Dollar bears painted the town red throughout the day while crude oil rallied and reversed on supply and demand dynamics.
Gold briefly touched a new record high as it inched closer to the $3,000 handle, lifted by persistent market uncertainty.
Here are the latest headlines you need to know!
Headlines:
- Reuters poll published on Thursday show that the BOJ will raise interest rates again this year, possibly to 0.75%
- U.S. Treasury Secretary Scott Bessent says that the Treasury won ‘t be in a hurry to auction more longer-term securities
- Australia employment change in January: 44K (19.4K forecast, previous reading upgraded to 60K) but jobless rate ticked higher from 4.0% to 4.1% due to higher labor force participation
- PBOC kept prime loan rates on hold at 3.60% for five years and 3.10% for 1 year
- Kazakhstan’s main oil outlet facilities in Russia got hit reportedly by Ukrainian drones, causing output disruptions
- Swiss trade surplus widened from 3.48B CHF to 6.12B CHF (3.55B CHF forecast) on higher watch exports in January
- German producer price index dipped 0.1% m/m in January (+0.6% forecast, -0.1% previous)
- U.K. CBI industrial order expectations rose from -34 to -28 in Feb (-30 forecast)
- U.S. initial jobless claims at 219K for week ending February 13 (215K expected, 214K forecast)
- U.S. Philly Fed index down from 44.3 to 18.1 in February (19.4 forecast)
- U.S. EIA crude oil inventories at 4.6M barrels (3.2M forecast, 4.1M previous)
- St. Louis Fed President Musalem reiterated upward risks to inflation and insisted on caution before future rate cuts
- Atlanta Fed President Bostic anticipates two rate cuts but warns that outlook could change due to tariffs concerns
- Chicago Fed President Goolsbee expects PCE inflation to be milder than CPI and remains wary of supply shocks from tariffs
- New Zealand trade balance in January: 486M NZD deficit (225M NZD surplus expected, previous reading downgraded to 94M surplus)
- Judo Bank Australia flash manufacturing PMI in February: 50.6 (previous reading upgraded to 50.2); flash services PMI: 51.4 (previous reading upgraded to 51.2)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Financial market volatility was elevated from the get-go, with Treasury yields starting the day on the back foot while gold and bitcoin were on the rise.
Remarks from U.S. Treasury Secretary Scott Bessent on how they “won’t be in a hurry to auction more longer-term securities” alleviated concerns about potential supply pressure in the bond market, leading to a rally in Treasury debt and a corresponding dip in yields.
Meanwhile, crude oil started off on shaky footing then found support from reports of disruptions to Kazakhstan’s oil flows. In addition, reports that the G7 is considering tightening the Russian oil price cap provided upward pressure, along with increased speculation of the OPEC+ delaying its scheduled production hike.
However, the commodity struggled to hold on to its gains when the EIA reported a larger increase of 4.5 million barrels in stockpiles instead of the projected gain of 3.2 million barrels, reviving demand concerns.
Geopolitical tensions and lingering uncertainty with Trump’s tariffs plans pushed gold to close up 0.21% at $2,939.32, approaching the psychologically significant $3,000 level after reaching an intraday high of $2,954.94. In the cryptocurrency space, Bitcoin demonstrated strength, climbing to $98,758 – its highest level since February 14.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Major Currencies Chart by TradingView
The Greenback had a steady downward trajectory in Thursday’s trading sessions, starting off with a notable selloff against the Japanese yen likely on account rising expectations of another BOJ hike later in the year, as reflected in a Reuters poll.
The Dollar Index (DXY) tumbled 0.75% to mark its third-largest drop since November 2024. The Japanese yen and New Zealand dollar led gains against the greenback, appreciating by 0.84% and 0.94% respectively. The Canadian dollar showed more modest gains, with USD/CAD falling 0.38%, while the Australian dollar caught a decent 0.84% gain, drawing additional support from upbeat jobs data.
Fed speakers, including Bostic, Musalem, and Goolsbee, maintained a cautious stance in their public appearances. Notably, Fed’s Bostic projected two rate cuts before year-end, though his colleagues emphasized patience in their approach to monetary policy adjustments.
Mid-tier U.S. data, namely the weekly initial jobless claims and the Philly Fed index, both came in slightly weaker than expected as well.
The forex market’s reaction to Treasury Secretary Bessent’s comments on debt issuance was particularly notable, as it helped drive the broader dollar selloff. The reduced likelihood of aggressive long-term Treasury supply provided support for existing government debt holdings and weighed on the U.S. currency.
Upcoming Potential Catalysts on the Economic Calendar:
- U.K. retail sales at 7:00 am GMT
- French flash manufacturing and services PMI at 8:15 am GMT
- German flash manufacturing and services PMI at 8:30 am GMT
- Eurozone flash manufacturing and services PMI at 9:00 am GMT
- U.K. flash manufacturing and services PMI at 9:30 am GMT
- Canada headline and core retail sales at 1:30 pm GMT
- U.S. flash manufacturing and services PMI at 2:45 pm GMT
- U.S. revised UoM consumer sentiment index at 3:00 pm GMT
- FOMC member Jefferson’s speech at 4:30 pm GMT
- BOC Governor Macklem’s speech at 5:30 pm GMT
It’s global flash PMI day today, which could push major currencies in different directions depending on the outcome of the leading indicators. Canada also has its consumer spending data lined up, likely influencing BOC monetary policy expectations.
Do keep an eye out for central bank speeches, as well as announcements from U.S. President Trump that tend to cause market sentiment swings.
Don’t forget to check out our brand new Forex Correlation Calculator when taking any trades!
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