EXECUTIVE SUMMARY
- TURKISH MARKETS ROILED BY ARREST OF KEY OPPOSITION FIGURE, TRY DROPS AS MUCH AS 10%
- BOJ HOLDS RATE AT 0.50%, EYES TRADE POLICIES
- ZELENSKY ACCUSES RUSSIA OF REJECTING CEASEFIRE
- MNI FED PREVIEW - WAITING OUT UNCERTAINTY
Figure 1: USD/TRY briefly rallies as much as 10% following arrest of opposition figure
Source: MNI/Bloomberg
NEWS
TURKEY (MNI): Markets Roiled by Arrest of Key Opposition Figure, TRY Drops as Much as 10%
USD/TRY has rallied significantly at the start of Wednesday’s session, up around 6% though gains had previously eclipsed 10%, which placed the pair above the 41.00 handle. Istanbul mayor Ekrem Imamoglu was taken into custody early Wednesday morning, triggering the sell-off across Turkish assets. Alongside the drop in the lira, the benchmark Borsa Istanbul 100 Index fell 6.9% at the open, prompting a trading suspension under the circuit-breaker rules.
MNI FED PREVIEW - MARCH 2025: Waiting Out Uncertainty
The majority of analysts expects the FOMC to leave its Dot Plot funds rate medians unchanged in March compared with the December meeting. That would imply the Fed is still pencilling in 50bp of cuts in 2025 (to 3.9%) and 2026 (to 3.4%), with a further 25bp cut in 2027 (to 3.1%). The lack of conviction to resume the easing cycle comes in the context of significant government policy shifts posing arguably two-way risks to both the inflation and employment mandates, as well as mixed economic activity indicators and still-elevated inflation readings.
MNI BOE PREVIEW - MARCH 2025: Uncertain Vote Split, Near Certain Outcome and Guidance
It would be a huge surprise to us, markets and sellside economists if there was anything other than a pause in the MPC’s cutting cycle at the March meeting with unchanged guidance. Probably the most interesting unknown is the voting split, with the number of plausible dovish dissents ranging from two to four – we suspect with a low conviction that there could be three, one more than consensus – although even this is unlikely to give a huge signal over future policy.
MNI SNB PREVIEW - MARCH 2025: End in Sight, Question Is When
Markets see a 25bp cut to 0.25% at Thursday’s meeting as most likely but do acknowledge the risks of a hold, with OIS-implied odds standing around 70/30 in favour of easing. Inflation has slowed further since the December meeting, but has printed slightly above the conditional SNB inflation forecast for Q1 so far. This, together with any potential changes to the policy statement rate outlook, could give a hint on terminal rate considerations.
US (BBG): US Chief Justice Rebukes Trump Call to Impeach Judges
US Chief Justice John Roberts said the impeachment of federal judges is “not an appropriate response” to disagreement with their rulings, issuing an extraordinary statement hours after President Donald Trump called for removal of a judge in Washington. “For more than two centuries, it has been established that impeachment is not an appropriate response to disagreement concerning a judicial decision,” the Supreme Court’s leader said Tuesday in an emailed statement. “The normal appellate review process exists for that purpose.”
US (BBG): Trump Hosts Top UAE Official to Discuss Investments, Chips
US President Donald Trump hosted a senior UAE official for dinner Tuesday at the White House, as the Gulf nation pushes to ease access to US technology by investing in the country. Sheikh Tahnoon Bin Zayed Al Nahyan, the UAE’s national security adviser and brother of the nation’s president, planned to talk with Trump about increasing Emirati investment in the US, technology and energy, according to people familiar with the meeting who requested anonymity before the discussion because it was not publicly announced.
BOJ (MNI): BOJ Holds Rate at 0.50%, Eyes Trade Policies
The Bank of Japan board on Wednesday unanimously decided to keep the unsecured overnight call loan rate at 0.50%, noting it would watch trade and other policies amid high uncertainties. The BOJ also maintained the view that underlying CPI is likely to be at a level generally consistent with the price stability target in the second half of the projection period of the January 2025 Outlook Report. “With firms’ behaviour shifting more toward raising prices recently, exchange rate developments are, compared to the past, more likely to affect prices,” the board warned.
