EXECUTIVE SUMMARY
- MNI US PAYROLLS PREVIEW: WATCHING FOR WEAKNESS
- TRUMP DELAYS CANADA, MEXICO TARIFFS FOR GOODS UNDER TRADE PACT
- ECB HEADS FOR SHOWDOWN OVER WHETHER TO CUT AGAIN IN APRIL: BBG
- BOJ IS SAID TO LEAN TOWARD HOLDING KEY RATE AT MARCH MEETING: BBG
Figure 1: Recent US labour market developments
NEWS
MNI US PAYROLLS PREVIEW: Watching for Weakness
Nonfarm payrolls are seen increasing a seasonally adjusted 160k in February in the Bloomberg survey after 143k in January. Primary dealer analysts see 155k whilst the Bloomberg whisper is just 121k after a weak ADP report. Specific factors at play this month should be on the smaller side, with potentially a boost from adverse weather but some offsetting role from striking workers. We don’t expect federal government layoffs and freezing hires to materially show in this report, but the seasonality of the data leaves it susceptible to broader pausing in hiring plans.
FED (MNI): Fed's Bostic Not Expecting Clarity for a While
Federal Reserve Bank of Atlanta President Raphael Bostic on Thursday said policy uncertainty emanating from Washington on a variety of fronts only emphasizes that the Fed is on the sidelines until the effects on the economy and the outlook are more clear. "If I was waiting before to see and get a clear signal about where the economy is going to go, I'm definitely waiting now, because the directionality is very much up in the air," he said in Q&A at an event in Birmingham, Alabama, listing off uncertainties on a variety of policy fronts from DOGE, tariffs, energy, taxes, fiscal and other areas.
US (BBG): Trump Delays Canada, Mexico Tariffs for Goods Under Trade Pact
President Donald Trump exempted Mexican and Canadian goods covered by the North American trade agreement known as USMCA from his 25% tariffs, offering major reprieves to the US’s two largest trading partners. Trump signed orders Thursday paring back the tariffs, which are related to illegal immigration and fentanyl trafficking, until April 2. That is the date when the president is expected to start unveiling plans for so-called reciprocal duties on nations around the world as well as sector-specific duties.
US/JAPAN (MNI): Trade Min to Visit US as Trump Questions Bilat Security Deal
The Japanese Trade Ministry has confirmed that Minister of Economy, Trade and Industry Yoji Muto will visit the US from 9-11 March for discussions on bilateral economic ties with senior officials, including Secretary of Commerce Howard Lutnick and US Trade Representative Jamieson Greer. Last week, Muto met with senior representatives from Japan's steel and aluminium industry to discuss the prospect of higher tariffs being imposed on Japanese exports to the US. Kyodo News reported "Muto plans to directly convey concerns from Japan's industry to the United States, though it remains uncertain whether he will secure the administration's understanding."
US/MEXICO (BBG): Mexico to Review China Tariffs in Potential Win for Trump
Mexican President Claudia Sheinbaum said her country would review tariffs on Chinese shipments, a move that could give the Trump administration a win in its push to build a “Fortress North America” that blocks shipments from the Asian nation. “We have to review the tariffs that we have with China,” Sheinbaum said at a press conference Thursday. She pointed to Mexico’s problems in textile and shoe production, saying: “Much of the entry of Chinese products into Mexico caused this industry to fall in our country.”
US (FT): Donald Trump Restrains Doge as Concern Mounts Over Scale of Job Losses
Donald Trump has moved to constrain Elon Musk’s cost-cutting task force, ordering his cabinet to ensure the “most productive” civil servants are exempted from sweeping lay-offs that have wreaked havoc across the US. In a meeting at the White House on Thursday attended by secretaries of state and Musk, the president hinted the billionaire’s so-called Department of Government Efficiency may have been too indiscriminate in its mass firings of federal employees.
ECB (BBG): ECB Heads for Showdown Over Whether to Cut Again in April
European Central Bank officials are bracing for tough negotiations over whether to cut interest rates further or hold fire when they next set borrowing costs in April, according to people familiar with their thinking. Dovish policymakers currently see little reason to pause, said the people, who asked not to be identified discussing confidential conversations. Their more hawkish colleagues, though, are leaning toward a timeout to study geopolitical risks and the implications of a huge ramp-up in European defense spending, the people said.
ECB (MNI): Muller Stresses Need for Caution Around Future Rate Cuts
Highlights from Muller's usual post-ECB meeting blog pos: "We as central bankers need to be vigilant, as several factors, such as tariffs or the impact of defense spending, could accelerate price increases in the near future. To me, this means that we need to be increasingly cautious about further interest rate cuts". "It is too early to quantify the impact of potential US trade restrictions and EU retaliation on euro area growth and price increases"...."What is clear is that additional trade restrictions would reduce growth and prosperity in both the US and Europe and, at least in the short term, lead to faster price increases." For ECB policy, it "depends on whether the faster price increases associated with tariffs are only temporary".
