RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week

Cryptocurrency

Summary:

Bitcoin is attempting to bring the bull market back in full force, but market participants are wary, and even see a return to $76,000 after new all-time highs.

Bitcoin heads into the end of Q1 near two-week highs as trader sentiment diverges from improving technicals.

Bitcoin market participants are positioned for a fresh BTC price dip, which could even form new multimonth lows.

PCE week coincides with the last full trading week of March, and risk assets are showing a hint of optimism.

When it comes to BTC price strength, RSI is increasingly demanding bullish continuation.

Bitcoin’s short-term holders are under pressure amid serious unrealized losses.

Stablecoin stocks on Binance hit record highs in what research hopes is a positive signal for investor confidence.

Bitcoin traders see downside reversal next

Bitcoin is nearing a rematch with two-week highs as the week gets underway, data from Cointelegraph Markets Pro and TradingView shows. RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_1

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_1

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Among traders, however, the mood remains cautious.

Bulls have a lot to do in order to spark a reliable uptrend, they warn, and despite being up nearly 15% versus its multimonth lows from earlier this month, BTC/USD may well see a fresh drop.

“Market sentiment has been restored after hitting the short liquidations at $87.1k. Now, it could be a good opportunity for the MM to shake out the market again,” popular trader CrypNuevo wrote in his latest X analysis.

“We may see a pullback from here over the next 1-2 weeks, a retrace of this recovery.” RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_2

BTC liquidity chart. Source: CrypNuevo/X

CrypNuevo eyed downside liquidity nearer $80,000 as a potentially lucrative target, advising followers to “mind the risk.” RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_3

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_3

BTC/USDT 1-hour chart. Source: CrypNuevo/X

Fellow trading account HTL-NL described the near-term scenario as “not looking good” for bulls, eyeing $90,000 as a ceiling before a reversal kicks in.

Even among its more ardent supporters, the specter of the mid-$70,000 lingers. Arthur Hayes, former CEO of crypto exchange BitMEX, argues that BTC/USD could even advance to new all-time highs of $110,000 before crashing 30%.

“Again I still think we go lower before we make a run back to 88-90k resistance retest,” trader Roman meanwhile added on short timeframes.

Earlier, Cointelegraph reported on several key support trend lines in need of a reclaim as part of any BTC price recovery.

These included the 200-day simple and exponential moving averages, currently at $85,050 and $85,500, respectively. RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_4

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_4

BTC/USD 1-day chart with 200 SMA, 200 EMA. Source: Cointelegraph/TradingView

PCE week comes in the shadow of tariffs

The last full trading week of Q1 2025 gets underway with a hint of relief for risk assets as stocks end a four-week losing streak.

A wild ride for equities since the year began is finally coming to a close, and with it an even more volatile period for Bitcoin and crypto.

That said, more surprises could come before the quarterly candle close.

March 28 is the main date in traders’ diaries this week, hosting the February print of the US Personal Consumption Expenditures (PCE) index.

Known to be the Federal Reserve’s “preferred” inflation gauge, PCE came in below expectations last month, with the upcoming numbers broadly expected to be identical.

Citing the Fed’s own estimates, financial market research firm Bespoke saw positive developments for risk-on sentiment developing.

“The Fed's inflation model currently estimates that headline and core for both CPI and PCE will all have 2-handles by March,” it observed last week.

“Makes room for further cuts.” RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_5

Fed target rate probabilities for June FOMC meeting. Source: CME Group

The latest estimates from CME Group’s FedWatch Tool meanwhile show market odds for interest rate cuts unchanged, with the June meeting of the Federal Open Market Committee (FOMC) as the likely timeframe for financial conditions to ease.

The US government’s reciprocal tariff arrangement, due to go live on April 2, could temper any optimism.

At a press conference following the latest FOMC meeting last week, Fed Chair Jerome Powell cited tariffs as a “driving factor” in increasing inflation expectations.

“You may have seen that goods inflation moved up pretty significantly in the first two months of the year. Trying to track that back to actual tariff increases, given what was tariff and what was not, very, very challenging. So, some of it,” he said.

“The answer is clearly some of it, a good part of it is coming from tariffs.”

RSI signals tease key BTC price breakouts

When it comes to early bull market continuation signals, Bitcoin is currently enjoying several classics at once.

These all hinge on the relative strength index (RSI), a key momentum indicator that is in the process of breaking out across both long and short timeframes.

