The Federal Reserve faces trade conflict and stagflation risks. Analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on March 7

Global Market Review

1. European and American market trends

The three major stock index futures rose, with Dow futures mainly blue-chip stocks rising by 0.14%; S&P 500 futures rose by 0.30%; and Nasdaq 100 futures mainly technology stocks rose by 0.45%. European stock markets fell, with the German DAX index falling -1.59%; the French CAC40 index falling 0.98%; and the UK FTSE 100 index falling 0.54%.

2. Market news interpretation

The Federal Reserve faces trade conflicts and stagflation risks, and Powell will deliver a key speech

① Federal Reserve Chairman Powell will speak at the Monetary Policy Forum in New York on Friday to discuss global economic uncertainty, trade policy and stagflation risks.

②Powell's speech avatradescn.comes ahead of the silent period of the Federal Reserve's March 18-19 policy meeting, and he will evaluate the impact of the Trump administration's trade policy on the economy, as well as the potential impact of federal spending cuts and immigration policies.

③ Although policy changes have not yet appeared in economic data, trade conflicts and immigration policies have triggered concerns about "stagflation", and the Federal Reserve may face a difficult choice between fighting inflation and supporting economic growth.

④Powell previously believed that the impact of tariffs on prices was short-lived, but Trump's tariff policies on Canada, Mexico and China and its retaliation measures may make this position difficult to maintain.

⑤Powell's speech will focus on the impact of recent policy changes on inflation expectations, and the market expects that the economic slowdown will offset thePrice pressure brought by taxes has prompted the Federal Reserve to cut interest rates three times this year.

⑥ However, if inflation expectations start to rise, the Fed may need to take more radical measures to control inflation, which will limit its balance between employment and inflation.

Nasdaq plans to offer 24-hour trading on its stock exchange

As the second largest exchange operator in the United States, Nasdaq plans to offer extended trading five days a week with regulatory approval and industry coordination, and is expected to launch in the second half of 2avatradescn.com. Cboe Global Markets announced last month that it would extend trading hours on its stock exchange to 24 hours five days a week, pending regulatory approval. The New York Stock Exchange submitted its own application in October, planning to offer 22-hour trading on weekdays.

OPEC+ output adjustment expectations drove oil prices up

① On March 7, Brent crude oil futures rose $1.18, or 1.70%, to $70.64 per barrel; US West Texas Intermediate crude oil futures rose $1.11, or 1.67%, to $67.47 per barrel.

②Russian Vice Prime Minister Novak said that OPEC+ will increase production as planned in April, but may adjust production according to market conditions later. He emphasized that if the market is unbalanced, OPEC+ can operate in reverse at any time.

③Brent crude oil fell 3.6% this week, the largest weekly decline since November 2021; WTI crude oil fell 3.4%, the largest weekly decline since January 2022.

④ Analysts pointed out that OPEC+'s cautious attitude towards market conditions demonstrates the flexibility of its production adjustment plan. The market has doubts about whether OPEC+ can successfully absorb new production, and factors such as tariffs will also have an important impact on oil prices.

The forecast of US retail traders for non-farm data tonight

① On Friday (March 7), 18:58 Beijing time, the US February non-farm employment data (NFP) will be released in a few hours (expected to be 21:30 Beijing time). The expectations and views of this data by American retail traders are diversified. The following is a review of the current views of American retail traders, reflecting market sentiment and analysis priorities.

②Some American retail traders are cautious about the February NFP data. Citing the view of "well-known institutions", it is expected that non-farm data in February may perform weakly, and even the possibility of negative growth cannot be ruled out, mainly due to the shrinking recruitment activities of local and state governments. The user mentioned that the end of the epidemic relief funds avatradescn.combined with the freezing of federal financial aid has led to increased financial pressure on local governments, which in turn affects employment data. This view believes that if the data is significantly lower than expected, it may trigger market concerns about the recession.

③ Another group of users pay more attention to the specific predictions of data and their potential impact on the market. Economists generally estimate that 153,000 new jobs were added in February, slightly higher than 143,000 in January, and the unemployment rate is expected to remain at 4%. ADP employment data on Wednesday and the number of initial jobless claims on Thursday will provide forward-looking signals ahead of the NFP release. This NFP may be the key to determining the direction of US interest rates, implying that the market is extremely sensitive to data.

④In addition, there are users who analyze from the perspective of trading strategies and market sentiment. We value unemployment and NFP data more than small non-agricultural (ADP). If NFP is slightly lower than expected, it may be the best scenario for bulls; if it is significantly lower than expected, it may trigger recession association; if the data is too strong, it will weaken the expectation of interest rate cuts. The recent market rise may be paving the way for the "selling facts" after the data is released, reflecting traders' advance preparations for volatility.

Greece's economic growth accelerated in the fourth quarter, and investment and exports became the main driving force

①Greece's economy grew by 0.9% month-on-month in the fourth quarter of 2024, significantly accelerating from the 0.4% revised growth rate in the third quarter, mainly due to the increase in investment and exports. ② Data from the Greek Statistics Office (ELSTAT) shows that Greece's economy grew by 2.3% year-on-year in 2024. ③Greece has faced the risk of bankruptcy in the past decade and experienced the debt crisis from 2009 to 2018, and is currently recovering steadily. ④Athens predicts that Greece's economic growth rate will reach 2.3% in 2025, which is expected to exceed the euro area average.

