- Tariff tangle. Tariff ambiguity saw markets open this week on a fragile footing. The Supreme Court’s IEEPA ruling and the shift to 15% replacement tariffs revived structural dollar‑bearish arguments tied to fiscal sustainability and the case for broader FX diversification.
- Deadline diplomacy. President Trump’s March 1–6 ultimatum to Tehran over its nuclear programme kept geopolitics front and centre, with oil prices whipsawing as markets parsed conflicting signals on the state of negotiations.
- AI angst. A sharp sell‑off followed a Citrini Research note outlining hypothetical AI‑disruption scenarios, underscoring how primed investors remain to latch onto downside narratives in the tech complex.
- Nvidia no‑show. Nvidia’s earnings beat failed to support broader tech stocks, with markets disappointed by the lack of clarity around forward drivers — prompting a swift reversal in equity gains.
- Metal momentum. Gold is on track for its strongest monthly run since 1973, while silver is set for a tenth consecutive monthly gain — its longest streak in decades — despite early‑month turbulence.
- Sterling stumble. GBP hit a two‑month low versus the euro after Labour’s by‑election loss reignited UK political uncertainty, raising the risk of further pressure on gilts and sterling if Starmer’s leadership comes under strain.
Global Macro
The ‘think-piece’ that shocked the markets
Citrini shock. The 2028 Global Intelligence Crisis report from Citrini Research has crystalized 2026’s latent market fears. By forecasting a “nightmare” of 10% AI-driven unemployment and a demand-led S&P 500 crash, it pivots the AI narrative. In this view, AI isn’t a growth catalyst; it’s a disruption engine that liquidates value more efficiently than it builds it. Market reaction revealed less about the report’s accuracy than about investor readiness to embrace a downside narrative, especially for business models ripe for digitization, replication, or disintermediation.
Peak chip anxiety. Nvidia delivered, but the “blowout beat” has lost its charge. Despite insatiable demand for AI agents, the market’s focus has shifted to the zero-sum nature of the trade: Nvidia’s margins are the hyperscalers’ costs. This ROI anxiety triggered a “sell the news” rout, dragging the Nasdaq down 1% and sending the VIX back on the offensive.
China. After returning from a long market holiday, the PBOC held its 1-year and 5-year LPRs steady at 3.00% and 3.50% for a ninth month, prioritizing stability. However, the “China trade” remains volatile as the US launches new Section 301 investigations into Chinese business practices.
US labor market. Jobless claims rose slightly to 212k—beating the 215k consensus—while continuing claims hit a 10-month low. The data reinforces a “low-hire, low-fire” environment that remains resilient despite broader market turbulence.
Europe. German Ifo data signaled a cautious sentiment recovery in February, but the mood is soured by trade friction. European officials are now threatening to freeze US trade ratifications until the latest 15% tariff threats are resolved.
Week ahead
US jobs report leads
- US data caution ahead of payrolls. Key event this week is the US jobs report. Investors have been treating US macro with caution. The dollar’s muted reaction to January’s strong NFP reflected a particularly soft dollar sentiment, which now appears to have eased. A more hawkish Fed tone has helped.
- Fresh uncertainty hits ECB outlook. The preliminary release of eurozone inflation for February is due. ECB officials remain committed to keeping rates unchanged for now. Still, renewed trade uncertainty and geopolitical turmoil pushing oil prices higher add a non‑negligible layer of uncertainty that may challenge the on‑target outlook.
- Fed focus shifts back to inflation. The Fed Beige Book is due. Messaging at the January meeting leaned hawkish when the FOMC held rates steady. We expect that bias to come through again, with the Fed shifting focus away from a previously soft labour market – now looking more stable – toward still‑above‑target inflation.
- Germany orders test demand rebound. Germany’s factory orders will also be in focus. After a whopping 13% year‑on‑year rise in December, the January print will show whether the pickup in demand since September 2025 is continuing as the German economy attempts a rebound after a year of stagnant growth.