Market observers are keenly eyeing bullish divergences on RSI, which on weekly timeframes is abandoning a downtrend in place since November 2024.

Originally spotted by trader and analyst Rekt Capital last week, the process is continuing, with RSI seeking to confirm the downtrend line as support before heading higher.

“The Daily RSI is showcasing early signs of retesting the Downtrend dating back to November 2024 as new support,” Rekt Capital wrote in his latest update on the topic. RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_6

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_6

BTC/USD 1-day chart with RSI data. Source: Rekt Capital/X

As reported by fellow analyst Matthew Hyland, BTC/USD has now confirmed a bullish divergence on the weekly chart for the first time since September last year. RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_7

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_7

BTC/USD 1-week chart with RSI data. Source: Matthew Hyland/X

Daily RSI meanwhile measured 51.4 at the time of writing — above its key midpoint and fighting to hit new two-month highs.

Bitcoin speculators face a profit waiting game

Bitcoin’s short-term holders (STHs) — newcomer entities hodling coins for up to six months — are “under increasing pressure,” onchain analytics firm Glassnode warned.

In its latest analysis on X, Glassnode showed substantial unrealized losses among the STH cohort, one traditionally more sensitive to short-term BTC price volatility.

“Unrealized losses have surged, pushing many STH coins underwater, nearing the +2σ threshold,” it noted alongside a chart that applies standard deviation to the performance of their holdings. RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_8

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_8

Bitcoin STH unrealized loss. Source: Glassnode/X

As Cointelegraph reported, recent trips to multimonth lows for BTC/USD have been accompanied by significant panic selling by these newer investors, with many choosing to exit their positions at a loss.

Zooming out, however, Glassnode observes that compared to historical extremes, current loss-making sales barely compete.

“The rolling 30-day realized loss for Bitcoin's STHs has reached $7B, marking the largest sustained loss event of this cycle,” it continued.

“However, this remains well below prior capitulation events, such as the $19.8B and $20.7B losses in 2021-22.” RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_9

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_9

Bitcoin STH rolling 30-day realized loss. Source: Glassnode/X

Stablecoin reserves offer glimmer of hope

Further data points to a return of investor confidence in the largest crypto exchange, Binance.

As highlighted by onchain analytics platform CryptoQuant, the total ERC-20 standard stablecoin reserves on the exchange hit new all-time highs above $31.8 billion on March 21.

“Binance remains the exchange with the highest trading volumes, making this a significant development,” contributor Darkfost wrote in one of its “Quicktake” blog posts on March 23.

“There are several factors behind this increase, but the most important one is likely that investors on Binance remain confident and are preparing to enter, or re-enter, the market.” RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_10

RSI Breaks 4-Month Downtrend: 5 Things to Know in Bitcoin This Week_10

Binance ERC-20 stablecoin reserve. Source: CryptoQuant

Darkfost acknowledged that Binance may be the source of additional liquidity as it prepares for a potential uptick in activity.

“Nonetheless, seeing these stablecoins remain on Binance is generally a positive signal for the market,” he concluded.

Source: Cointelegraph

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Warren Takunda

Economic

Helping the UK currency higher is an above-consensus PMI reading, which suggests the economy is performing better than many had expected ahead of a rise in business tax and costs due to be implemented in April.

The Pound-to-Euro exchange rate extended a gain to 1.1960 after S&P Global's services PMI rose to 53.2, easily beating estimates for 51.2 and marking a notable uptick from February's 51.

Manufacturing is, nevertheless, in trouble, with the Manufacturing PMI slumping to 44.6 from 46.9.

However, because manufacturing now represents a small portion of the broader economy, the composite PMI, which gives a sector-adjust reading, read at 52. This is a marked increase on February's 50.5 and is the biggest rise in six months.

“An upturn in business activity in March brings some good news for the government ahead of the Chancellor’s Spring Statement,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. “However, one good PMI doesn’t signal a recovery. The economy is eking out modest growth, with employment still falling and confidence close to two-year lows.”

Employment across the private sector fell for the sixth straight month, though at a slower pace. Companies pointed to restructuring, rising payroll costs, and automation as key factors behind ongoing job shedding - especially in manufacturing.

The UK will witness a significant rise in employment taxes in April as National Insurance contributions rise. A rise in the minimum wage will also raise the cost of employment.

