Weekly Analysis by zForex Research Team

[Z Forex]

Weekly Analysis By zForex Research Team (24-28 March 2025)​

Dollar Holds Firm as Fed Reaffirms Cuts, Euro and Pound Slip
The US dollar index rose toward 104 as the Fed signaled two cuts this year but saw no urgency. Powell downplayed Trump’s tariffs. The euro eased after Lagarde warned of weaker growth. The pound dipped below $1.30 as the BoE stayed cautious. The yen weakened to 149 as inflation eased but stayed above expectations.
Gold hovered near $3,030, eyeing a third weekly gain on Fed dovishness and safe-haven demand. Silver dropped over 2% to $33 amid China growth worries, but stayed near five-month highs due to supply concerns.
US Treasury yields slipped, with 2-year at 3.94% and 10-year near 4.22%, as Fed maintained a dovish stance. Japan’s 10-year yield was steady, while Germany’s retreated to 2.75%.

US Retail Sales (Feb)
Retail sales rose by 0.2% month-over-month in February, falling short of the 0.6% forecast but rebounding from January's revised -1.2% decline. Seven of thirteen retail sectors recorded contractions, with notable drops in food services (-1.5%), gasoline stations (-1%), and clothing stores (-0.6%). However, nonstore retailers led the gains with a 2.4% increase, followed by health and personal care stores (+1.7%). Core retail sales, which exclude autos, gas, food services, and building materials, posted a solid 1% gain, surpassing the 0.2% estimate and reversing a 1% decline in January.

BoJ Interest Rate Decision (Mar)
The Bank of Japan held its policy rate steady at 0.5%, maintaining the highest level since 2008. This decision follows a rate hike in January. The BoJ emphasized a cautious approach in light of global uncertainties, including US tariffs. Inflation remains elevated between 3.0% and 3.5% year-over-year, driven by rising service costs. Although wage growth is supporting domestic consumption, exports and industrial output continue to underperform. The central bank expects core CPI to rise gradually in the coming months.

EU CPI (Feb)
Eurozone inflation slowed to 2.3% year-over-year in February, down from 2.5% in January. The decline reflects a gradual easing in price pressures across the bloc, aligning with the ECB's broader disinflation trend.

Fed Interest Rate Decision (Mar)
The Federal Reserve left the federal funds rate unchanged at 4.25% to 4.50%, in line with market expectations. Policymakers reaffirmed their projection for two 25-basis-point cuts later in 2025, despite increasing economic risks. The Fed revised its 2025 GDP growth forecast down to 1.7% from 2.1%, while raising its inflation (PCE) forecast to 2.7%. The unemployment rate is now projected to rise to 4.4% next year. Additionally, the Fed announced that it will reduce its monthly Treasury redemptions from $25 billion to $5 billion starting in April, signaling a more cautious balance sheet runoff.

SNB Interest Rate Decision (Q1)
The Swiss National Bank cut its policy rate by 25 basis points to 0.25%, the lowest level since September 2022. February inflation dropped to 0.3%, down from 0.7% in November, mainly due to falling electricity costs. The SNB now forecasts inflation at 0.4% in 2025 and 0.8% through 2026 and 2027. GDP is expected to grow between 1% and 1.5% in 2025, supported by real wage gains, although external trade remains a downside risk.

BoE Interest Rate Decision (Mar)
The Bank of England kept interest rates unchanged at 4.5% in an 8–1 vote. Dissenting member Swati Dhingra called for a 25-basis-point cut. Inflation came in at 3.0% in January and is projected to rise to 3.75% by Q3 2025. The BoE highlighted ongoing risks from trade tensions and geopolitical instability, maintaining a cautious stance on policy easing.

US Initial Jobless Claims (mid-Mar)
Initial claims for unemployment benefits rose by 2,000 to 223,000, slightly under the consensus estimate of 224,000. Continuing claims increased by 33,000 to 1.87 million. Claims under the Disaster Unemployment Assistance (DOGE) program fell by 514 to 1,066. The labor market remains resilient, although some laid-off workers may not have filed yet due to ongoing severance arrangements.

