EXECUTIVE SUMMARY
- JAPAN’S BIGGEST UNION GROUP DEMANDS HIGHEST WAGE HIKE SINCE 1993
- EUROPE RACES TO CRAFT A TRUMP-ERA PLAN FOR UKRAINE AND DEFENSE
- REPUBLICANS WARN MUSK DOGE CUTS AT RISK WITHOUT CONGRESS
- PBOC TO CUT RRR, RATES WHEN NEEDED - GOVERNOR PAN
Figure 1: EUR/SEK reaches lowest since 2022 following another strong Sweden CPI print
Source: MNI/Bloomberg
NEWS
US (BBG): Republicans Warn Musk DOGE Cuts at Risk Without Congress
The differences between Elon Musk’s fast-acting efforts to reshape the federal government and congressional Republicans’ desire for process and professional courtesies played out behind closed doors in the US Capitol, the latest sign of brewing tension among factions of President Donald Trump’s allies. In a series of meetings Wednesday with Musk, House and Senate Republicans sought to impress upon the billionaire that Congress has a central role in enacting controversial spending cuts that don’t run the risk of being overturned in court.
US/MIDEAST (WSJ): Trump Warns Hamas to Release All Hostages or Terrorist Group Is ‘Dead’
President Trump warned Hamas to free the remaining hostages in Gaza after the White House confirmed it had held face-to-face talks with the militant group on a deal to secure their release. “Release all of the Hostages now, not later, and immediately return all of the dead bodies of the people you murdered, or it is OVER for you,” Trump posted Wednesday on social media. If the group continued to hold hostages, “you are DEAD!”
EUROPE (NYT): Europe Races to Craft a Trump-Era Plan for Ukraine and Defense
European leaders are gathering in Brussels Thursday to discuss how to support Ukraine and fend more for themselves on defense. European leaders find themselves plunged into a hostile new era of less cooperation from the United States, a greater threat from Russia, and an increasingly uncertain outlook for Ukraine. On Thursday, they will gather in Brussels to try to figure out what to do about that. They will need to walk a fine line: Figuring out how to support Ukraine and bolster their own defenses while avoiding further alienating their tempestuous allies in Washington.
RUSSIA (MNI): Lavrov - 'No Space for Compromise' on Peacekeepers in Ukraine Plan
Reuters reporting comments from Russian Foreign Minister Sergey Lavrov. The minister claims that Russia sees no "space for compromise" on the prospect of peacekeepers being sent to Ukraine under any ceasefire/peace deal. Says, "We would consider the deployment of such forces as a NATO presence in Ukraine" and "We are categorically against such actions, they will mean the official involvement of NATO forces in the war against Russia...We cannot allow this to happen."
GERMANY (MNI): Bundestag to Start Debt Brake Reform Talks 13 Mar, Vote on 18 Mar
Reuters reports the Bundestag will begin discussions on the proposed reform to the debt brake to allow for greater defence spending on Thursday, 13 March, with the eventual vote taking place on Tuesday, 18 March. The discussions will take place in the 'old' pre-election Bundestag, where the conservative Christian Democratic Union/Christian Social Union (CDU/CSU), centre-left Social Democrats (SPD) and environmentalist Greens hold a two-thirds majority and, therefore, can enact constitutional reforms without outside support.
FRANCE (BBG): France to Open Talks to Extend Nuclear Shield for Europe
President Emmanuel Macron said he’ll enter into talks to use France’s nuclear capabilities to defend European allies, in the latest push by a European country to establish strategic security as the US reduces its footprint on the continent. “Our nuclear deterrent protects us,” Macron said in a televised address Wednesday. “I have decided to open the strategic debate on the protection, through our deterrent, of our allies on the European continent.”
JAPAN (BBG): Japan’s Biggest Union Group Demands Highest Wage Hike Since 1993
Japanese workers demanded the largest wage hike since 1993 in ongoing pay negotiations, signaling the kind of sustainable wage growth that could help drive economic progress that both the central bank and the government are seeking. The Japanese Trade Union Confederation, known as Rengo, said Thursday its member unions demanded an average wage increase of 6.09% this year, up from last year’s 5.85%, and seeking more than 6% for the first time in more than three decades. Unions representing workers from smaller companies demanded a 6.57% raise, jumping from 5.97% last year. Rengo represents roughly 6.8 million workers employed across the nation’s industries.