Cost pressures eased slightly in March, though input price inflation remained elevated compared to historical norms. Wage-related costs drove a steeper rise in service sector inputs, while manufacturers reported rising raw material prices, particularly in metals.

Output prices remained high across the board. While services inflation cooled slightly, factory gate prices rose at the fastest rate since April 2023, with businesses preparing for April’s increases in National Insurance contributions and the National Minimum Wage.

Looking ahead, business sentiment remained subdued. Manufacturers reported the weakest confidence levels since November 2022, largely due to global market volatility and tariff concerns. Service sector optimism improved modestly on expectations for organic growth and demand in consumer-facing industries.

The March PMI data suggests that UK GDP is likely to expand by just 0.1% in the first quarter of 2025.

“Worryingly, these headwinds are likely to grow in force,” Williamson added, pointing to fiscal tightening and the upcoming 2 April review of US tariff policy.

Source: Poundsterlinglive

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Michelle

Economic

Stocks

Investing.com - A weaker dollar and stabilizing earnings revisions for the so-called "Magnificent 7" group of mega-cap tech companies could drive a rally in U.S. stocks, according to analysts at Morgan Stanley.

The benchmark S&P 500 has slid by more than 3% so far this year, as investors have fretted about elevated valuations and indications that President Donald Trump’s tariff plans could dent over economic activity. The slide also briefly brought the index down to correction territory, defined as a 10% or more decline from a recent peak.

At the same time, equities in Europe have outperformed, with traders enticed by cheaper valuations and hopes for increased spending pushes by regional governments.

In a note to clients on Monday, the Morgan Stanley analysts led by Michael Wilson flagged that the relative underperformance on Wall Street has partly been tied to quarterly corporate returns being weighed down a stronger dollar.

But the brokerage said this trend "may now be shifting" as the dollar is down 5% since touching highs in January.

"This should offer a tailwind for US revisions and is one reason we think relative performance versus international developed equities can swing back in favor of the US in the near-to-intermediate term," the analysts said.

Earnings revisions at Magnificent 7 stocks -- which include big-name tech players like Amazon (NASDAQ:AMZN), Facebook-parent Meta Platforms (NASDAQ:META) and Google-owner Alphabet (NASDAQ:GOOGL) -- also "look like they may be bottoming, which could support a rotation back to the U.S.," the analysts added.

These dynamics, along with a falling 10-year U.S. bond yield and oversold positioning, continue to support the potential for a "tradeable rally" in the near term in the S&P 500 from a level of around 5,500.

On Friday, the average inched up by 0.1% to 5,667.56 after Trump said there could be some flexibility in his tariff stance, raising expectations that sweeping levies due to come into effect on April 2 may not be as severe as initially thought.

"[W]e are watching [...] labor [market] data, [purchasing managers’ indexes], and earnings revisions carefully as signposts for a more durable rally," the analysts said.

Source: Investing

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Glendon

Cryptocurrency

Just when the crypto sphere started buzzing about a potential Bitcoin resurgence, a new data point has emerged, painting a slightly different picture. While Bitcoin’s price has shown signs of recovery, the enthusiasm among short-term investors appears to be conspicuously absent. Is this a temporary lull or a sign of deeper market hesitation? Let’s delve into the latest insights from IntoTheBlock to understand why, despite the encouraging price movement, short-term Bitcoin investors are still playing it cool.

Decoding the Data: Why Aren’t Short-Term Bitcoin Investors Jumping Back In?

According to a recent X post by IntoTheBlock, the number of addresses holding Bitcoin for less than a month has actually decreased. This might seem counterintuitive given the recent price uptick, but it reveals a crucial aspect of the current crypto market dynamics. Let’s break down the numbers:

January Peak: Short-term Bitcoin holder addresses stood at approximately 3.06 million.
Current Scenario: This number has dwindled to around 2.53 million.
The Missing Millions: That’s a significant drop of over half a million addresses, indicating a lack of renewed interest from those typically engaging in quick trades.

This data point is significant because an increase in short-term holder addresses usually signals a fresh wave of optimism and speculative buying. The current decrease suggests that a large segment of the market remains unconvinced by the recent price rebound.

What Does This Caution Mean for the Bitcoin Market?

The reluctance of short-term investors to re-enter the market, even with a price recovery, could be indicative of several factors. Understanding these can provide valuable insights into the current state and potential future trajectory of Bitcoin.

