![\"\"](\"\/wp-content\/uploads\/2025\/03\/image-59.png\")
<\/figure>\n\n\n\nGBP \u2013 BoE decision to occur next week<\/h2>\n\n\n\n
On a monetary level, the BoE\u2019s interest rate decision is set to occur on Thursday. The majority of market participants are currently anticipating the bank to remain on hold with GBP OIS currently implying a 91.4% probability for such a scenario to materialize. Therefore, we would turn our attention to the bank\u2019s accompanying statement in order to gain greater insight into the bank\u2019s forward guidance. Specifically, should the bank imply that they may cute rates in their next meeting as is currently implied by GBP OIS, it may weigh on the pound. However, should they indicate that they may wish to remain on hold it could instead aid the GBP.<\/p>\n\n\n\n
\u2022 On a macro-economic level, we note that the UK\u2019s employment data for January is set to be released on Thursday which tends to coincide with the BoE\u2019s decision. Therefore, the release of the UK\u2019s employment data could play a role in the direction of the pound prior to the decision. Hence, should the employment data showcase a loosening labour market, it could weigh on the sterling. However, should the employment data showcase a resilient labour market, it could instead aid the pound.<\/p>\n\n\n\n
Analyst\u2019s opinion (GBP)<\/p>\n\n\n\n
\u00a0\u201cThe UK may suddenly find itself in trouble given that the tariffs imposed by the US also impact the UK\u2019s steel exports to the US. Therefore, the picture for the UK\u2019s economy remains muddy for the time being. In other news, of interest is of course the BoE\u2019s decision where the bank is expected to remain on hold. In our view, we wouldn\u2019t be surprised to see a nod from policymakers for a possible rate cut in their next meeting \u201d<\/em><\/p>\n\n\n\n On a macroeconomic level, of interest this week was Japan\u2019s GDP rate on a quarter-on-quarter basis for Q4\u00a0 which was released on Tuesday. The GDP rates may have disappointed Yen traders as they came in lower than expected at 0.6% versus 0.7% yet when compared to the prior quarter\u2019s rate of 0.3% it is still a welcome improvement. For next week we would like to note the release of Japan\u2019s CPI rates for February, which are set to be released on Friday. Should the CPI rates showcase an acceleration of inflationary pressures it may aid the Yen, as pressure may mount on the BOJ to hike rates in their next meeting. On the other hand, should the CPI rates remain steady or showcase easing inflationary pressures, then it could weigh on the JPY as the bank may remain on hold for a prolonged period of time.<\/p>\n\n\n\n That being said, on a monetary level the highlight for Yen traders might be the BOJ\u2019s interest rate decision on Wednesday in which the bank is widely expected by economists to remain on hold at 0.5%. In particular, JPY OIS currently implies a 91.6% probability for such a scenario to materialize. Hence, we would also turn our attention to the bank\u2019s accompanying statement for clues into as to how the bank may proceed in the future. In particular, we would like to point out that the bank is expected to remain on hold up until their July meeting, where JPY OIS currently implies a 42.6% probability for the bank to hike rates by 25 basis points. That being said, whether or not the bank hikes rates or not is currently a coin flip per JPY OIS with a 40.1% probability being attributed to the bank remaining on hold. Therefore, should the bank\u2019s accompanying statement imply that the bank may hike in the near future it could aid the JPY and vice versa.<\/p>\n\n\n\n Analyst\u2019s opinion (JPY)\u00a0<\/em><\/p>\n\n\n\n \u201cWe tend to highlight BoJ\u2019s decision as the main event for Yen traders in the coming week. We wouldn\u2019t be surprised to see the bank remaining on hold. However, the CPI rates which are due out on Friday could easily change the picture. \u201d\u00a0\u00a0<\/em><\/p>\n\n\n\n The EU has announced that it has launched the process to impose additional countermeasures on the US, which will target roughly \u20ac26 billion worth of goods. According to the Commission\u2019s press release \u201cin response to new US tariffs affecting more than \u20ac18 billion of EU exports, the Commission is putting forward a package of new countermeasures on US exports. They will come into force by mid- April, following consultation of Member States and stakeholders.\u201d Moreover, Comission President Ursula Von Der Leyen stated that \u201cThe countermeasures we take today are strong but proportionate\u201d and that the EU in the meantime \u201cwill always remain open to negotiation\u201d. The ongoing trade war may be of concern to the growth narrative in the EU, yet it appears that they are willing to negotiate. However, despite the tariffs being relatively proportional in nature, President Trump on Thursday threatened the EU with a 200% tariff on alcohol products. In conclusion, the trade war may be only just beginning and thus could have severe consequences both for the EU and the US down the line.