Philadelphia Fed Index (Mar)
The Philadelphia Fed Manufacturing Index fell to 12.5 in March from 18.1 in February but still exceeded forecasts of 8.5. New orders declined to 8.7, and shipments dropped to 2.0. However, employment rose to 19.7, its highest level since October 2022. The prices paid index surged to 48.3, the highest since July 2022. While future activity and orders weakened, hiring expectations remained strong.

US Existing Home Sales (Feb)
Existing home sales increased by 4.2% to an annualized rate of 4.26 million units, surpassing the 3.95 million forecast. The median home price rose to $398,400, up 3.8% year-over-year. Inventory rose 5.1% to 1.24 million homes, representing a 3.5-month supply at the current sales pace.

Currencies
USD: The dollar index approached 104, supported by the Fed’s decision to maintain rates and reaffirm two cuts for 2025. Fed Chair Powell downplayed tariff-induced inflation, calling it transitory.
EUR: The euro fell below $1.085 after peaking at $1.09547 earlier in the week, pressured by ECB President Lagarde’s warning that a 25% US tariff could reduce eurozone growth by 0.3 to 0.5 percentage points. Markets do not expect further rate hikes from the ECB.
GBP: The pound slipped below $1.30 following the BoE’s rate hold and cautious forward guidance. UK unemployment held at 4.4%, while wage growth decelerated to 5.8%.
JPY: The yen weakened to 149 per USD as core inflation slowed to 3.0% in February, slightly above the forecast. The BoJ maintained its 0.5% rate and emphasized vigilance over global and FX risks.

Commodities
Gold: Prices hovered near $3,030 per ounce, closing in on record highs. Safe-haven demand, the Fed’s dovish outlook, and intensifying geopolitical tensions in Gaza and the Red Sea fueled bullish sentiment. Gold is up over 15% year-to-date.
Silver: Fell over 2% to around $33 due to concerns about China’s economic trajectory and ambiguous stimulus measures. Nonetheless, prices remain near five-month highs, underpinned by tightening supply and tariff-related disruptions.

Equities
Equity markets posted a mixed performance over the week. The Nasdaq ended largely unchanged, while the Dow and S&P 500 registered modest gains. Netflix led the upside among major tech stocks, followed by strong showings from Nvidia and Microsoft. On the downside, Meta and Tesla each declined by around 5%, with Amazon and Google also closing the week in negative territory.

 

[Z Forex]

Weekly Analysis By zForex Research Team (7 – 11 April, 2025)​

Markets Dive on Tariffs, China Retaliation and Recession Fears​

The dollar index stayed above 102, supported by strong U.S. jobs data but pressured by rising trade tensions. China’s new 34% tariff raised recession fears and increased Fed rate cut expectations.

The euro hovered near $1.10 with markets expecting an ECB cut in April. The pound dipped below $1.29. The yen firmed to 145, while the Australian dollar slid to $0.60 as markets priced in a possible 100 bps rate cut this year.

Gold fell 2.5% to $3,020. Silver dropped below $30, losing 12% this week as trade tensions triggered broad selling. China’s tariffs added pressure despite higher COMEX inventories. Brent crude declined 6.5% to below $66 after OPEC+ increased May output. Oil is set for a 10% weekly loss.

Bond yields declined as risk-off sentiment deepened. The U.S. 10-year yield fell to 3.97%. Germany’s yield dropped to 2.57%, and Japan’s slid to 1.17% after retreating from a multi-year high.

German CPI (Mar)
Germany’s inflation slowed to 2.2% YoY in March 2025, the lowest since November 2024, matching forecasts. The drop was led by services (3.4% vs 3.8%) and energy (-2.8% vs -1.6%), though food inflation rose to 2.9%. Core inflation eased to 2.5%, its lowest since June 2021. Monthly CPI rose 0.3%, down from 0.4% in February.

Chicago PMI (Mar)
Chicago PMI rose to 47.6 in March from 45.5, topping the 45.2 forecast. Activity still contracted for a 16th month but at the slowest pace since Nov 2023. Production increased, with small gains in jobs and orders. Supplier deliveries declined.

RBA Rate Decision (Apr)
The RBA held rates at 4.1%, as expected, after February’s 25bps cut. The bank sees inflation easing toward its 2–3% target but flagged global and domestic uncertainties, especially around U.S. tariffs. The Exchange Settlement balance rate remains at 4.0%.