FX views
Trade clarity still missing
USD Greenback holds the line. The dollar index (DXY) spent the week consolidating, tracking the 50‑day moving average fairly closely. With the slope of that average now nearly flat, the index continues to signal a broader directional bias that remains muted. With little on the data front – except for upbeat Conference Board sentiment indicators – the dollar struggled to latch onto macro drivers that might have justified a move higher this week. On the sentiment side, the options market shows a clear improvement (see chart on the right), though it still lacks clear directional conviction. Broader markets remain cautious, which helps explain the technical hesitation around testing the 50‑day average, as investors wait for further clarity on the newly emerging trade narrative following the Supreme Court ruling on Trump’s tariffs. Meanwhile, rising tensions between Iran and the United States – with Washington deploying its largest military force in the region since 2003 – are providing underlying support for the greenback through the oil channel. The geopolitical risk has accelerated the dollar’s rebound from the January lows at 95.551, although it still looks insufficient to push the index through the 98 mark unless tensions escalate further.
EUR Dollar still in charge. EUR/USD ends the week about 0.2% higher but still lacks real direction. The dollar continues to steer price action, while ECB officials stay neutral on the policy outlook. The pair has been gliding along the 50‑day moving average near 1.1777, reluctant to slip below 1.18. That hesitation partly reflects uncertainty over how to read the Supreme Court’s ruling on President Trump’s tariff authority. So far, markets see the decision as offering no clear advantage to either the eurozone or the US. Tariffs sit at 10%, below the previously agreed 15% level, and even a return to 15% wouldn’t be viewed as a deterioration. This backdrop has kept FX moves muted, while a cautious tone persists as uncertainty stays elevated.
GBP February’s fade. GBP/EUR has fallen in more than 60% of Februarys on record, and this year has conformed to that seasonal pattern. A dovish repricing of BoE expectations, softer UK data and renewed political uncertainty following Labour’s by‑election loss have pushed GBP/EUR over 1% lower to a fresh two‑month low. The 100‑day moving average near €1.1456 — a reliable floor since January — has now flipped into resistance, reinforcing the shift in momentum. GBP/USD has slipped 1.4%, ending a three‑month winning streak and erasing year‑to‑date gains, though the broader uptrend in place since 2022 remains intact. Sterling has also been sensitive to swings in global risk sentiment, but the more important development is the re‑emergence of a UK‑specific risk premium. The pound is outperforming only 4% of a 50‑currency global basket this month, signalling that investors are demanding additional compensation for domestic political and macro uncertainty rather than simply rotating into the dollar or euro. While no immediate policy changes are expected, the political backdrop remains a source of potential volatility. A weak showing in May’s local elections could increase internal pressure on party leadership and keep a risk premium embedded in UK assets.
CHF Franc foundations. The franc appears to have found a near‑term floor around 0.91 against the euro, but the underlying structural forces supporting CHF remain intact. Switzerland’s low debt burden, stable macro framework, and policy predictability continue to differentiate it from economies facing fiscal uncertainty and geopolitical exposure. Switzerland’s subdued inflation profile and strong fiscal position reinforce its “gold-like” haven appeal. Plus, recent comments from the SNB suggesting the bank would tolerate negative inflation prints in 2026 signal a high bar for renewed intervention or policy easing aimed at weakening the currency. Meanwhile, safe‑haven demand is likely to persist amid elevated geopolitical and trade tensions. However, hawkish repricing of Fed expectations, combined with rising oil prices linked to US–Iran tensions, could actually lift USD/CHF in the near term, while a stabilising euro area backdrop may offer temporary support to EUR/CHF too.
CAD Following USD’s cue. The Canadian dollar largely mirrored the US dollar’s upward trajectory this week, climbing from a low of 1.3649 to an intraday peak of 1.3725 on February 24th as the US dollar Index (DXY) rallied toward 98.0. Despite this initial surge fueled by broad-based dollar demand, the USD/CAD pair eventually lost momentum and settled into a choppier range near 1.368, reflecting a degree of relative resilience in the Loonie even as the DXY pursued new weekly highs. This recent price action fits into a broader trend of significant compression; the Canadian dollar currently sits at just 17% of its 12-month range and 39% of its 36-month range. Although the 1.35 to 1.45 corridor has historically defined the pair’s boundaries, the trading range has narrowed markedly since volatility subsided last April, a stagnation driven by a neutral macroeconomic outlook and a lack of meaningful shift in yield differentials between the two nations. Next week, focus will center around US NFP on Friday.