BOJ (BBG): BOJ Is Said to Lean Toward Holding Key Rate at March Meeting
Bank of Japan officials are leaning toward keeping interest rates unchanged this month after their hike in January and as growing uncertainties in the global economy require close attention, according to people familiar with the matter. Officials see no need to rush after the central bank raised rates to 0.5% from 0.25% at their January meeting and want to assess the impact first, the people said. They’re also closely monitoring how US policies will affect both domestic and global economies, the people added.
EU (MNI): Hungary the Sole Holdout on Ukraine Support at EUCO
As was largely expected, Hungarian Prime Minister Viktor Orbn proved the sole holdout when it came to the EU's joint conclusions on supporting Ukraine at the 6 March special European Council summit. While the EU was able to unanimously back a set of conclusions supporting a major increase in defence spending across the Union, Orbn refused to give his approval to sections regarding increased military support and security guarantees for Ukraine. Instead, the remaining 26 member states backed this section as an 'extract'.
CHINA (MNI): China Could Expand Visa-Free Scheme - Wang
MNI (Beijing) China could open its visa-free visitor scheme further, after expanding the arrangement to 38 countries recently, said Wang Yi, China’s foreign minister on Friday. Wang said his Ministry would work to improve two-way travel and foreign affairs services. China’s announcement of CNY2.9 trillion in additional borrowing this year leaves space for further stimulus as the country braces for trade war with the U.S., policy advisors told MNI.
AUSTRALIA (BBG): Australia PM Albanese Signals Election to Come in May
Australian Prime Minister Anthony Albanese has ruled out calling an election over the coming weekend, ending the chances of a national vote before May as a cyclone bearing down on the country disrupted the center-left Labor government’s planning. Albanese told the Australian Broadcasting Corp. on Friday night that he would not be kicking off an election campaign on Sunday or Monday, ensuring that the 2025 vote would be held on May 3, May 10 or May 17.
S.KOREA (NYT): South Korean Court Orders Impeached President’s Release From Jail
President Yoon Suk Yeol was not immediately freed, and the ruling does not affect the insurrection charges he faces for declaring martial law. A South Korean court on Friday ordered the release from jail of Yoon Suk Yeol, the country’s impeached president, who is standing trial on insurrection charges over his decision to impose martial law in December. The Seoul Central District Court ruled that prosecutors had violated procedural rules by holding Mr. Yoon in detention longer than legally allowed before indicting him last month.
BRAZIL (BBG): Lula to Use $3.5 Billion Fund to Boost Economy as Approval Falls
Brazil plans to use a social fund that receives oil and gas exploration royalties to help boost the economy as opinion polls show President Luiz Inacio Lula da Silva’s popularity slumping to all-time lows. A provisional measure published late on Thursday installs a committee to manage the social fund that was created in 2010 to invest part of the revenue from Brazil’s pre-salt oil exploration into education. The committee, which will decide the destination of about 20 billion reais ($3.5 billion) the fund has accumulated since then, may use the money for general budget purposes or transfer it into different funds, according to a finance ministry official.
DATA
EUROZONE DATA (MNI): Final Q4 GDP Upward Revision; Investment Remains Problematic
- EUROZONE Q4 GDP +0.2% Q/Q, +1.2% Y/Y
Final Eurozone figures for Q4 2024 show GDP was upwardly revised by 0.1pp to 0.2% Q/Q on the sequential reading, and upwardly revised by 0.3pp to +1.2% Y/Y. This means that on an annual comparison, growth in the Eurozone picked up towards the end of last year, with the Q3 print at +1.0% Y/Y, and Q1 and Q2 both at +0.5%Y/Y. However, sequentially, the trend appears less favourable - Q4 remains below the 2024 quarterly average of 0.3% Q/Q.
UK DATA (FT): UK House Prices Dip In February With End to Stamp Duty Holiday, Halifax Says
UK house prices unexpectedly dipped in February, as an uptick in property sales driven by a tax holiday came to an end, according to mortgage lender Halifax. The average UK house price fell 0.1 per cent from January to £298,602, Halifax said. On an annual basis, the average price rose at a rate of 2.9 per cent, the same rate as January.
