Kickstart the FX trading day for March 6 w/a technical look at the EURUSD, USDJPY & GBPUSD

The USD is mixed as North American traders enter for the day. The greenback is the weakest vs the JPY (-0.79%) and the CHF (-0.64%). It is higher vs the GBP (+0.03%), CAD (+0.22%) and AUD (+0.03%).

In the video above, I talk to the current technicals that are guiding the markets for the EURUSD, USDJPY and GBPUSD.

The ECB is expected to cut it’s refinancing rate and deposit rate by 25 basis points to 2.65% and 2.5%, respectively. The focus will be on the future path of rates. The ECB has cut the refinancing rate from 4.5% to the expected 2.65%. As a point of reference, ECBs Lagarde empahisized that

• ECB will maintain a meeting-by-meeting, data-dependent approach without committing to a specific policy path.
• Despite easing, policymakers still view policy as “restrictive.”
• Noted the decision was unanimous.
• There was no discussion of the terminal rate.
• Called discussions on neutral rates “entirely premature”

Yesterday, Trump announced tariff exemption for some automakers for one month as long as they comply with existing free trade rules.

Analysts warn that the tariffs could significantly impact these companies due to their complex North American supply chains. Estimates I have heard is the price of SUVs would rise by $8000.

While the administration is open to considering additional exemptions for other products, officials emphasized that this does not signal a retreat from Trump’s broader trade conflict with Canada, Mexico, and China. The tariffs, according to Trump, are a response to these countries not doing enough to curb the flow of migrants and illegal drugs into the U.S (which means it is at his whim. It is Whack a Mole time.).

In Alberta, they halted US alcohol purchases and will also be looking to divert oil and gas exports to alternative markets in response to the tariffs.

U.S. Challenger layoffs surged in February to 172.02K, a sharp increase from 49.79K in January, marking a 245% year-over-year rise and the highest level since July 2020. The spike was largely driven by federal government layoffs, which accounted for 62,242 job cuts across 17 agencies. Additionally, over 63,000 layoffs were tied to the DOGE initiative, affecting both federal workers and contractors. Yesterday, the ADP – which does not include public/government workers – was weaker than expected at 77K vs 141K estimate. Tomorrow the BLS will release its jobs report with the expectations around 159K and the unemployment rate at 4.0% (unchanged)

The premarket for US stocks are implying lower levels. The futures are currently implying:

• Dow -400 points
• S&P -67 points
• Nasdaq -289 points

Yesterday, the major indices closed higher with:

• Dow, +485.60 points or 1.14%
• S&P up 64.48 points or 1.12%
• Nasdaq up 267.57 points or 1.46%

In the European stocks ahead of the rate decision:

• German Dax, +0.26%. New record
• Frances CAC, -0.58%
• UK FTSE 100, -1.02%
• Spain’s IBex, -0.56%
• Italy’s FTSE MIB, -0.09%

IN the US debt market:

• 2 year 3.934%, -1.2 basis points
• 5 year 4.040%, -1.6 basis points.
• 10 year 4.278%, +1.1 basis points
• 30 year 4.590%, +3.1 basis points

yesterday European 10 year yields soared by 20 to 30 basis points. Today,:

• Germany, +2.9 basis points
• France +3.9 basis points.
• UK +0.2 basis points
• Spain +1.6 basis points
• Italy +3.0 basis points

This article was written by Greg Michalowski at www.forexlive.com.