IC Markets Global – Europe Fundamental Forecast | 19 March 2026
What happened in the Asia session?
Focus on the ongoing Bank of Japan (BOJ) policy meeting, which concludes today (expected to hold rates at 0.75%), amid Middle East tensions, US inflation data influencing sentiment, and persistent oil supply concerns in the Strait of Hormuz. Escalating US-Iran conflicts kept Brent crude above $100/barrel for days, driving volatility. At the same time, gold prices dropped sharply, nearly 3% intraday, to around $4,840/oz on hotter-than-expected US inflation readings, reducing safe-haven demand.
What does it mean for the Europe & US sessions?
Traders should closely monitor today’s key US economic releases and ongoing geopolitical tensions as European and US sessions open. Elevated oil prices stemming from the US-Israel conflict with Iran continue to pressure markets, with recent spikes pushing Brent crude and WTI higher by over 8-11% last week.
The Dollar Index (DXY)
Key news events today
Unemployment Claims (12:30 pm GMT)
Philly Fed Manufacturing Index (12:30 pm GMT)
New Home Sales(2:00 pm GMT)
What can we expect from DXY today?
The US dollar held steady around an index of 99.56 after prior declines, buoyed by safe-haven flows from escalating Middle East conflicts and high oil prices. However, it faced pressure ahead of the Bank of Japan’s meeting and mixed Asian session moves, strengthening versus the won and peso but softening against some peers like the franc amid Fed patience on rates and data-driven volatility.
Central Bank Notes:
- The Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate target range steady at 3.50%–3.75% at its March 17–18, 2026, meeting, amid rising oil prices from the US-Israel war against Iran and persistent inflation pressures, delaying any 2026 cuts potentially to September.
- The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market weakening further as nonfarm payrolls declined by 92,000 in February 2026 and the unemployment rate rose to 4.4% from 4.3% in January.
- Officials face tilted risks from geopolitical tensions, elevated oil prices, and sticky inflation, with CPI steady at 2.4% year-over-year in February 2026, headline PCE at 2.8% in January, and core PCE rising to 3.1%.
- Economic activity has cooled after robust Q4 2025 growth of nearly 5%, with the Atlanta Fed GDPNow now estimating Q1 2026 growth at around 2.1%–2.7% amid softer consumer spending and labour data.
- December 2025’s Summary of Economic Projections forecasts 2025 unemployment at a median of 4.5%, 2026 GDP growth at 2.3%, and core PCE at 2.5%, with the dot plot signalling one more cut in 2026 to a median 3.4% funds rate; March updates may reflect softer labor and inflation upticks.
- The Committee maintains its data-dependent stance amid a softening labor market, inflation above target, and new oil shocks, likely holding rates at 3.50%-3.75% with ongoing divisions and possible hawkish dissents on rate cuts.
- The FOMC continues its adjusted quantitative tightening, with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month to ensure ample reserves post-2025 program adjustments.
- The next meeting is scheduled for 28 to 29 April 2026.
Next 24 Hours Bias
Weak Bullish
Gold (XAU)
Key news events today
Unemployment Claims (12:30 pm GMT)
Philly Fed Manufacturing Index (12:30 pm GMT)
New Home Sales(2:00 pm GMT)
What can we expect from Gold today?
Gold remains range-bound with support at $5,000, reflecting sideways trading below the EMA50 amid technical pressure from a short-term downtrend, yet positive relative strength signals hint at potential volatility. Indian physical demand holds firm, supporting global resilience despite geopolitical boosts waning slightly post-weekend.
Next 24 Hours Bias
Strong Bullish
The Euro (EUR)
Key news events today
Main Refinancing Rate (1:15 pm GMT)
Monetary Policy Statement (1:15 pm GMT)
ECB Press Conference (1:45 pm GMT)
What can we expect from EUR today?
The Euro saw modest gains against the US Dollar today, trading around 1.1518-1.1540 amid mixed global cues. This uptick of about 0.11-0.31% from yesterday reflects profit-taking in the Dollar ahead of key US Nonfarm Payrolls data. However, broader bearish pressures persist from Middle East tensions and elevated oil prices limiting upside.
Central Bank Notes:
- The Governing Council of the ECB is widely expected to keep the three key interest rates unchanged at its 18–19 March 2026 meeting, holding the main refinancing rate at 2.15%, the marginal lending facility at 2.40%, and the deposit facility at 2.00%. This stance continues to support medium-term price stability, with inflation stabilizing near the 2% target amid resilient growth and balanced risks. Market odds show a 99% probability of no change, reflecting caution over global trade uncertainties and US policy under President Trump.
