7:35 AM GMT.
US West Texas Intermediate (WTI) crude rose 8 cents, or 0.1%, to USD 68.36 a barrel, although prices had fallen earlier in the session.
Both benchmarks settled higher on Friday, recording a second consecutive weekly gain, as new US sanctions on Iran and the latest OPEC+ output plan raised expectations of tighter global supply.