BOJ (MNI): BOJ to Raise Rate Cautiously - Ueda
The Bank of Japan will raise the policy interest rate if the economy and prices move in line with forecasts as real interest rates remain at considerably low levels, Governor Kazuo Ueda told reporters Wednesday. “[The] wage-price is on track. But wage hikes [in the Rengo survey released on Friday] are a little strong,” he said, following the Board’s decision to hold the policy rate at 0.5%. The results of Rengo’s first wage hike survey last Friday were largely within the bank’s forecast in January.
BOJ (MNI): BOJ Keeps Economic, Major Components View
The Bank of Japan maintained its view that Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to strengthen moderately, following the Board's decision Wednesday to hold the Policy Rate at 0.5%. The assessment on major economic components, such as exports, industrial production and private consumption, was also left from the previous meeting.
RUSSIA/UKRAINE (MNI): Zelensky Accuses Russia of Rejecting Ceasefire
Local press continue to focus on the phone call held between US President Trump and Russian President Putin yesterday. Putin agreed with Trump to limit attacks on Ukraine’s energy infrastructure while demanding the US and other nations stop the flow of weapons and intelligence to Ukraine. CNN report that Ukraine and Russia have since exchanged aerial attacks overnight, with the Russian attacks targeting civilian infrastructure including a hospital and an electricity system powering the railways in Ukraine’s central Dnipropetrovsk region, according to officials. "Today, Putin effectively rejected the proposal for a full ceasefire," Ukrainian President Volodymyr Zelensky said on X.
UK (FT): Reeves to Squeeze Public Spending Further in Spring Statement
UK chancellor Rachel Reeves is planning a new, multibillion-pound public spending squeeze in next week’s Spring Statement, following the announcement on Tuesday of £5bn in welfare cuts. Reeves is looking for further cuts to fill a hole in the public finances and will trim proposed budgets for Whitehall departments later in the parliament, according to officials briefed on her plans.
EU/RUSSIA (MNI): Kallas: 'Russia Cannot Be Trusted'; EU to Publish Defence White Paper
Reuters reporting comments from EU High Representative for Foreign Affairs and Security Policy Kaja Kallas, speaking on the phone call between Presidents Donald Trump and Vladimir Putin on 18 March. Kallas says that it is "clear that Russia does not really want to make any kind of concessions", and that "Russia can't be trusted." Claims that "what Russia wants is for Ukraine to let its guard down." Kallas says that southern Europe is part of the 'coalition of the willing' that will militarily help Ukraine. Following Putin's demand that all foreign aid to Kyiv stops, Kallas says that "Ukraine has to be able to defend itself".
CHINA/GERMANY (MNI): China-Germany to Deepen Green Cooperation
MNI (Beijing) China and Germany will continue deepening cooperation in energy efficiency and climate change this year, the National Development and Reform Commission announced on Wednesday, citing a recent meeting with German counterparts. Liu Dechun, director of the Environmental and Resources Department at the NDRC attended the meeting and summarised the working group’s achievements in 2024 and set out the work plan for this year, which includes working together on energy standards and efficiency, the readout stated.
BI (BBG): Indonesia Holds Rate Steady to Back Rupiah After Market Rout
Indonesia’s central bank kept its key interest rate unchanged for a second straight month, seeking to safeguard the rupiah after concerns about the economy’s outlook triggered a market selloff this week. Bank Indonesia kept the BI-Rate at 5.75% on Wednesday as predicted by most of the economists in a Bloomberg News survey. The central bank also maintained its 2025 economic growth forecast at 4.7%-5.5% and kept its inflation target at 1.5%-3.5%.
CORPORATE (FT): Elon Musk’s X Obtains $44bn Valuation in Sharp Turnaround
Social media site X’s valuation has soared back to $44bn, underscoring the sharp turnaround in the company’s fortunes since its owner Elon Musk assumed the role of staunch ally to President Donald Trump. Investors valued the platform at $44bn in a so-called secondary deal earlier this month, in which they exchange existing stakes in the company, according to two people with knowledge of the matter.