- Price dynamics remain stable close to the 2% target. Headline HICP inflation eased to around 1.7% in January 2026, with base effects and a strong euro supporting further moderation toward 1.9% for the year. Core and services inflation continue to moderate, bolstered by anchored expectations despite some sticky components.
- Updated Eurosystem staff projections for March 2026 are expected to show headline inflation at 1.9% in 2026, 1.8% in 2027, and stabilizing at 2% by 2028, with balanced risks from trade tensions offset by fiscal support. Recent data revisions have slightly raised prior forecasts, but a stronger euro imports deflationary pressures.
- Euro area GDP growth remains resilient, with Q1 2026 surveys pointing to a 0.3-0.4% qoq expansion, aligning with annual forecasts of 1.2-1.4% through 2027. Public investment in defence and infrastructure, alongside low unemployment, underpins activity despite softer consumption and trade headwinds.
- The labour market stays robust, with unemployment holding near 6.4% at historic lows into early 2026, supported by rising participation and real wage growth. Credit conditions remain supportive for household spending and business investment.
- Business sentiment reflects caution from US tariffs and geopolitical risks, tempered by easing supply chains, a weaker euro aiding exports, and fiscal measures boosting domestic investment.
- The Governing Council will continue its data-dependent, meeting-by-meeting approach, closely monitoring inflation trends, transmission, and external uncertainties without signalling a preset path.
- Balance sheet normalization proceeds steadily, with APP and PEPP reinvestments ended and portfolios reducing at a controlled pace, showing no liquidity strains.
The next meeting is on 30 to 31 March 2026
Next 24 Hours Bias
Medium Bearish
The Swiss Franc (CHF)
Key news events today
SNB Monetary Policy Assessment (8:30 am GMT)
SNB Policy Rate (8:30 am GMT)
SNB Press Conference (8:30 am GMT)
What can we expect from CHF today?
Today, the Swiss franc is consolidating after a strong run, with modest weakness versus both the US dollar and the euro as traders factor in the SNB’s heightened readiness to intervene and the dollar’s own safe‑haven appeal in turbulent markets. While underlying geopolitical risk and low Swiss inflation continue to support long‑term demand for CHF as a safe‑haven and structurally‑strong currency, near‑term price action is being tempered by central‑bank signalling and short‑term dollar strength, keeping the franc in a choppy, range‑bound mode ahead of any clearer policy or risk‑regime shift.
Central Bank Notes:
- At its monetary policy assessment on 19 March 2026, the Swiss National Bank (SNB) is widely expected to leave the policy rate unchanged at 0%, continuing the extended pause since September 2025, as the Governing Board assesses current settings as adequate to maintain inflation near the target without resorting to negative rates.
- Inflation data since December indicate persistent weakness, with headline CPI hovering around 0% year-on-year through early 2026 and core measures subdued at roughly 0.4%, underscoring limited price pressures and lingering, though contained, deflation risks.
- The SNB’s updated conditional inflation forecast shows minimal change from December, with averages of about 0.2% in 2025 (now complete), 0.3% in 2026, and 0.6% in 2027 under a steady 0% policy rate. However, recent flat CPI readings may slightly lower near-term expectations, preserving scope for further easing if needed.
- Global conditions remain challenging, marked by U.S. tariff escalations under President Trump, subdued external demand, and uncertainties in major export markets such as Europe and the U.S., prompting the SNB to exercise caution despite resilient Swiss domestic activity.
- Sentiment in manufacturing and export sectors stays soft amid franc appreciation and weaker foreign orders, squeezing margins. Yet, overall GDP growth is expected to be around 1.5% in 2026, with unemployment edging up modestly from historic lows.
- The SNB reaffirms its readiness to intervene via rate cuts or FX operations should deflationary pressures intensify, while emphasizing clear communication through detailed meeting minutes and coordination with global partners on currency matters.
The next meeting is on 18 June 2026.
Next 24 Hours Bias
Medium Bearish
The Pound (GBP)
Key news events today
Claimant Count Change (7:00 am GMT)
Average Earnings Index 3m/y (7:00 am GMT)
Monetary Policy Summary (12:00 pm GMT)
MPC Official Bank Rate Votes (12:00 pm GMT)
Official Bank Rate (12:00 pm GMT)
What can we expect from GBP today?
The Pound is trading with a cautious, slightly softer tone versus the US dollar as markets assess the combined impact of a Fed hold on rates, a more hawkish‑leaning inflation outlook, and what is widely seen as a BoE decision to either hold or deliver only a modest easing move.