ISM Manufacturing PMI (Mar)
The ISM Manufacturing PMI dropped to 49 in March from 50.3, below forecasts of 49.5, signaling contraction. New orders, backlogs, and jobs declined further. Prices jumped to 69.4, the highest since June 2022. Inventories rose; deliveries slowed slightly.

JOLTS Job Openings (Feb)
Job openings fell by 194K to 7.57M in Feb, below the 7.63M forecast. Declines were seen in retail (-126K), finance (-80K), hospitality (-61K), and manufacturing (-31K). Hires and separations held at 5.4M and 5.3M. Quits and layoffs were steady.

ADP Employment Change (Mar)
U.S. private payrolls rose by 155K in March, beating the 105K forecast. Services added 132K jobs, led by business services (+57K) and finance (+38K). Goods-producing sectors added 24K. Wages rose 4.6% for job-stayers and 6.5% for job-changers.

Initial Jobless Claims (Mar 29)
Initial claims dropped to 219K, beating the 225K forecast. Continuing claims jumped 56K to 1.903M, the highest since Nov 2021. Federal claims dropped by 257 to 564,
though severance packages are delaying benefit applications.

ISM Non-Manufacturing PMI (Mar)
The ISM Services PMI fell to 50.8 in March from 53.5, missing forecasts. New orders, inventories, and employment all slowed. Prices eased to 60.9. Backlogs contracted for the 7th time in 8 months. Tariff concerns are rising, but the outlook remains mixed.

Nonfarm Payrolls (Mar)
U.S. jobs rose by 228K in March, beating the 135K forecast. Gains were strongest in healthcare (+54K), retail (+24K), and transportation (+23K). Federal jobs fell to 4K. January and February figures were revised down by 48K total.

Unemployment Rate (Mar)
Unemployment rose to 4.2%, the highest since November, slightly above the 4.1% forecast. The labor force grew to 163.51M and participation ticked up to 62.5%. The U-6 rate dipped to 7.9% from 8.0%.

Average Hourly Earnings (Mar)
Wages rose 0.3% MoM to $36.00, matching forecasts. Nonsupervisory pay rose 0.2% to $30.96. Yearly wage growth slowed to 3.8%, slightly below the 3.9% estimate.

Currencies
The dollar index held near 102 after strong U.S. jobs data, though trade tensions rose as China imposed a 34% tariff on all U.S. goods. Markets now expect up to four
Fed rate cuts in 2025.

The euro stayed near $1.10 with ECB cut bets rising. The pound fell below $1.29 on growth concerns, while the yen climbed to 145 as a safe haven. The Aussie dropped to $0.60 amid recession fears and expectations of RBA rate cuts.

Commodities
Gold fell 2.5% to $3,020 and silver slid below $30, down 12% for the week, as broad market selling intensified.
Brent crude dropped 6.5% to under $66 after OPEC+ raised output. Oil is set for a 10% weekly loss despite being excluded from U.S. tariffs.

Equities
U.S. stocks posted sharp weekly losses amid Trump’s tariff shock. The Nasdaq fell 9%, the S&P 500 dropped 8%, and the Dow lost 7%. Apple fell 13%, Nvidia 14%, and Amazon 10%. Automakers globally were hit hard.

 

[Z Forex]

Weekly Analysis By zForex Research Team (14-18 April, 2025)​

Dollar Hits 3-Year Low After China’s 125% Tariff Retaliation
The U.S. dollar index fell to 99, a near three-year low, as trade tensions intensified. China hiked tariffs on U.S. goods to 125% after Washington raised rates to 145% on Chinese imports. The euro jumped above $1.14, up 3.5% for the week, while the pound rose past $1.30 on strong UK GDP. The yen also gained on safe-haven demand and a Treasurie selloff.

Gold hit a record above $3,250, driven by safe-haven demand and a weaker dollar after China raised tariffs to 125% in response to U.S. hikes. Silver climbed past $31.20 for a third day, supported by soft inflation and Fed rate cut bets. Brent crude rose 2.3% to $64.70 on U.S.-Iran tensions but ended the week lower amid demand concerns and OPEC+ output hikes.