CORPORATE (FT): Nvidia Bets on High Demand for More Computing Power With New AI Chip
Nvidia has unveiled the next generation of its artificial intelligence chips, marking a bet that the arrival of “reasoning” AI systems such as DeepSeek will spur even greater demand for computing power. Jensen Huang, Nvidia’s chief executive, reassured investors at the chipmaker’s annual GTC conference on Tuesday that the spending spree on AI infrastructure over the past two years, and appetite for ever-faster AI chips and software, would continue to grow.
DATA
UK DATA (MNI): Brightmine Median Pay Awards at Lowest Level Since 2021 for Third Month
- UK DEC-FEB MEDIAN PAY AWARDS +3%: Brightmine
Brightmine median pay awards in the 3 months to February remained at 3.0%, the third consecutive monthly reading where pay awards have remained at the lowest level since December 2021. The press releases notes this is "marking a clear shift from last year's generous settlements" with "businesses reducing budgets, delaying pay decisions and considering pay freezes ahead of NIC [National Insurance Contribution] increases". Pay awards are now aligned with CPI inflation at 3% Y/Y, ending a 15-month period whereby it outpaced inflation.
SWEDEN DATA (MNI): Unsurprising Uptick in Inflation Expectations in March
Swedish inflation expectations unsurprisingly accelerated in March, according to the latest Origo Survey, adjusting to the stronger-than-expected developments in spot inflation figures in Jan/Feb. Even so, the Riksbank will take note of a slight de-anchoring of longer term expectations at tomorrow's decision. The quarterly survey includes responses from labour market parties and purchasing managers, alongisde the usual money market participants.
JAPAN DATA (MNI): Japan's Feb Exports Rise 11.4%; Auto Shipments Up
- JAPAN POSTS JPY584.5 BLN TRADE SURPLUS IN FEB
- JAPAN FEB EXPORTS +11.4% Y/Y; JAN +7.3%
- JAPAN JAN CORE MACHINE ORDERS -3.5% M/M; DEC -0.8%
Japan’s exports posted their fifth straight rise in February, up 11.4% from January's 7.3% driven by higher automobile shipments, which grew 2.9 percentage points to 13.4%, data released by the Ministry of Finance showed on Wednesday showed. Imports fell 0.7% in February for the first m/m drop in three months following +16.5% in January. Japan also posted a trade surplus of JPY584.5 billion, the first surplus in two months following January's JPY2.74 trillion deficit.
FOREX: EUR Undermined by Jolt in Turkish Political Uncertainty
- The greenback is rallying against all others in early Wednesday trade - firmer on the back of the political uncertainty stemming from Turkey. Local police have detained the Istanbul Mayor Imamoglu and presumed primary opposition to Erdogan at the 2028 President election, prompting a sharp spell of weakness for the Turkish currency and local equities. Given Turkey's close proximity to the global security picture, and key influence over the Russia-Ukraine conflict, markets more broadly are reacting, putting the USD higher and AUD, NZD lower.
- The BoJ decision noted some unease over the outlook for tariffs at their unchanged rate decision overnight - but importantly Ueda stressed that the BoJ won't be rushed into raising rates - with the risk of falling behind the curve not very high at this stage.
- EUR/USD slippage picked up to press EUR/USD to 1.0874 on the Turkish newsflow, and while much of that decline has been reversed into the NY crossover, the price action goes to show that the pair can swiftly suffer from intraday reversals on the right newsflow - despite the underlying bull trend in the pair.
- The Fed decision ahead takes focus next, and while the FOMC are not expected to take policy action today, the SEP and divergence of views over the trajectory of the economy will be key to any market reaction. ECB speakers today include de Guindos, Villeroy and Elderson.
EGBS: Bund Futures Retrace Turkey-Inspired Risk-off Bid
Bund futures are off session highs, with this morning’s risk-off bid in response to fresh Turkish political turmoil fading as European equities recover. Regional headline flow has otherwise been light, with the BOJ decision/press conference having a little net impact on the space.
