HFMarkets (hfm.com): New market analysis services.

[HFM]

Date: 24th February 2025.


German Markets Surge as Friedrich Merz Set To Be Chancellor, Euro Gains on Fiscal Shift.



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* Germany’s stock index futures and the euro rallied after opposition leader Friedrich Merz secured victory.
* Investors expect a shift toward increased government spending.
* US-China trade tensions rise as Trump tightens restrictions on Chinese investments.
* AI optimism fuels Chinese tech stocks despite regulatory concerns.
* Nvidia’s earnings report on Wednesday is expected to impact market volatility.


German Markets React to Election Results


Germany’s stock market and currency experienced a sharp rally in Asian trading after conservative leader Friedrich Merz won the country’s federal election. This victory aligns with pre-election polls and signals a potential departure from Germany’s traditionally strict fiscal policies.


Futures tied to the DAX Index surged as much as 1.5% on Monday, recovering from early losses in a session marked by thin trading volume. Meanwhile, the euro strengthened against most major currencies, climbing 0.7% against the U.S. dollar.


Market analysts believe Merz’s leadership could mark the end of Germany’s tight fiscal stance, with expectations that his administration will prioritize economic stimulus. This shift comes at a critical time, as Europe’s largest economy grapples with sluggish growth, geopolitical uncertainties, and the threat of a global trade war under U.S. President Donald Trump.


"Political stability and increased fiscal spending are key market drivers following the election," said Wolf von Rotberg, equity strategist at Bank J. Safra Sarasin.
The euro’s strength also reflects optimism that Merz will form a government quickly, which wasn’t a widely held expectation before the election.


"If Merz successfully builds a stable coalition, EURUSD could move toward 1.06," noted David Forrester, senior foreign-exchange strategist at Credit Agricole CIB Singapore.





US-China Trade Tensions Intensify


While European markets gained, US-China trade tensions escalated as Trump ordered stricter regulations on Chinese investments in key sectors, including technology, energy, and infrastructure. The move is part of a broader strategy to limit China’s influence in strategic industries. Although not legally binding, the directive strengthens oversight by the Committee on Foreign Investment in the United States (CFIUS), a panel responsible for reviewing foreign acquisitions. JPMorgan strategists warned that this decision could reverse gains in Chinese tech stocks, which had rallied earlier in the year.


Despite geopolitical headwinds, Chinese technology stocks have posted strong gains this year, largely driven by optimism in artificial intelligence (AI) and key policy shifts. The market remains under-owned by global investors, suggesting potential for further capital inflows. The growing AI industry has helped offset risks from US tariffs, with investor sentiment remaining bullish on leading Chinese firms like Alibaba and Tencent.


Chinese officials reacted strongly, with Vice Premier He Lifeng raising concerns about Trump’s recent 10% tariff hike on Chinese goods in a call with US Treasury Secretary Scott Bessent. Additionally, sources revealed that Trump’s administration urged Mexico to impose tariffs on Chinese imports as part of broader trade negotiations.


Despite these challenges, investor focus remains on Nvidia’s earnings report on Wednesday, a key event that could drive market volatility.


Gold Nears Record Highs on Inflation and Central Bank Demand


Gold prices held near $2,940 an ounce, just shy of last week’s record, as ETF inflows surged and the US dollar weakened. The precious metal is on its longest winning streak since 2020, fueled by rising inflation expectations and mounting geopolitical uncertainties under Trump’s administration.


Goldman Sachs raised its year-end target to $3,100, citing strong central-bank demand and increased ETF holdings.
Lower US Treasury yields have also boosted bullion’s appeal, with traders now expecting the Federal Reserve’s first rate cut in July rather than September. Markets will closely watch Friday’s inflation data, a key indicator for Fed policy direction.


Final Thoughts


Markets are reacting to a mix of political and economic shifts, with Germany’s election outcome boosting European equities while US-China trade tensions create uncertainty for Asian markets. Investors will be closely monitoring fiscal policy changes in Germany, Nvidia’s earnings, and further trade developments for insights into market direction.


For more financial market insights and updates, stay tuned.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work.


Andria Pichidi
HFMarkets


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 17th March 2025.


A Key Week For Central Bank: Bank Of Japan and JPY In Focus!



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The market finds itself in a week full of central bank decisions which is likely to create plenty of volatility. This includes the Federal Reserve, Bank of Japan, Bank of England and the Swiss National Bank. Analysts expect all central banks to keep their interest rates unchanged except for the Swiss National Bank. Of the related currencies the best performing in 2025 so far remains the Japanese Yen.


CHFJPY - Can This Week’s Events Shift Momentum Back in Favor of the JPY?


The Japanese Yen has been the best performing currency of 2025 due to higher inflation, national salary increases and historic interest rate hikes. However, the currency has come under pressure from economic data weaker than previous expectations. On Monday 17th, the JPY continued to struggle. Nonetheless, most economists believe the trend remains intact and the price of the JPY remains higher than the average price of 2025 so far.





A Reuters poll of top economists suggests core inflation may ease as government energy subsidies resume. However, the overall upward trend is expected to persist, allowing the Bank of Japan to maintain its tightening stance. Preliminary estimates indicate the core consumer price index will rise by 2.9%, down from 3.2%. Even with an inflation rate of 2.9%, the central bank will have the space to manoeuvre.


The Japanese Yen's bullish trend has paused for now. However, buyers are awaiting comments from the Bank of Japan Governor that could reignite momentum. Japanese government bond yields show mixed signals as the Bank of Japan gears up for its next key monetary policy decision amid global uncertainties. If the BoJ continues to signal further rate hikes for the upcoming months, the JPY is likely to rise further.