SPAIN DATA (MNI): IP Begins Year on Weak Footing
Spanish industrial production fell 1.0% on a monthly and annual basis in January (vs 1.1% M/M and 2.0% Y/Y prior). Both readings were quite a bit weaker than consensus of -0.2% M/M and 1.3% Y/Y, but note that only four analysts submitted forecasts for the M/M print and five for the Y/Y. On a 3m/3m basis, IP was flat in January (vs 1.5% prior), the weakest pace in four months. While a volatile series, the developments track waning momentum in the EC industry sentiment and manufacturing PMI surveys. A reminder that the February manufacturing PMI inched into contractionary territory for the first time in 13 months in February.
NORWAY DATA (MNI): Tentative Evidence of Recovery in Manufacturing IP
Norwegian manufacturing industrial production fell 1.5% M/M in January after two months of positive sequential readings prior. However, on a 3m/3m basis production rose 1.5%, due to soft prints through August-October. Headline IP fell 1.7% M/M (vs -0.1% prior), corresponding to a -6.5% Y/Y rate. On a 3m/3m basis, strength was seen in intermediate (2.7% vs 1.4% prior) and capital (1.4% vs -0.2% prior) goods, but consumer goods production remains soft (-1.2% vs -2.1% prior). The latter development is likely reflective of subdued Norwegian mainland demand.
CHINA DATA (MNI): China's Jan-Feb Exports Slow; Imports Weak
- CHINA JAN-FEB TRADE SURPLUS +$170.5 BLN VS MEDIAN +$147.5 BLN
- CHINA JAN-FEB EXPORTS +2.3% Y/Y VS MEDIAN +5.9% Y/Y
- CHINA JAN-FEB IMPORTS -8.4% Y/Y VS MEDIAN +1.0% Y/Y
China's exports grew 2.3% y/y to USD539.94 billion in the first two months of 2025, missing the 5.9% y/y consensus, according to data released by China Customs on Friday. Imports, which amounted to USD369.43 billion, registered a 8.4% y/y drop, far behind from the consensus of a 1.0% y/y increase. China’s trade surplus in the Jan-Feb period hit USD170.5 billion, compared with the consensus of USD147.5 billion. Exports and imports with ASEAN, the EU and the U.S. drove the total trade volume by 15.8%, 12.7% and 11.2% respectively.
RATINGS: A Mix of Stable & Positive Outlooks Up for Review Later
Sovereign rating reviews of note scheduled for after hours on Friday include
- Fitch on Malta (current rating: A+; Outlook Stable)
- Moody’s on Estonia (current rating: A1; Outlook Stable)
- S&P on Norway (current rating: AAA; Outlook Stable)
- Morningstar DBRS on Greece (current rating: BBB (low), Positive Trend)
- Scope Ratings on Latvia (current rating: A-; Outlook Stable) & Lithuania (current rating: A; Outlook Positive)
Please use this link to access the indicative sovereign rating review schedule covering the five most notable rating agencies for 2025. Note that this schedule is indicative only and ratings can be reviewed on an ad-hoc basis. Rating agencies may also adjust their schedules during the year.
FOREX: EUR Extends Winning Streak, 5 Sessions of Higher Highs
- EUR/USD has extended this week's winning streak despite a more stable European bond market, meaning EUR/USD has posted higher highs in each of the past five sessions, putting the pair closer within range of the $1.0900 handle.
- Antipodean currencies are seeing little reprieve from Trump's decision to avoid the immediate impact of the harshest tariffs against Canada and Mexico. As such, AUD and NZD have rolled off the midweek highs against the dollar, further cementing the 100-dma as near-term resistance in AUD/USD, having posted a failed break on two separate occasions now.
- This leaves the USD mixed against most others, and the USD Index softer. The USD Index is comfortably through the 104.00 handle having closed below Thursday confirming a further close of the pre-election gap. Technical support here undercuts at 103.373 and 102.521.
- In a rare post-payrolls appearance, Fed Chair Powell is set to speak on the economic outlook just a few hours after the NFP print. Text is set to be released, with a subsequent Q&A. Importantly, this means Powell makes one of the final Fed appearances before the media blackout kicks in at the close today.
- Payrolls are expected to print at +160k today - and we don’t expect federal government layoffs and freezing hires to materially show in this report, but the seasonality of the data leaves it susceptible to broader pausing in hiring plans. The unemployment rate is seen holding at 4.0% after a surprise drop in January, in a close call with 4.1%.
EGBS: Oil and Gas Rally Limits Upside in Bund Futures
Bund futures are +71 ticks at 127.73, supported by today’s pullback in European equities. However, topside has been limited by the rally in crude oil and natural gas prices.
- Technical conditions in Bunds remain bearish following this week’s fiscal/defence spending-induced sell-off. Any recoveries would allow an oversold condition to unwind. Initial firm resistance is seen at 129.41, the Jan 14 low.
- The German curve has lightly twist steepened, with 30-year yields up 1bp.