Bond selling resumed this week. U.S. 10-year yields rose to 4.48%, while 2-year yields neared 3.96%. Japan’s 10-year yields rebounded to 1.30%, reversing last week’s decline.

RBNZ Interest Rate Decision
The RBNZ cut its official cash rate by 25bps to 3.50% in April 2025, the lowest since October 2022 and in line with expectations. This marks 200bps of cuts since August amid global trade war concerns. Inflation remains within the 1–3% target, with core inflation on track. Q4 2024 inflation was 2.2%, the lowest since Q1 2021, and GDP grew 0.7% after two quarterly declines.

US CPI (Mar)
US annual inflation fell to 2.4% in March, the lowest since September, down from 2.8% and below 2.6% expectations. Gasoline prices dropped 9.8%, fuel oil 7.6%, while natural gas rose 9.4%. Housing inflation slowed (4% vs 4.2%), used cars (0.6% vs 0.8%), and transport (3.1% vs 6%). Food inflation rose to 3%. Monthly CPI fell 0.1% (vs expected +0.1%). Core inflation dropped to 2.8%, the lowest since March 2021, with monthly core CPI up just 0.1% (vs 0.3%).

Initial Jobless Claims
Initial claims rose by 4,000 to 223,000 in early April, matching expectations. Continuing claims fell by 43,000 to 1.85 million, beating the forecast of 1.88 million. Federal program claims rose by 56 to 508, the lowest under Trump’s presidency. Many DOGE layoffs came with severance packages, delaying filings.

UK GDP (Feb)
UK GDP grew 0.1% q/q in Q4 2024, after flat Q3. Services rose 0.1%, construction 0.3%, and industrial output fell 0.4% (vs -0.8%), mainly from basic metals and transport equipment. Household spending was revised up to 0.1%, and government spending rose 0.5%, driven by public services.

US PPI (Mar)
US PPI dropped 0.4% in March, the first decline since Oct 2023, against expectations of +0.3%. Goods prices fell 0.9% due to an 11% gasoline drop; services fell 0.2% led by a 1.3% fall in machinery and vehicle wholesaling. Core PPI rose 0.1% (vs 0.3%), and annual core slowed to 3.3% from 3.5%. Headline PPI rose 2.7% y/y, a six-month low (vs 3.3% expected).

German CPI (Mar)
Germany’s inflation eased to 2.2% in March (vs 2.3%), the slowest since Nov. Services inflation fell to 3.5% (from 3.8%) and energy prices dropped 2.8%. Food inflation rose to 3% from 2.4%. Core inflation fell to 2.6%, the lowest since June 2021. Monthly CPI rose 0.3%. EU-harmonized inflation fell to 2.3% y/y, with a 0.4% monthly rise.

Currencies
The USD index fell to 99, its lowest in nearly 3 years after China raised tariffs on US goods to 125% in retaliation for the US’s 145% hike. The dollar lost 2% on the week. The euro rose above $1.14 for the first time since Jan 2022, up over 3.5%. The pound climbed past $1.30, near its 6-month high, after a surprise 0.5% UK GDP rise in February. Rate cut expectations for the BoE were revised down to 66bps from 79bps. The yen strengthened to its highest since Sept 2024 on safe-haven demand and a US Treasuries selloff. Rising US-China tensions continue to shake global currency and asset markets.

Commodities
Gold surged above $3,250 on Friday, hitting a new record as safe-haven demand soared amid rising US-China trade tensions and a weaker dollar. China raised tariffs on US goods to 125%, following the US’s 145% hike, affecting nearly $700B in trade. Silver climbed above $31.20 for a third session, supported by dollar weakness and soft US core inflation, which supported Fed rate cut expectations.
Brent crude rose 2.3% to $64.70 on Friday after the US threatened to block Iranian oil exports, but trade tensions and OPEC+’s surprise output increase pressured demand outlooks. Brent still ended the week down 1%.

Equities
US stocks rallied last week. The Nasdaq jumped 7%, the S&P 500 gained 6%, and the Dow rose 5%. Apple advanced 6%, while Nvidia soared 17%, leading the tech-driven recovery.