The euro is expected to usher in the best weekly performance in 16 years, with the dollar weakening ahead of non-farm data

① This week the euro is expected to hit its biggest single-week gain since March 2009, as Germany's fiscal reform triggered market optimistic expectations for European economic recovery. ② The US dollar index fell to a four-month low, and market concerns about uncertainty about US economic growth and trade policies have intensified. ③ The market fluctuated sharply this week, with U.S. economic data uneven, while the ECB's interest rate hike expectations and Germany's fiscal stimulus plan pushed the euro to strengthen. ④ Although the US non-farm employment data in February is about to be released, and the market expects to create 160,000 new jobs, analysts believe that even if the data is strong, it will be difficult to change the upward trend of the euro. ⑤ The US dollar "falls out of favor" amid trade policy uncertainty, while safe-haven currencies such as the Japanese yen and the Swiss franc performed strongly.

The risk of refinancing of euro high-yield bonds remains low

① Barclays analysts pointed out in their research report that despite the rising yields of sovereign bonds in euro zone, the risk of refinancing of euro junk bonds is still relatively low. ② This week, German Treasury bond yields and euro zone sovereign bond yields rose sharply due to Germany's fiscal expansion plan, but euro junk bond yields rose only moderately by 7 basis points, closing at 5.5% on Wednesday. ③ avatradescn.compared with the beginning of the year, the euro junk bond yield is still about 15 basis points lower, and about 50 basis points lower than the 2024 average. ④Barclays believes that the euroJunk bond yields are unlikely to rise significantly, so their refinancing risks are still at a low level.

Ukraine's natural gas imports remained low

① Ukraine's natural gas imports from Europe remained at a low level on Friday. ② Ukrainian national gas avatradescn.company Naftogaz said that the Russian attack severely damaged its natural gas production facilities. ③ Data shows that Ukraine's natural gas imports increased by nearly ten times avatradescn.compared with usual conditions, but imports in March decreased due to rising temperatures. ④ The planned import of 14.25 million cubic meters of natural gas on Friday, a slight increase from 14.1 million cubic meters on Thursday, far lower than the 26 million cubic meters record set in mid-February. ⑤ Natural gas mainly avatradescn.comes from Slovakia, Hungary and Poland, with a total import volume of 512 million cubic meters in February, the highest monthly import volume since September 2023. ⑥ Industry sources said Ukraine may import up to 800 million cubic meters of natural gas from Europe in February and March to make up for the lost output due to the attack.

3. Trends of major currency pairs in the New York Stock Exchange before the New York Stock Exchange

Euro/USD: As of 21:22 Beijing time, the euro/USD rose, now at 1.0858, an increase of 0.68%. Before New York, the euro-dollar price trading is clearly sure to break above the $1.0830 level and try to stay above that level, strengthening expectations for a bullish trend for the rest of today and paving the way for us to move towards the next positive goal of reaching $1.0975.

GBP/USD: As of 21:22 Beijing time, GBP/USD has risen, now at 1.2917, an increase of 0.27%. Before New York, GBPUSD prices resumed active trading and began trying to break through the $1.2925 level, supporting expectations of continuing bullish trends in the upcoming trading, waiting for confirmation of a breakthrough to open the way for a rebound to our next target, starting at $1.3000 and then $1.3120.

Spot gold: As of 21:22 Beijing time, spot gold rose, now at 2913.16, an increase of 0.08%. Before New York, gold prices are testing the $2920.00 resistance line, which is the next trend key besides the $2900.00 support line, suggesting an attempt to activate a positive scenario, but we remain neutral until the price confirms to exceed one of these levels and then explicitly detect its next target.

Spot silver: As of 21:22 Beijing time, spot silver fell, and it is now reported32.330, a drop of 0.87%. Before the New York market, silver prices have not shown any strong movement since the morning and continue to fluctuate around $32.60, so the expected bullish trend today has not changed depending on the stability of the price above $32.25, reminding you that our target starts at $32.86 and extends to $33.35 after breaking through the previous level.

Crude oil market: As of 21:22 Beijing time, U.S. oil rose, now at 67.090, an increase of 1.12%. Before the New York market, crude oil prices traded with obvious enthusiasm to attack the $67.05 level and attempted to break through to suggest recovery in the upcoming trading and to build an intraday bull market with the goal of resistance lines for bear market channels that appear on the chart.

4. Institutional view

OCBC Bank: The central bank of the Philippines may cut interest rates again this year

Occurrency economists said in a report that the central bank of the Philippines may cut interest rates in April. This expectation is driven by recent data, including lower-than-expected fourth-quarter GDP growth and low inflation in February. While inflationary pressures are likely to rise from February lows, they are expected to remain controllable in the avatradescn.coming months. They said the Philippines central bank has hinted to be open to a cumulative 50 basis points cut this year. They also said: "In view of the increasing turbulence of the external environment, we will continue to assess the risks of further rate cuts from the central bank of the Philippines." OCBC expects the central bank of the Philippines to cut interest rates by 25 basis points in April and keep interest rates unchanged for the rest of the year.

Institutions: Malaysia's banking industry may grow moderately this year

RAMRatings said in a report that Malaysia's banking industry's profits may grow moderately in 2025, supported by steady growth in loans and maintaining a benign level of provision costs. The institution said banks manage financing costs while policy rates remain unchanged, so net interest margins may remain stable. The institution expects the loan growth rate to reach 5.5%, the same as the growth rate in 2024. The agency also said that Malaysia's GDP is expected to grow by 4.0%-5.0% (up 5.1% last year), and the risks posed by upcoming subsidy reforms and global uncertainty may curb market sentiment. RAMRatings expects bank asset quality to remain strong and the non-performing loan ratio will be at an all-time low.

The above content is about "[Ihua Foreign Exchange Market Review]: The Federal Reserve faces trade conflicts and stagflation risks. Analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on March 7" is made by Ihua AvatraThe editor of deForex carefully avatradescn.compiled and edited it, hoping it will be helpful to your transactions! Thanks for the support!

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