Daily Market Outlook, March 3, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute...
Crypto markets surged after Donald Trump announced a proposed digital asset reserve featuring Bitcoin, Ether, XRP, Solana, and Cardano. Bitcoin jumped 10%, and ether rose 13% before retreating as operational details remain unclear ahead of Friday's White House Crypto Summit. Analysts question funding sources, speculating seized crypto assets might be used, though their use wouldn’t create new demand. Meanwhile, uncertainty looms over Trump's proposed tariffs—25% on Mexico and Canada and 10% on China. U.S. Commerce Secretary Lutnick stated tariffs on Canada and Mexico could start Tuesday, but rates aren’t finalized. Delays or adjustments may occur depending on trade negotiations, with a possible postponement until April 1 for further study.
Economic concerns deepened as disappointing U.S. data pushed the Atlanta Fed GDPNow tracker from +2.3% to -1.5%. Tariffs are expected to hurt consumption, exacerbating an already weak outlook. January’s import spike, driven by tariff fears, inflated the trade deficit but may include non-monetary gold, not reflected in GDP. Markets remain sensitive to upcoming ISM data and payroll figures, with 73 basis points of Fed rate cuts priced in by January. Fed Chair Powell’s remarks post-payroll release will be closely watched.
Key events to monitor this week include the European Central Bank (ECB) policy decision on Thursday and the U.S. employment report on Friday. A 25 basis point reduction in the ECB's Depo Rate to 2.5% seems almost certain. Focus will likely shift to the updated staff macroeconomic forecasts and whether the ECB's stance remains "restrictive." However, President Lagarde may avoid making definitive comments about the April policy decision at this stage. Ahead of this, the flash February CPI is set to be released today, with expectations of a year-on-year decline from 2.5% to 2.3%. In the U.S., survey indicators are beginning to reflect uncertainty linked to Trump’s policies, though employment metrics remain largely unaffected for now. The impact of federal worker layoffs is expected to emerge later, so another strong BLS employment report on Friday and solid ADP numbers on Wednesday would not be surprising. Final February PMIs are due Monday and Wednesday, with particular interest in whether Wednesday’s Services ISM mirrors the recent PMI drop.
In the UK, the Bank of England’s Decision Maker Panel on Thursday could draw attention if firms’ projected price increases fall below the actual rises seen in the past year. A more prominent event, however, will be Governor Bailey’s appearance before the Treasury Select Committee on Wednesday to discuss the February Monetary Policy Report.
News related to Trump’s policies will likely remain relevant, including updates on the deferred tariffs for Canada and Mexico, which are set to take effect tomorrow. Additionally, an EU leaders' defense summit will be held in Brussels on Thursday, while China’s National People’s Congress is scheduled for Wednesday. Beijing’s response to potential tariffs, including a stimulus package and retaliatory measures, could add further volatility this week
Overnight Newswire Updates of Note
Trump: Strategic Crypto Reserve Includes BTC, Solana, XRP And More
EU To Extend Relaxed Subsidy Regime For Energy
Deutsche Bank Clashed With ECB Over Bad Loan Losses
Bank Of England May Need To Pause Rate Cuts, Ex-officials Warn
ECB Rate Cuts Enter Final Stretch With Divisions Widening
UK, France Aim For New Ukraine Peace Deal After White House Fracas
UK HMRC To Ditch Barclays As Government’s Bank In Favour Of Lloyds
Goldman, BofA Dial Back Bearish Yuan Bets Despite Tariff Threats
Xi Prepares To Unveil China Stimulus Plan As Trade War Heats Up
BoJ Could Face Pressure To Act As US Debates Reciprocal Tariffs
New Zealand Exports Outpace Imports In Positive Sign For Economy
(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: 1.0245-50 (1.9BLN), 1.0270-85 (853M), 1.0295-05 (580M)
1.0310-20 (533M), 1.0350 (604M), 1.0360-75 (917M), 1.0390-05 (1.34BLN)
1.0445-50 (448M), 1.0470-75 (1.7.BLN), 1.0480-90 (600M), 1.0530 (634M)
1.0550 (240M), 1.0565-70 (739M)
USD/JPY: 148.95-00 (525M), 150.79-80 (1.14BLN), 151.00 (385M), 152.00 (359M)
EUR/JPY: 155.50 (270M), 156.90 (240M), 158.05 (300M), 161.25 (440M)
CHF/JPY: 165.80 (210M). USD/CHF: 0.9105 (200M)
GBP/USD: 1.2490 (525M), 1.2750 (447M)
AUD/USD: 0.6140-50 (1.13BLN), 0.6180 (414M), 0.6235 (344M), 0.6310 (300M)
0.6330 (494M), 0.6350-60 (958M)
USD/CAD: 1.4300 (1.8BLN), 1.4325 (286M), 1.4350 (1.2BLN), 1.4400 (1.8BLN)
1.4425 (593M), 1.4440 (2.0BLN) , 1.4500 (591M), 1.4570-80 (1.61BLN)
USD/ZAR 18.3500 (200M)
CFTC Data As Of 28/2/25
CFTC Positions for the Reporting Week Ending February 25th
Speculators reduced their net long position in CBOT US Treasury bonds futures by 6,869 contracts, bringing it down to 40,912.
Speculators decreased their net short position in CBOT US Ultrabond Treasury futures by 18,507 contracts, now totaling 227,735.
Speculators trimmed their net short position in CBOT US 10-year Treasury futures by 9,672 contracts, resulting in a total of 699,855.
Speculators cut their net short position in CBOT US 5-year Treasury futures by 111,760 contracts, which now stands at 1,625,773.
Speculators lowered their net short position in CBOT US 2-year Treasury futures by 140,066 contracts to 1,149,453.
The euro has a net short position of -25,425 contracts.
The Japanese yen has a net long position of 95,980.
The British pound holds a net long position of 4,463.
The Swiss franc shows a net short position.
The net long position for Bitcoin is 204 contracts.
Technical & Trade Views
SP500 Pivot 6040
Daily VWAP bullish
Weekly VWAP bearish
Seasonality suggests bearishness Into March 7th
Above 6075 target 6195
Below 6045 target 5743
EURUSD Pivot 1.05
Daily VWAP bearish
Weekly VWAP bearish
Seasonality suggests bearishness into March 30th
Above 1.0535 target 1.0634
Below 1.0505 target 0.9758
GBPUSD Pivot 1.27
Daily VWAP bearish
Weekly VWAP bullish
Seasonality suggests bearishness into March 10th
Above 1.2785 target 1.29
Below 1.2670 target 1.2450
USDJPY Pivot 151
Daily VWAP bullish
Weekly VWAP bearish
Seasonality suggests bullishness into Apr 9th
Above 1.5250 target 155.50
Below 150 target 148
XAUUSD Pivot 2800
Daily VWAP bearish
Weekly VWAP bearish
Seasonality suggests volatile bullishness into Feb 22nd
Above 2800 target 2997
Below 2750 target 2650
BTCUSD Pivot 90k
Daily VWAP bullish
Weekly VWAP bearish
Seasonality suggests bullishness into Apr 9th
Above 95k target 105k
Below 90k target 85k
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Past performance is not indicative of future results.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!