<\/p>\n\n\n\n On a monetary level, ECB President Lagarde\u2019s comments earlier on this week may have aided the common currency. Specifically ECB President Lagarde warned that the trade war involving the US \u201cmight feed into inflation more directly and increase volatility\u201d and that the ECB \u201ccannot provide certainty\u201d in regards to the way forward. The comments made by ECB President Lagarde may imply that the bank could be preparing for a period of high volatility with potential fluctuations in inflation in the Zone. In turn, this may further imply that the bank could adopt a wait and see approach and thus could cut rates further down the line. Such a scenario may have aided the EUR, yet should financial releases stemming from the Zone imply that the economic situation may be taking a turn for the worse, it could force their hand.<\/p>\n\n\n\n On a macroeconomic level we note that Germany\u2019s ZEW economic sentiment figure for March is due out Tuesday. The financial release is considered to be a barometer for consumer spending in Germany and thus the financial release may be crucial and could influence the EUR\u2019s direction. Therefore should we see an improvement in the figure, it may imply consumer confidence in the economy has increased and could thus result into increased consumer spending which may aid the EUR. On the other hand a figure lower than the prior reading of 26, may imply that consumer confidence has decreased and may thus imply a reduction in consumer spending which in turn could weigh on the EUR.\u00a0<\/p>\n\n\n\n Analyst\u2019s opinion (EUR)<\/p>\n\n\n\n \u00a0\u201cEUR traders may be kept on the edge of their seats, as the EU Commission gears up for their trade war with the US. The proposal of tariffs on the US has resulted in President Trump announcing a possible 200% tariff on alcohol imported from the EU.\u201d<\/em><\/p>\n\n\n\n \u2022 On a monetary level and macroeconomic level, it was a pretty easy going week for Aussie traders with no major financial releases stemming from the country. However, next week interest may pick up for the Aussie with the nation\u2019s employment data for February being released on Thursday the 200th of March. The prior employment change figure came in at 44k, with the unemployment rate coming in at 4.1%, therefore a figure higher than 44k and an unemployment rate lower than 4.1% could imply a resilient labour market in Australia which in turn could boost the Aussie. On the flip side a figure lower than 44k and an unemployment rate higher than 4.1% could imply a loosening labour market which may weigh on the AUD.<\/p>\n\n\n\n Fundamentally, the Aussie could be influenced by the release of China\u2019s industrial output rate for February which is set to be released on Monday. Given the close socio-economic ties between Australia and China, the industrial output rate may play a role in the direction of the Aussie at least during Monday\u2019s trading session. Economists are currently anticipating the rate to decrease from 6.2% to 5.4% which may imply a reduction in industrial output and thus possibly a reduction in demand for raw materials from Australia and hence a reduction in demand for the AUD. However, should the rate exceed expectations it may instead aid the AUD.<\/p>\n\n\n\n Analyst\u2019s opinion (AUD) \u00a0\u00a0<\/p>\n\n\n\n \u201cOverall, given the low number of high-impact financial releases from Australia in the coming week, Aussie traders may focus on the fundamentals. Moreover, financial releases from China could also influence the Aussie.\u201d<\/em><\/p>\n\n\n\n On a political level, we note that Canada\u2019s ruling party the Liber party has announced that Mark Carney has won the race to succeed Justin Trudeau as Canada\u2019s prime minister. The shift is indicative of the changing geopolitical landscape in Canada and with Trump\u2019s recent attacks on the nation, the Liberal\u2019s now have a chance, according to the polls, to win once again, a scenario which seemed impossible just a month ago.<\/p>\n\n\n\n On a monetary level, we note that the Bank of Canada cut rates by 25 basis points as it was widely expected. The bank in its accompanying statement stated that \u201cThe Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth\u201d which could be imply that the bank\u2019s monetary policy decisions are bearing fruit. Yet, as we had expected the bank noted that \u201cheightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada\u201d. Essentially implying that the bank may be concerned about the return of inflationary pressures. Hence, it may imply that the bank may \u2018pause\u2019 its rate-cutting path, which in turn could aid the CAD.<\/p>\n\n\n\n On a macrolevel we highlight the release of Canada\u2019s February inflation print on Tuesday. Should the CPI rates come in lower than the prior readings it could allow the bank to continue cutting rates which in turn could weigh on the CAD. However, should the CPI rates remain near the 2% or come in higher than the prior readings it could allow the bank to remain on hold for a prolonged period of time which in turn could aid the Loonie.<\/p>\n\n\n\n Analyst\u2019s opinion (CAD)<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2025\/03\/image-60.png\")
<\/figure>\n\n\n\nJPY \u2013 BOJ decision on Wednesday<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2025\/03\/image-61.png\")
<\/figure>\n\n\n\nEUR \u2013 EU retaliates against the US\u00a0<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2025\/03\/image-62.png\")
<\/figure>\n\n\n\nAUD \u2013 Employment data next week<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2025\/03\/image-63.png\")
<\/figure>\n\n\n\nCAD \u2013 BoC\u00a0 cuts rates by 25 basis points<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2025\/03\/image-64.png\")
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