- Eurozone Q4 GDP saw a one tenth upward revision on a rounded basis to 0.2% Q/Q, above the flash 0.0% and advance 0.1% readings. On the other hand, German Jan factory orders and Spanish Jan IP were weak. None of the data were material market movers.
- 10-year EGB spreads to Bunds are mixed. OATs and PGBs underperform a little with spreads 1bp wider on the session.
- ECB’s Villeroy and Muller have provided somewhat cautious commentary around the rate outlook this morning.
- Broader macro focus remains on today’s US labour market report and subsequent commentary from Fed Chair Powell.
GILTS: Uptick in Oil Weighs
Gilt futures away from session highs, coming under pressure as European equities tick off lows and oil rallies.
- Futures as low as 91.67.
- The technical downtrend in the contract remains intact, although it is in oversold territory.
- Initial support at 90.71, with resistance at 92.08.
- Yields 3-4bp higher across the curve.
- 10-Year UK/German spread +2.5bp at 185.5bp, after registering the tightest close since September yesterday.
- GBP STIRs unwind some of yesterday’s late dovish move.
- BoE-dated OIS flat to ~3bp hawkish vs. late Thursday levels, 17.5bpof cuts priced through May, 22bp through June, 35bp through August and 48bp through year-end.
- We still look for the next cut to come in May.
- SONIA futures -1.0 to +3.0.
- UK headline flow remains muted.
- Little of note on the UK calendar ahead of the weekend, which will leave focus on macro and cross-market cues. The U.S. NFP release headlines the global calendar.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.461 | +0.6 |
May-25 | 4.280 | -17.5 |
Jun-25 | 4.233 | -22.2 |
Aug-25 | 4.104 | -35.1 |
Sep-25 | 4.071 | -38.4 |
Nov-25 | 3.990 | -46.5 |
Dec-25 | 3.973 | -48.2 |
EQUITIES: Sell-Off in E-Mini S&P This Week Reinforces Short-Term Downtrend
The trend in the Eurostoxx 50 futures contract remains bullish with price trading closer to its recent 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 5299.82. For bulls, a continuation higher would open the 5600.00 handle next. A bear threat in S&P E-Minis remains present and a sharp sell-off this week reinforces a short-term downtrend. The contract traded to a fresh short-term cycle low again, Thursday, marking an extension of the current bear leg. This reinforces a stronger reversal and a double top pattern on the daily scale. The focus is on 5698.25, a Fibonacci retracement. Initial firm resistance to watch is 6002.65, the 50-day EMA.
- Japan's NIKKEI closed lower by 817.76 pts or -2.17% at 36887.17 and the TOPIX ended 42.82 pts lower or -1.56% at 2708.59.
- Elsewhere, in China the SHANGHAI closed lower by 8.552 pts or -0.25% at 3372.546 and the HANG SENG ended 138.41 pts lower or -0.57% at 24231.3.
- Across Europe, Germany's DAX trades lower by 286.12 pts or -1.22% at 23115.55, FTSE 100 lower by 19.66 pts or -0.23% at 8664.47, CAC 40 down 51.78 pts or -0.63% at 8129.93 and Euro Stoxx 50 down 31.75 pts or -0.58% at 5481.35.
- Dow Jones mini up 97 pts or +0.23% at 42694, S&P 500 mini up 20.5 pts or +0.36% at 5766.5, NASDAQ mini up 102 pts or +0.51% at 20199.25.
Time: 09:50 GMT
COMMODITIES: Trend Condition in Gold Unchanged and Bullish
The current bearish trend condition in WTI futures remains intact and this week’s fresh short-term cycle lows reinforce 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 $70.68, the 50-day EMA. The trend condition in Gold is unchanged, it remains bullish and the recent pullback appears to have been a correction. A stronger rally would refocus attention on $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 $2820.3. The 50-day average marks a key support.
- WTI Crude up $0.75 or +1.13% at $67.19
- Natural Gas down $0.06 or -1.49% at $4.244
- Gold spot up $8.51 or +0.29% at $2921.49
- Copper down $2.35 or -0.49% at $478.4
- Silver down $0 or 0% at $32.6325
- Platinum up $4.93 or +0.51% at $973.22
Time: 09:50 GMT
| Date | GMT/Local | Impact | Country | Event |
| 07/03/2025 | 1330/0830 | *** |  CA | Labour Force Survey |
| 07/03/2025 | 1330/0830 | *** |  US | Employment Report |
| 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 | Fed Governor Adriana Kugler | |
| 07/03/2025 | 2000/1500 | * | US | Consumer Credit |
| 09/03/2025 | 0130/0930 | *** |  CN | CPI |
| 09/03/2025 | 0130/0930 | *** | CN | Producer Price Index |
| 10/03/2025 | 2330/0830 | ** |  JP | average wages (p) |