• Pleased with recent shift in expectations
• Headline disinflation is going quicker than expected but core prices still remain uncertain
• Prefers June rate cut, then „smooth and steady cycle of policy easing“

The odds of an April rate cut are now just at ~37%, with a June rate cut fully priced in. Meanwhile, the total rate cuts priced in for the year is 91 bps. That is quite a drastic shift compared to where we were just two months ago as seen here.

This article was written by Justin Low at www.forexlive.com.

Bitcoin has been rising steadily in February amid a
positive risk sentiment as the central banks ended their tightening cycles and
are now looking for the right moment to start easing their policies. Recession
fears have also dissipated with resilient economic data and even some
reacceleration lately. Moreover, the market is also looking forward to the
halving event set for April.

Bitcoin Technical Analysis
– Daily Timeframe

On the daily chart, we can see that Bitcoin continues
to surge to new highs amid a positive risk sentiment and lots of FOMO. The
price is now a bit overstretched as depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

Bitcoin Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the previous resistance at 52858
where we can also find the confluence with the
trendline and the
daily 21 moving average. The sellers, on the other hand, will want to see the
price breaking below the trendline to invalidate the bullish setup and position
for a drop into the next major trendline around the 45000 level.

Bitcoin Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price bounced on the red 21 moving average today and we can also notice a divergence with
the MACD. This
is generally a sign of weakening momentum often followed by pullbacks or
reversals. The sellers will want to see the price breaking below the black
trendline to pile in and target a drop into the 52858 support. The buyers, on
the other hand, will likely lean on the trendline with a defined risk below it
to target new highs.

Upcoming Events

Tomorrow we will see the US PCE and the latest US
Jobless Claims figures. On Friday, we conclude the week with the US ISM
Manufacturing PMI.

This article was written by FL Contributors at www.forexlive.com.

• Prior -16.1
• Economic confidence 95.4 vs 96.7 expected
• Prior 96.2; revised to 96.1
• Industrial confidence -9.5 vs -9.2 expected
• Prior -9.4; revised to -9.3
• Services confidence 6.0 vs 9.0 expected
• Prior 8.8; revised to 8.4

Euro area economic sentiment worsened in February, with both industrial and services confidence also slipping. That’s not a good take on the look and feel of the economy to start the year thus far. Of note, consumer inflation expectations also increased from 12.0 to 15.5 – which is the highest since March last year. That might present some concerns for the ECB to look at for the months ahead, if the trend persists.

This article was written by Justin Low at www.forexlive.com.

European indices are lower but not seeing as heavy losses as US futures though for now. The DAX is still up 0.1% with the Eurostoxx and CAC 40 both down by only 0.1% so far. But the UK FTSE is down 0.5% while the IBEX is down 0.3% on the day. The main drag though is in US futures, with S&P 500 futures now down 0.5%.

There’s not much news driving the drop as it appears to be selling flows coming in as European traders enter the fray. Nasdaq futures are also marked down by 0.6% while Dow futures are lower by 0.4% currently. So, the selling isn’t just solely tech-related.

If anything, this could relate to some month-end rebalancing flows. Bonds are keeping slightly bid still, with 10-year Treasury yields down 2.4 bps to 4.291% on the day.

As equities stumble, the dollar is still finding itself more bid so far on the session. EUR/USD is now down 0.4% to 1.0798 while GBP/USD is down 0.5% to 1.2625 currently.

This article was written by Justin Low at www.forexlive.com.