- Bunds are +30 ticks versus yesterday’s settlement at 128.17. The March 10 high at 128.33 was pierced during this morning’s short-lived rally to 128.66.
- The overarching technical trend remains bearish though, with firm resistance not seen until 129.41, the Jan 14 low.
- The German curve has bull flattened, with 30-year yields 2.5bps lower on the session. Germany will sell E1.0bln of the 0% Aug-50 Bund alongside E1.5bln of the 1.80% Aug-53 Bund at 1030GMT.
- Today’s regional data calendar includes the final February HICP inflation report at 1000GMT, where focus will be on the details of services components and the ECB’s underlying inflation metrics. Final Q4 labour costs are also due - the prelim read was 4.1% Y/Y for the Business Economy (WDA).
- ECB speak is due from Centeno, de Guindos, Villeroy and Elderson. Broader global focus remains on the FOMC decision this evening.
GILTS: Pullback From Highs Extends as Wider Risk-Off Flows Moderate
Gilts hold away from session highs as the risk-off flow surrounding Turkey moderates from extremes.
- Signs of official intervention in the TRY countered some of the risk-negative flow.
- A reminder that UK market reaction to increased political tension in Turkey was more modest than what was seen in Bunds, given the greater linkages between Turkey and the continent.
- Futures just off lows, last 92.22.
- The bearish technical picture in the contract remains intact, initial resistance at 92.63, with initial support at 91.07.
- Yields flat to 1bp lower, curve marginally flatter.
- 10s ~1.5bp wider to Bunds at 185bp, above last week’s closing high (184.4bp).
- Domestic news flow remains, muted with focus on macro and cross-market drivers evident ahead of tomorrow’s labour market data and BoE decision.
- Expect focus to fall on the vote split, with no expectations for a move in Bank Rate.
- BoE-dated OIS little changed on the day, showing effectively 0 odds of a move tomorrow, 17.5bp of easing through May, 22.5bp through June, 35.5bp through August and 52bp through year-end.
- Our labour market data preview will be released later today.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.459 | +0.5 |
May-25 | 4.281 | -17.3 |
Jun-25 | 4.230 | -22.5 |
Aug-25 | 4.100 | -35.5 |
Sep-25 | 4.051 | -40.3 |
Nov-25 | 3.959 | -49.6 |
Dec-25 | 3.936 | -51.9 |
EQUITIES: Medium-Term Trend Direction for Eurostoxx 50 Futures Remains Up
Eurostoxx 50 futures have recovered from their recent lows. The M/T trend direction remains up and the recent pullback is considered corrective. Support to watch is the 50-day EMA, at 5326.29. It has recently been pierced. A clear break of this average would highlight a stronger short-term bear threat and suggest scope for a deeper retracement towards 5202.00, a Fibonacci retracement. A continuation higher would open the 5600.00 handle. The trend condition in S&P E-Minis remains bearish and the contract continues to trade closer to its recent lows. Moving average studies are in a bear-mode set-up highlighting a dominant downtrend. Sights are on 5483.50, a Fibonacci projection. Note that the short-term trend condition is oversold. Recent gains are considered corrective and the bounce is allowing this set-up to unwind. Firm resistance to watch is 5955.55, the 50-day EMA.
- Japan's NIKKEI closed lower by 93.54 pts or -0.25% at 37751.88 and the TOPIX ended 12.4 pts higher or +0.45% at 2795.96.
- Elsewhere, in China the SHANGHAI closed lower by 3.33 pts or -0.1% at 3426.429 and the HANG SENG ended 30.57 pts higher or +0.12% at 24771.14.
- Across Europe, Germany's DAX trades lower by 60.1 pts or -0.26% at 23319.95, FTSE 100 lower by 26.86 pts or -0.31% at 8679.33, CAC 40 up 8.26 pts or +0.1% at 8121.98 and Euro Stoxx 50 down 3.64 pts or -0.07% at 5480.97.
- Dow Jones mini up 29 pts or +0.07% at 41642, S&P 500 mini up 5.75 pts or +0.1% at 5624, NASDAQ mini up 26 pts or +0.13% at 19522.75.