CHINA (MNI): PBOC to Cut RRR, Rates When Needed - Governor Pan
MNI (Beijing) The People’s Bank of China will lower the reserve requirement ratio (RRR) and interest rates at an appropriate time, said PBOC Governor Pan Gongsheng told a press conference during the National People's Congress on Thursday. Pan noted there is still downward space for RRR which sits at an average level of 6.6%, noting any cut would depend onthe domestic and international economic situation and financial market conditions. The PBOC will also work on institutional arrangements to support the capital markets, alongside the China Securities Regulatory Commission, while resolutely guarding against the overshooting risk of the yuan exchange rate.
CHINA (MNI): China Has Policy Room if Needed - Finance Minister
MNI (Beijing) Beijing has reserved sufficient policy space and reserve tools to deal with possible internal and external uncertainties, said Finance Minister Lan Fo’an told a press conference during the National People's Congress on Thursday. China has the foundation and support to achieve its annual growth target of around 5% this year, said Zheng Shanjie, director of the National Development and Reform Commission told the same gathering.
CHINA (BBG): China Mulls Ending Price Cap on Unsold Home Purchases
China is considering scrapping a price cap for local governments buying unsold apartments, according to people familiar with the matter, as Beijing seeks to speed up the clearance of millions of empty homes and stem the property downturn. Under the proposal, local authorities across the country will no longer be subject to a price ceiling equivalent to the cost of affordable homes in the same neighborhood, the people said, asking not to be identified discussing a private matter.
MNI CBRT PREVIEW - MARCH 2025: Keeping Pace for Now
The CBRT is widely expected to deliver another 250bp reduction to the one-week repo rate following identical moves in December and January. While the January inflation data surprised to the upside, the February CPI print came in below expectations, offsetting the surprise from the earlier figures and clearing the way for another 250bp cut. Almost all of the analyst views we have surveyed in this document expect a 250bp cut to the repo rate, taking it to 42.50%.
DATA
UK DATA (MNI): BOE DMP Highlights: Doesn't Favour Increasing the Pace of Cuts
Expected wage growth picked up to 4.0% on the single month measure for the first time since October (remained at 3.9% in the 3-months to Feb). Expected price growth over the next 12 months also picked up and is now back at 4.0% on a 3-month basis for the first time since April. Expected employment growth also picked up to 0.1% in the 3-mohs to Feb (from 0.0% in the 3-months to Jan). Realised wage growth (5.2%) and price growth (3.7%) both ticked down a tenth and realised employment growth up a tenth (0.5%).
SWEDEN DATA (MNI): Fresh SEK Strength Following Another Strong Inflation Report
- SWEDEN FLASH FEB CPIF +2.9% Y/Y
Fresh downside in SEK crosses following the stronger-than-expected February flash CPIF and CPIF ex-energy readings. Moves were initially quite modest, until SEK crosses took a delayed leg lower. EURSEK and NOKSEK are each down 0.55%, the latter through yesterday's low at 0.9288, eyeing 0.9274 (November 20202 low) next. CPIF ex-energy was 3.0% Y/Y (vs 2.7% cons, 2.4% Riksbank December MPR), while headline CPIF accelerated to 2.9% Y/Y (vs 2.7% cons, 2.4% Riksbank). No details are provided in the flash release, but this report will be yet another hawkish input into the Riksbank's March MPR rate path.
SWEDEN DATA (MNI): Largest Net International Investment Position of All Time
The Swedish current account surplus rose to SEK111.9bln in Q4, up from SEK92.3bln in Q3 . On a 4Q rolling basis, the current account surplus was 7.4% of nominal GDP (vs 7.5% in Q3). The constituent components of the current account were largely stable. The goods surplus ticked down to 6.1% GDP (vs 6.2% in Q3), while the services deficit also fell slightly to 1.3% GDP (vs 1.5% in Q3).
