Daily Market Outlook, March 10, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute...

Futures on Wall Street declined Monday as deflationary pressures in China heightened global growth concerns amid a sluggish U.S. economy and escalating trade tensions. Hong Kong's Hang Seng dropped 1.8%, mainland Chinese blue chips fell 0.7%, and Taiwan's stock index slid 0.5%. Japan's Nikkei rose 0.4% after fluctuating. China's consumer price index saw its steepest drop in 13 months in February, while producer prices declined for the 30th consecutive month. At the National People's Congress, Beijing pledged new stimulus measures to boost consumption and AI innovation. Meanwhile, U.S. President Trump avoided recession predictions linked to tariffs during a Sunday Fox interview. Weak U.S. economic data revealed slower job growth in February, marking a shift in Trump's policy approach toward long-term economic changes despite short-term impacts. U.S. Treasury yields also fell, with the 10-year yield down 6 basis points to 4.257% and the two-year yield down 4.5 basis points to 3.956%.

The upcoming week will focus on the February CPI release in the US, alongside the University of Michigan's consumer sentiment and a government funding deal. Additionally, forthcoming indicators encompass the monthly GDP in the UK, wage data in Japan. The primary macroeconomic data release scheduled for next week is the US Consumer Price Index report, which will be published on Wednesday. Markets anticipate a moderation in month-over-month gains for both the headline measure (+0.3% compared to +0.5% in January) and the core measure (+0.26% versus +0.4%).The PPI report is scheduled for release on Thursday, with markets predicting a month-over-month increase in the headline figure of +0.3%, a decrease from +0.4% in the prior month. In addition to inflation data, attention will also be directed towards the University of Michigan's consumer survey results for March on Friday, in light of fluctuations in sentiment indices and increasing inflation expectations. Market watchers project a sentiment gauge of 69.0, Sentiment measures have been soft in March, suggesting a potential decline in the Michigan index. However, as the Michigan index was already low in February compared to other measures, it may stabilize this month. Early March sentiment data points lower, but further significant weakness in the Michigan gauge seems unlikely. February's drop was influenced by inflation expectations, which are expected to remain near February levels (4.3% for year-ahead, 3.5% long-term). A slight decrease in gas prices might nudge year-ahead expectations down slightly. In the United States, investors will monitor developments regarding the funding agreement prior to the March 14 deadline to prevent a government shutdown. A G-7 foreign ministers meeting is scheduled to take place in Canada from March 12 to 14. The United States is scheduled to impose tariffs of 25% on steel and aluminium imports from the European Union next Wednesday. On Monday, China will impose tariffs of up to 15% on various imports from the United States.

The primary focus from central banks will be the Bank of Canada's decision on Wednesday.  On that day, ECB President Lagarde will deliver a speech at the "The ECB and Its Watchers" conference, which will include several other ECB officials. The upcoming economic data from Europe will centre on the monthly UK GDP figures scheduled for release on Friday. Industrial production and trade figures will be released in Germany. In Asia, significant economic indicators include labour cash earnings and the Economy Watchers survey in Japan. Markets anticipate a decline in total cash earnings to 4.1% year-over-year, down from 5.3% in December. The Japanese Trade Union Confederation’s (Rengo) initial tally of shunto wage hike agreements on 14 March is likely the most significant event of the upcoming week.

Overnight Newswire Updates of Note

  • China’s Retaliatory Tariffs On US Farm Goods Take Effect Monday

  • China To Impose Retaliatory Tariffs On Some Canadian Products

  • Japan's Real Wages Drop In January, Spring Wage Talks In Focus

  • New Zealand Bank Leaders Urge Scrutiny Of RBNZ Capital Rules

  • Canada's Carney Jabs At Trump; PM Race Win To Replace Trudeau

  • Fed Expected To Cut In June As Jobs Data Raises Potential Red Flags

  • The Bond Market’s Trump Trade Is Looking Like A Recession Trade

  • Trump: US Economy Faces ‘Transition,’ Avoids Recession Call

  • Bitcoin Falls 5%; Volatility Continues On Trump’s Reserve Plan

  • Trump: I Expect Zelenskiy To Come Around On Minerals Deal

  • Trump: US Freeze On Ukraine Intel Sharing Just About Lifted

  • UK Seeks To Scale Back Reviews That Delay New Housing Projects

          (Sourced from reliable financial news outlets)

FX Options Expiries For 10am New York Cut

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.0400 (EU2.21b), 1.0325 (EU1.38b), 1.0350 (EU1.25b)

  • USD/JPY: 148.00 ($1.46b), 144.50 ($1.06b), 151.15 ($644.5m)

  • AUD/USD: 0.6400 (AUD758.1m), 0.6450 (AUD607.8m), 0.6300 (AUD447.3m)

  • USD/CAD: 1.4145 ($807.1m), 1.4500 ($794.7m), 1.4400 ($570.1m)

  • GBP/USD: 1.2205 (GBP459.3m)

  • NZD/USD: 0.5840 (NZD328.6m)

  • USD/KRW: 1374.50 ($328m)

CFTC Data As Of 7/3/25

  • CFTC positions for the week concluding on March 4th

  •  The net long position in Japanese yen stands at 133,651 contracts.

  •  The net short position in euros stands at -10,106 contracts.

  •  The net long position in Bitcoin stands at 614 contracts.

  •  The Swiss franc records a net short position of 37,775 contracts.

  •  The net long position for the British pound stands at 18,574 contracts.

  •  Equity fund speculators reduced the S&P 500 CME net short position by 48,053 contracts, bringing the total to 291,884.

  •  Speculators raise activity at CBOT.  The net short position in US Ultrabond Treasury futures decreased by 4,169 contracts, totalling 231,904. Equity Fund Managers reduced their net long position in the S&P 500 CME by 10,497 contracts, bringing it to 901,555. Speculators have shifted positions on CBOT.  US Treasury bond futures reflect a net short position of 17,797 contracts, a decrease from 40,912 net longs recorded the previous week.

  •  Speculators raised the net short position in CBOT US 2-Year Treasury futures by 21,846 contracts, bringing the total to 1,171,299.

  •  Speculators raised their net short position in CBOT US 10-Year Treasury futures by 12,185 contracts, totalling 712,040. Additionally, they increased their net short position in CBOT US 5-Year Treasury futures by 172,588 contracts, reaching 1,798,361.

Technical & Trade Views

SP500 Pivot 6040

  • Daily VWAP bearish

  • Weekly VWAP bearish

  • Seasonality suggests bearishness Into March 7th

  • Above 6075 target 6195

  • Below 6040 target 5675

EURUSD Pivot 1.05

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Seasonality suggests bearishness into March 30th

  • Above 1.0535 target 1.0860

  • Below 1.0505 target 0.9758

GBPUSD Pivot 1.26

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Seasonality suggests bearishness into March 10th

  • Above 1.2685 target 1.30

  • Below 1.2560 target 1.2450

USDJPY Pivot 151

  • Daily VWAP bearish

  • Weekly VWAP bearish

  • Seasonality suggests bullishness into Apr 9th

  • Above 1.5330 target 154.40

  • Below 151.30 target 148

XAUUSD Pivot 2800

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Seasonality suggests bearishness into mid/late March

  • Above 2800 target 2997

  • Below 2750 target 2650

BTCUSD Pivot 95k

  • Daily VWAP bearish

  • Weekly VWAP bearish

  • Seasonality suggests bullishness into Apr 9th

  • Above 95k target 105k

  • Below 95k target 65k