Time: 08:50 GMT
COMMODITIES: Gold Comfortably Clears $3000 Handle, Reinforcing Bullish Trend
A bearish condition in WTI futures remains intact and the latest round of gains appear corrective - for now. Recent weakness resulted in a breach of $69.80, the Feb 4 low. This confirmed a resumption of the downtrend that started Jan 15 and has paved the way for an extension towards $63.73 next, the Oct 10 ‘24 low. MA studies are in a bear-mode position, highlighting a dominant downtrend. Key pivot resistance to watch is $69.29, 50-day EMA. A clear uptrend in Gold remains intact and this week’s resumption of the bull cycle reinforces current conditions. The yellow metal has cleared the psychological $3000.0 handle. Bulls have their sights on 3056.84 next, a Fibonacci projection. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Key trend support is at $2832.7, Feb 28 low.
- WTI Crude down $0.47 or -0.7% at $66.43
- Natural Gas up $0.03 or +0.67% at $4.079
- Gold spot down $7.81 or -0.26% at $3026.88
- Copper up $2.65 or +0.53% at $504.45
- Silver down $0.32 or -0.95% at $33.684
- Platinum down $15.25 or -1.52% at $988.71
Time: 08:50 GMT
| Date | GMT/Local | Impact | Country | Event |
| 19/03/2025 | 1000/1100 | *** |  EU | HICP (f) |
| 19/03/2025 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 19/03/2025 | 1200/1300 | EU | ECB de Guindos In Madrid | |
| 19/03/2025 | 1300/1400 | EU | ECB Elderson At European Financials Conference | |
| 19/03/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 19/03/2025 | 1800/1400 | *** | US | FOMC Statement |
| 19/03/2025 | 2000/1600 | ** | US | TICS |
| 20/03/2025 | 2145/1045 | *** |  NZ | GDP |
| 20/03/2025 | - |  CH | Swiss National Bank Meeting | |
| 20/03/2025 | 0030/1130 | *** |  AU | Labor Force Survey |
| 20/03/2025 | 0700/0700 | *** |  GB | Labour Market Survey |
| 20/03/2025 | 0700/0800 | ** |  DE | PPI |
| 20/03/2025 | 0800/0900 | EU | ECB's Lagarde At ECON Hearing | |
| 20/03/2025 | 0830/0930 | *** | CH | SNB PolicyRate |
| 20/03/2025 | 0830/0930 | *** |  SE | Riksbank Interest Rate Decison |
| 20/03/2025 | 0830/0930 | *** | CH | SNB Interest Rate Decision |
| 20/03/2025 | 0900/1000 |  NO | Q1 Regional Network Survey | |
| 20/03/2025 | 1000/1100 | ** | EU | Construction Production |
| 20/03/2025 | 1100/1100 | ** | GB | CBI Industrial Trends |
| 20/03/2025 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
| 20/03/2025 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
| 20/03/2025 | 1200/1300 | EU | ECB's Lane At UCC Economics Society's Conference | |
| 20/03/2025 | 1200/1200 | GB | Agents summary of business conditions | |
| 20/03/2025 | 1230/0830 | * |  CA | Industrial Product and Raw Material Price Index |
| 20/03/2025 | 1230/0830 | *** | US | Jobless Claims |
| 20/03/2025 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
| 20/03/2025 | 1230/0830 | ** | US | Philadelphia Fed Manufacturing Index |
| 20/03/2025 | 1230/0830 | * | US | Current Account Balance |
| 20/03/2025 | 1400/1000 | *** | US | NAR existing home sales |
| 20/03/2025 | 1430/1030 | ** | US | Natural Gas Stocks |
| 20/03/2025 | 1530/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 20/03/2025 | 1530/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 20/03/2025 | 1650/1250 | CA | BOC Governor speaks in Calgary | |
| 20/03/2025 | 1700/1300 | ** | US | US Treasury Auction Result for TIPS 10 Year Note |
| 21/03/2025 | 2330/0830 | *** |  JP | CPI |