SWITZERLAND DATA (MNI): Labour Market Remains on Solid Footing Ahead of SNB
- SWISS FEB UNEMPLOYMENT RATE +2.7%
- SWISS FEB UNEMPLOYMENT -0.2% M/M, +21.1% Y/Y
The Swiss labour market continued its trajectory on a solid basis in February, with the seasonally-adjusted unemployment rate, as expected, remaining at 2.7%, amid the number of unemployed ticking up only slightly. On the demand side, vacancies extended their jump seen in January, resulting in the vacancy/unemployment ratio (V/U ratio) increasing back to levels last seen in mid-2024 (after which it drifted upwards). This means that the labour market should likely not be of major concern for the upcoming SNB meeting on March 20.
AUSTRALIA DATA (MNI): Dwelling Approvals Clearly Recovering & Stand 10% Above Q4 2019
- AUSTRALIA JAN BUILDING APPROVALS +6.3% M/M, +21.7% Y/Y
Australia's January building approvals rose 6.3% m/m after 1.7% the previous month. The strong rise was driven by both private houses and multi-unit dwellings, which recorded their second consecutive double digit monthly increase. With the total number of approvals up 21.7% y/y in January, there now appears to be progress on boosting the housing supply, which has lagged demand. Private house approvals rose 1.1% m/m in January after three straight monthly falls. They are now up 8.9% y/y after 1.0% y/y in December and 6.8% above the Q4 2019 average. Queensland, SA and WA drove the increase, while approvals fell in NSW and Victoria.
FOREX: SEK Surge Puts Price at Multiyear High, Pinching Riksbank Pricing
- Meanwhile, the SEK continues a streak of outperformance as a solid set of data outturns drives the currency higher still. Prelim inflation data covering February came in well ahead of expectations, further pinching Riksbank pricing across 2025. As a result, EUR/SEK has broken lower, consolidating comfortably through the 11.00 handle to print the lowest levels since late 2022.
- JPY is second only to the SEK so far Thursday, rallying on the back of the Rengo pay demand overnight. Rengo are one of the largest contributors to the Shunto bargaining round, suggesting the economy is on track for another multi-decade high pace of pay rises.
- USD/JPY has already shown through the Tuesday low, Y148.10. A clean break below here puts prices at new YTD lows and the lowest level since October. Y146.95, a Fibonacci retracement, is the next key support. In the crosses, this means EUR/JPY has reversed hard off the 100-dma resistance (Y161.41), which may put an end to the rally off last week's lows. A close below Y159.75 would confirm as such.
- GBP is nominally the poorest performer, but weakness is somewhat contained. GBP/USD remains just below the $1.2900 handle, having struck another overnight of 1.2924 during Asia-Pac trade.
- The ECB decision takes focus going forward, with consensus unanimous around a 25bps rate cut for the benchmark rate. Weekly jobless claims data provides the last look at the US labour market ahead of tomorrow's payrolls print.
EGBS: Equity Pullback Helps Bunds Stabilise; Fiscal Announcement Still Weighing
The pullback in European equities has allowed major EGB futures to stabilise somewhat, but the fallout from Tuesday’s German fiscal announcement continues to weigh on the space.
- Bund futures are -71 ticks at 127.47, almost 400 ticks off Tuesday’s settlement levels. The intraday low at 127.14 provides initial support, clearance of which would expose 126.84 next, a Fibonacci projection.
- The souring of risk sentiment sees the short-end outperform, with the German curve twist steepening (Schatz yields are down 2bps, while 10-year Bund yields are up 6bps).
- Spanish and French conventional auctions saw decent results, which may have been somewhat relieving for markets given current volatility and the relatively small order books at yesterday’s German syndication.
- Most EGB spreads widen following an FT report suggesting that “in today’s summit EU leaders will agree to “substantially increase defence expenditure” and demand “the commission to propose additional funding sources for defence at EU level”.
- Eurozone January retail sales were weaker-than-expected at -0.3% M/M (vs 0.1% cons), though December’s reading was revised up to 0.0% from -0.2% initial.