Swiss National Bank


This morning the Swiss Franc is witnessing neither positive nor negative price movement. Most economists believe the Swiss National Bank will take another decision to cut interest rates even though there is little room left for maneuver. Most economists believe the SNB will cut 0.25% with few individuals opting for a 50 basis point cut to 0.00%.


Switzerland aims to cut rates further due to low inflation, which is nearly 0.00%. According to economists, if prices do not pick up, the country may be at risk of deflation. In addition to this, Switzerland’s Gross Domestic Product growth rate has fallen to 0.2%, the lowest since 2023. If the SNB cuts more than 0.25% or indicates that the policy rate will fall to 0.00%, the CHFJPY potentially can continue to fall.


For the CHFJPY, the two central bank decisions will be the key price drivers as neither economy is due to release any major economic data. Trump and President Putin's scheduled phone call tomorrow could drive market volatility, particularly impacting the safe-haven Swiss Franc and Japanese Yen.


Key Takeaway Points:


* Key rate decisions from the Fed, BoJ, BoE, and SNB are expected, with analysts predicting no changes except for a likely rate cut from the Swiss National Bank.
* The Japanese Yen has led currency performance in 2025 but is facing pressure from weaker economic data. However, analysts expect the trend to remain intact.
* The SNB is expected to cut rates by 0.25% due to low inflation and slow GDP growth, which could weaken the CHF further.
* The BoJ’s rate outlook and a scheduled Trump-Putin phone call could increase volatility, especially for safe-haven currencies.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!


Click HERE to READ more Market news.


Michalis Efthymiou
HFMarkets


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 3rd April 2025.


Gold Prices Pull Back After Record High as Traders Eye Trump’s Tariffs.



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Key Takeaways:


* Gold prices retreated after hitting a record high of $3,167.57 per ounce due to profit-taking.
* President Trump announced a 10% baseline tariff on all US imports, escalating trade tensions.
* Gold remains exempt from reciprocal tariffs, reinforcing its safe-haven appeal.
* Investors await US non-farm payroll data for further market direction.
* Fed rate cut bets and weaker US Treasury yields underpin gold’s bullish outlook.


Gold Prices Retreat from Record Highs Amid Profit-Taking


Gold prices saw a pullback on Thursday as traders opted to take profits following a historic surge. Spot gold declined 0.4% to $3,122.10 per ounce as of 0710 GMT, retreating from its fresh all-time high of $3,167.57. Meanwhile, US gold futures slipped 0.7% to $3,145.00 per ounce, reflecting broader market uncertainty over economic and geopolitical developments.


The recent rally was largely fueled by concerns over escalating trade tensions after President Donald Trump unveiled sweeping new import tariffs. The 10% baseline tariff on all goods entering the US further deepened the global trade conflict, intensifying investor demand for safe-haven assets like gold. However, as traders locked in gains from the surge, prices saw a modest retracement.


Trump’s Tariffs and Their Market Implications


On Wednesday, Trump introduced a sweeping tariff policy imposing a 10% baseline duty on all imports, with significantly higher tariffs on select nations. While this move was aimed at bolstering domestic manufacturing, it sent shockwaves across global markets, fueling inflation concerns and heightening trade war fears.


Gold’s Role Amid Trade War Escalations


Despite the widespread tariff measures, the White House clarified that reciprocal tariffs do not apply to gold, energy, and ‘certain minerals that are not available in the US’. This exemption suggests that central banks and institutional investors may continue favouring gold as a hedge against economic instability. One of the key factors supporting gold is the slowdown that these tariffs could cause in the US economy, which raises the likelihood of future Federal Reserve rate cuts. Gold is currently in a pure momentum trade. Market participants are on the sidelines and until we see a significant shakeout, this momentum could persist.


Impact on the US Dollar and Bond Yields


Gold prices typically move inversely to the US dollar, and the latest developments have pushed the dollar to its weakest level since October 2024. Market participants are increasingly pricing in the possibility of a Fed rate cut, as the tariffs could weigh on economic growth.


Additionally, US Treasury yields have plummeted, reflecting growing recession fears. Lower bond yields reduce the opportunity cost of holding non-yielding assets like gold, making it a more attractive investment.





Technical Analysis: Key Levels to Watch


Gold’s recent rally has pushed it into overbought territory, with the Relative Strength Index (RSI) above 70. This indicates a potential short-term pullback before the uptrend resumes. The immediate support level lies at $3,115, aligning with the Asian session low. A further decline could bring gold towards the $3,100 psychological level, which has previously acted as a strong support zone. Below this, the $3,076–$3,057 region represents a critical weekly support range where buyers may re-enter the market. In the event of a more significant correction, $3,000 stands as a major psychological floor.


On the upside, gold faces immediate resistance at $3,149. A break above this level could signal renewed bullish momentum, potentially leading to a retest of the record high at $3,167. If bullish momentum persists, the next target is the $3,200 psychological barrier, which could pave the way for further gains. Despite the recent pullback, the broader trend remains bullish, with dips likely to be viewed as buying opportunities.


Looking Ahead: Non-Farm Payrolls and Fed Policy


Traders are closely monitoring Friday’s US non-farm payrolls (NFP) report, which could provide critical insights into the Federal Reserve’s next policy moves. A weaker-than-expected jobs report may strengthen expectations for an interest rate cut, further boosting gold prices.


Other key economic data releases, such as jobless claims and the ISM Services PMI, may also impact market sentiment in the short term. However, with rising geopolitical uncertainties, trade tensions, and a weakening US dollar, gold’s safe-haven appeal remains strong.


Conclusion: While short-term profit-taking may trigger minor corrections, gold’s long-term outlook remains bullish. As global trade tensions mount and the Federal Reserve leans toward a more accommodative stance, gold could see further gains in the months ahead.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!


Click HERE to READ more Market news.


Andria Pichidi
HFMarkets


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.