AUD Rate hike expectations heat up. The AUD/USD was higher for the sixth-straight week but has also fallen into a short‑term trading range, with support seen at 0.7000 and resistance just below 0.7150. Australia’s January CPI held at 3.8% y/y, beating the 3.7% forecast. The trimmed mean rose to 3.4% y/y, also above expectations. The data highlights persistent price pressures and gave the Aussie fresh momentum. Markets still lean toward a May rate hike, but the odds of a March move have edged higher. This week’s higher inflation reading suggests the Aussie’s upward momentum might remain in place, but as the Reserve Bank of Australia seems unlikely to hike rates at the 17 March meeting, a more cautious update from the RBA could cool recent gains. December‑quarter GDP on Wednesday and RBA speakers on Tuesday and Wednesday are the key events.
CNH Chinese yuan leads gains in Asia. The Chinese yuan has continued to gain on positive news from the domestic front. China’s record nine‑day Lunar New Year holiday lifted services activity, with 596 million domestic trips and CNY 803.5bn in tourism spending, both up about 19% y/y, according to official data. Foot traffic surged across major scenic sites and big cities, while dining sales rose 5.2%, boosting chains such as Haidilao. A strong equity market performance in Asia – the best February ever – has also supported the region. USD/CNH fell close to 1.0% over the week, with the pair dropping to the lowest level since March 2023. That said, the USD/CNH downside momentum is looking stretched according to technical indicators like the RSI, with any recovery targeting 6.8900 for CNH buyers. PMI numbers on Wednesday are this week’s highlights.
JPY BoJ appointees drive yen weakness. The USD/JPY was mostly higher over the last week, bucking the regional Asian trend of a weaker US dollar. JPY losses were driven by the appointment of monetary‑easing favouring policymakers Asada and Sato to the Bank of Japan. Interestingly, media reports found that US authorities drove January’s “rate checks” that lifted the yen, pushed USD/JPY to 152.00, and signalled readiness for joint intervention if Japan requested it, according to the Nikkei. Acting for the US Treasury, the New York Fed stepped in without a request from Japan’s Ministry of Finance, amid concerns that Japan’s election‑year uncertainty could ripple through global markets. USD/JPY remains in a strong uptrend, as measured by key moving averages, with downside seen at 154.00 and topside at 158.00. BoJ Governor Ueda speaks on Wednesday.
MXN Consolidation amid growth revisions. From a macro perspective, 2025 was a bit of a slow-motion stroll for the economy, clocking in at a modest 0.6% growth for the year. However, the fourth quarter caught a bit of a second wind, showing some extra pep in its step thanks to a boost in the service sector and a steady recovery in industrial production. Even with a few global “gray clouds“, like trade tensions and geopolitical jitters—the economy managed to finish the year with a bit more energy than it started, proving it can hold its own when the world gets a little noisy. The Mexican peso has been a star performer, gaining about 13% against the dollar through 2025. This year alone, the Peso has gained close to 5% against the USD. Mexico’s central bank board credits this to Mexico’s solid economic fundamentals, high real yields combined with a growth forecast that targets 2.3% by 2027. All together make the currency one of the leaders of the emerging market carry trade. Investors are betting that a recovering global manufacturing cycle and artificial intelligence related investment in the US will keep the MXN buoyed regardless of short-term consolidation.
BRL Tethered to carry-appeal. The Brazilian real has surged to its strongest level since May 2024, breaking past the 5.16 mark to trade at 5.137 this week. This appreciation is anchored by the Central Bank of Brazil’s decision to maintain a restrictive 15% Selic rate, keeping its appealing real-yield spread that has accelerated carry trade inflows despite inflation hovering at 4.44%. The currency’s strength is further reinforced by a robust $4.34 billion trade surplus and a 17.4% spike in exports to China, which have pushed the USD/BRL pair well below its 50-day moving average of 5.2050. While the daily RSI near 33.4 indicates the pair is approaching oversold territory, the combination of high domestic yields and shifting US trade policy continues to favor the real, even as resilient growth complicates the outlook for future monetary easing
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