- Regional focus turns to this afternoon’s ECB decision. While a 25bp cut is fully expected, recent fixed income market volatility will almost certainly addressed in President Lagarde’s press conference.
GILTS: Continue to Recover From Lows
Gilts trade further away from early session lows as global equity index futures continue to move away from early London highs.
- Futures traded as low as 90.71 before bouncing to ~91.50.
- The technical trend in the contract has turned bearish, with any fresh extension lower set to target Fibonacci support at 90.49.
- Bulls need to retake yesterday’s low (91.56) to start turning the tide back in their favour.
- Yields last 1bp lower to 3bp higher on the day, 6-10bp off session highs. 10s still lead the sell off.
- Curve twist steepens.
- Spread tightening to Bunds continues to extend, with the 10-Year spread ~4bp narrower on the day, as the push for looser German fiscal policy reshapes cross-market ranges.
- GBP STIRs follow long end cues.
- BoE-dated OIS shows 51.5bp of cuts through year-end vs. 44bp early today.
- SONIA futures last +2.5 to -1.0.
- The findings of the latest BoE DMP survey didn’t seem to favour a swifter pace of BoE easing, but cross-market/macro moves have outweighed that release.
- Comments from BoE hawk-turned-dove Mann are due this afternoon (15:00 GMT), although expect macro and cross-market cues to continue to dominate.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.457 | +0.2 |
May-25 | 4.268 | -18.7 |
Jun-25 | 4.212 | -24.3 |
Aug-25 | 4.079 | -37.6 |
Sep-25 | 4.041 | -41.4 |
Nov-25 | 3.959 | -49.6 |
Dec-25 | 3.940 | -51.5 |
EQUITIES: Eurostoxx 50 Futures Trading Close to Recent Highs
The trend in the Eurostoxx 50 futures contract remains bullish with price trading closer to the trend highs. Key short-term support has been defined at 5373.00, the Mar 4 low. A reversal lower and a break of this level would signal scope for a deeper retracement and expose the 50-day EMA at 5290.26. For bulls, a continuation higher would open the 5600.00 handle next. A sharp sell-off in the S&P E-Minis contract this week reinforces a short-term bear threat. The contract traded to a fresh short-term cycle low on Tuesday - price has breached support at 5809.00, the Jan 13 low. This highlights a stronger reversal and a double top pattern on the daily scale. A resumption of weakness would open 5698.25, a Fibonacci retracement. Initial firm resistance to watch is 6019.64, the 50-day EMA.
- Japan's NIKKEI closed higher by 286.69 pts or +0.77% at 37704.93 and the TOPIX ended 33.2 pts higher or +1.22% at 2751.41.
- Elsewhere, in China the SHANGHAI closed higher by 39.133 pts or +1.17% at 3381.098 and the HANG SENG ended 775.5 pts higher or +3.29% at 24369.71.
- Across Europe, Germany's DAX trades higher by 111.79 pts or +0.48% at 23196.61, FTSE 100 lower by 71.44 pts or -0.82% at 8685.27, CAC 40 down 13.57 pts or -0.17% at 8164.86 and Euro Stoxx 50 down 0.64 pts or -0.01% at 5491.67.
- Dow Jones mini down 331 pts or -0.77% at 42742, S&P 500 mini down 56.5 pts or -0.97% at 5795.75, NASDAQ mini down 254 pts or -1.23% at 20414.75.
Time: 09:50 GMT
COMMODITIES: Bearish Trend Condition in WTI Futures Remains Intact
The current bearish trend condition in WTI futures remains intact and this week’s fresh short-term cycle lows reinforces current conditions. Recent weakness has resulted in a clear breach of support at $70.20, the Feb 6 low. This confirmed a resumption of the downtrend that started Jan 15 and has paved the way for an extension towards $63.61 next, the Oct 10 ‘24 low. Key short-term pivot resistance is seen at $70.86, the 50-day EMA. The trend condition in Gold remains bullish and the recent pullback appears to have been a correction. A stronger rally would refocus attention on the next objective at $2962.2, a Fibonacci projection. This would also open the $3000.0 handle. On the downside, a resumption of weakness would instead suggest scope for a deeper correction and expose support around the 50-day EMA, at $2816.6. The 50-day average marks a key support.