Central Bank Notes:
- The Bank of England’s Monetary Policy Committee (MPC) meets on 5 February 2026, with the current Bank Rate at 3.75 per cent following a narrow 5–4 vote to cut by 25 basis points at the 17 December 2025 meeting. Markets now price in around a 70 per cent chance of another 25-basis-point cut to 3.50 per cent, though this hinges on fresh inflation prints and labour data ahead of the decision, positioning this note as pre-meeting guidance. The February meeting will include a Monetary Policy Report with updated forecasts.
- Quantitative tightening (QT) is likely to proceed unchanged, with gilt holdings reductions held at the slower 2025 pace amid ongoing emphasis on gradual balance-sheet normalization calibrated to liquidity conditions. Officials continue to frame the QT path as supportive of a restrictive overall stance.
- Headline CPI inflation stood at 3.6 per cent year-on-year in October 2025, with services pressures easing slowly toward mid-single digits, keeping it well above the 2 per cent target. The MPC’s projections point to inflation hovering near 3 per cent through much of 2026, assuming wage growth moderates further and energy prices stabilize.
- UK growth remains subdued into early 2026, with unemployment edging above 5 per cent on recent three-month averages and regular pay growth cooling to the mid-4 per cent range. These trends signal ongoing labour-market softening, aiding the case for domestic disinflation.
- Global headwinds persist, including tepid world growth and volatile commodities, which could amplify sterling and gilt market swings around the meeting. The MPC views upside shocks to energy or food prices as manageable absent a sustained demand rebound.
- Inflation risks are balanced but tilted: downside from feeble demand and job losses, upside from entrenched services inflation, wage stickiness, and potential labour slack underestimation.
- The MPC enters February with a restrictive but easing-ready posture, favouring data-dependent 25-basis-point steps if disinflation advances, while stressing sustained 2 per cent alignment before deeper cuts. Forward guidance will underscore gradualism, with Governor Bailey likely avoiding firm commitments on pace at the press conference.
- The next meeting is on 19 March 2026.
Next 24 Hours Bias
Medium Bearish
The Canadian Dollar (CAD)
Key news events today
No major news event
What can we expect from GBP today?
The Canadian Dollar maintained a delicate balance amid competing pressures, with no major breaking news. Still, alignment with early March forecasts showed USD/CAD hovering near 1.37, per the five-bank consensus, bolstered by elevated oil prices amid geopolitical risks, yet weighed by softer domestic data such as employment and consumer spending.
Central Bank Notes:
- The Governing Council left the overnight rate target unchanged at 2.25% at its 28 January 2026 meeting, consistent with market expectations and reinforcing the pause in easing after the December hold. The Bank highlighted ongoing global trade uncertainties, including U.S. policy risks, but noted a steadier external environment with no immediate need for policy shifts amid fragile world demand.
- Uncertainty from U.S. tariffs continues to cloud business confidence, yet Canadian manufacturing PMI and export orders have stabilized further, with backlogs modestly increasing despite restrained investment. Recent data indicate that goods exports, particularly energy, have provided ongoing support, though firms remain selective in their expansion plans.
- Canada’s economy maintained momentum into late 2025 and early 2026, with Q4 GDP estimates around 2.0-2.5% annualized following Q3’s 2.6% rebound, driven by crude oil exports, public spending, and a partial service-sector recovery. January flash indicators suggest a balanced start to Q1, though weather disruptions slightly tempered output gains.
- Services activity strengthened, with PMI remaining above 50 and gains spreading to tech, tourism, and professional sectors; however, consumer services remained uneven due to persistent high prices, which curbed non-essential spending despite wage growth. The Bank views this broadening as a sign of structural adjustment progressing.
- Housing markets edged firmer nationally, with resales and prices up modestly in December-January on lower rates and steady demand, though major cities face renewed pressures tempered by strict lending rules and affordability hurdles. The Bank expects this stabilization to persist without overheating.
- CPI inflation held near 2.2% year-over-year in December 2025 and into January 2026 estimates, within the 1-3% band, while core metrics like CPI-median and trim eased toward 2.8%, signalling waning underlying pressures despite shelter and energy volatility. This supports the Bank’s confidence in target convergence.
- Officials reaffirmed the 2.25% rate as appropriate for sustaining 2% inflation and economic adjustment, with no near-term cuts anticipated absent growth or inflation shocks. Focus shifts to Q1 data durability, core trend sustainability, and trade policy clarity.
- The next meeting is on 25 March 2026.
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No major news event
What can we expect from Oil today?
Oil prices remain highly volatile today amid the ongoing US/Israel-Iran conflict, disrupting Middle East supply routes, particularly through the Strait of Hormuz. Crude oil closed at $94.75 per barrel on March 18, down 1.52% daily but up over 42% in the past month, with recent peaks above $100 and $120 driven by a $20/barrel geopolitical risk premium from attacks on vessels.
Next 24 Hours Bias
Strong Bullish