- WTI Crude up $0.42 or +0.63% at $66.73
- Natural Gas down $0.07 or -1.62% at $4.377
- Gold spot down $22.13 or -0.76% at $2897.4
- Copper down $5.4 or -1.13% at $474
- Silver down $0.28 or -0.85% at $32.3715
- Platinum down $2.7 or -0.28% at $966.4
Time: 09:50 GMT
| Date | GMT/Local | Impact | Country | Event |
| 06/03/2025 | 1100/0600 | *** |  TR | Turkey Benchmark Rate |
| 06/03/2025 | 1315/1415 | *** |  EU | ECB Deposit Rate |
| 06/03/2025 | 1315/1415 | *** | EU | ECB Main Refi Rate |
| 06/03/2025 | 1315/1415 | *** | EU | ECB Marginal Lending Rate |
| 06/03/2025 | 1330/0830 | *** |  US | Jobless Claims |
| 06/03/2025 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 06/03/2025 | 1330/0830 | ** |  CA | International Merchandise Trade (Trade Balance) |
| 06/03/2025 | 1330/0830 | ** | CA | International Merchandise Trade (Trade Balance) |
| 06/03/2025 | 1330/0830 | ** | US | Trade Balance |
| 06/03/2025 | 1330/0830 | ** | US | Non-Farm Productivity (f) |
| 06/03/2025 | 1345/1445 | EU | ECB Press conference post Governing council meeting | |
| 06/03/2025 | 1345/0845 | US | Philly Fed's Pat Harker | |
| 06/03/2025 | 1445/1545 | EU | Publication of ECB Staff macroeconomic projections | |
| 06/03/2025 | 1500/1000 | * | CA | Ivey PMI |
| 06/03/2025 | 1500/1000 | ** | US | Wholesale Trade |
| 06/03/2025 | 1515/1615 | EU | ECB Podcast: Lagarde presents latest MonPol decision | |
| 06/03/2025 | 1515/1615 | EU | Lagarde video message at Women's Forum event | |
| 06/03/2025 | 1530/1030 | ** | US | Natural Gas Stocks |
| 06/03/2025 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 06/03/2025 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 06/03/2025 | 1700/1200 | US | Treasury Secretary Scott Bessent | |
| 06/03/2025 | 2030/1530 | US | Fed Governor Christopher Waller | |
| 06/03/2025 | 0000/1900 | US | Atlanta Fed's Raphael Bostic | |
| 07/03/2025 | 0700/0800 | ** |  DE | Manufacturing Orders |
| 07/03/2025 | 0745/0845 | * |  FR | Foreign Trade |
| 07/03/2025 | 0800/0900 | ** |  ES | Industrial Production |
| 07/03/2025 | 0930/1030 | EU | Lagarde Address at ECB International Women's Day 2025 conf | |
| 07/03/2025 | 0940/1040 | EU | ECB International Women's Day conf. incl. Lagarde, Nagel, Panetta | |
| 07/03/2025 | 1000/1100 | *** | EU | GDP (final) |
| 07/03/2025 | 1000/1100 | * | EU | Employment |
| 07/03/2025 | - | *** |  CN | Trade |
| 07/03/2025 | 1330/0830 | *** | CA | Labour Force Survey |
| 07/03/2025 | 1330/0830 | *** | US | Employment Report |
| 07/03/2025 | 1500/1500 |  GB | BOE's Mann lecture at RBNZ on 'holding anchor' | |
| 07/03/2025 | 1515/1015 | US | Fed Governor Michelle Bowman | |
| 07/03/2025 | 1545/1045 | US | New York Fed's John Williams | |
| 07/03/2025 | 1720/1220 | US | Fed Governor Adriana Kugler | |
| 07/03/2025 | 1730/1230 | US | Fed Chair Jerome Powell | |
| 07/03/2025 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 07/03/2025 | 1800/1300 | US | Fed Governor Adriana Kugler | |
| 07/03/2025 | 2000/1500 | * | US | Consumer Credit |