Possible Reasons Behind Investor Hesitation:

Lingering Market Uncertainty: Despite the rebound, the broader economic landscape remains uncertain. Factors like inflation, interest rate hikes, and geopolitical tensions can easily dampen investor spirits.
Past Market Volatility: The crypto market is notorious for its volatility. Short-term investors, often more sensitive to price swings, might be wary of another sudden downturn, remembering previous market corrections.
Profit Booking and Sideline Strategy: Some short-term holders might have booked profits during the initial rebound and are now waiting for a clearer direction or a more pronounced upward trend before re-entering. They could be adopting a ‘wait-and-see’ approach.
Alternative Investment Opportunities: Investors might be exploring other asset classes or crypto opportunities that seem more promising or less risky in the current environment.

Market Sentiment: Is the Rebound Just a Temporary Bump?

The term market sentiment is crucial in understanding investor behavior, especially in the volatile crypto space. It essentially reflects the overall attitude of investors towards a particular asset or market. In this case, the data suggests that the prevailing market sentiment among short-term Bitcoin holders is still leaning towards caution, not exuberance.

Key aspects of current market sentiment:

Fear of Missing Out (FOMO) is Absent: Typically, a strong price rebound would trigger FOMO among short-term traders, leading to a rapid influx of new investments. The current data suggests this isn’t happening to the usual extent.
Focus on Long-Term Fundamentals: The cautious approach from short-term investors might indicate a broader shift towards valuing long-term fundamentals over short-term price action. Investors may be looking for more sustained growth indicators before committing heavily.
Data-Driven Decision Making: The analysis from IntoTheBlock itself highlights the increasing reliance on data and on-chain metrics for making investment decisions. Investors are becoming more sophisticated and less driven by hype alone.

Navigating the Crypto Market: Actionable Insights for Investors

So, what does this mean for you as a crypto enthusiast or investor? Here are some actionable insights based on the current market sentiment and data:

Exercise Prudence: The cautious stance of short-term investors serves as a reminder to approach the market with prudence. Avoid impulsive decisions based solely on short-term price movements.
Focus on Due Diligence: Now, more than ever, thorough research and due diligence are essential. Understand the fundamentals of Bitcoin and other cryptocurrencies before investing.
Monitor On-Chain Data: Keep an eye on on-chain metrics like those provided by IntoTheBlock. They offer valuable insights into market trends and investor behavior beyond just price charts.
Diversification Strategy: Consider diversifying your crypto portfolio to mitigate risks associated with the volatility of a single asset like Bitcoin.
Long-Term Perspective: Adopting a long-term investment perspective can help weather short-term market fluctuations and benefit from the potential long-term growth of the crypto market.

Conclusion: A Measured Rebound in a Cautious Crypto Market

The Bitcoin price rebound is undoubtedly a positive sign, but the data revealing continued caution among short-term investors offers a more nuanced perspective. It suggests that while the market is showing signs of recovery, a full-fledged return of exuberant bullish sentiment is yet to materialize. This period of measured rebound and investor caution could actually be healthy, paving the way for more sustainable and fundamentally driven growth in the long run. For investors, this means staying informed, being patient, and making strategic decisions rather than chasing fleeting market rallies.

Source: CryptoSlate

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Warren Takunda

Stocks

It's too soon to say "Salud" but the week begins with somewhat conciliatory messages from U.S. President Donald Trump on tariffs, coming right after the Fed's cheery assessment of the economy.

The S&P 500 , futures are up after a light gain on Friday when Trump hinted at flexibility. But after a roller-coaster first two months in power - including tariff hits on China, Mexico and Canada - traders are shy about betting that Trump is ready to cut deals.

Trump said that he planned to speak with Chinese President Xi Jinping and that the U.S. trade chief would speak with his Chinese counterpart this week.

U.S. Republican Senator Steve Daines and heads of several foreign firms including Apple and Pfizer met Chinese Vice Premier He Lifeng on Sunday and were assured of the country's business potential.

Monday will see the release of global purchasing managers index (PMI) gauges, probably validating the sudden fiscal policy-spurred impetus for the German, French and other European economies.

And, in weekend news, Bloomberg reported that the U.S. hopes to reach a Russia-Ukraine truce agreement by April 20, while Trump said efforts to temper the conflict were "somewhat under control".

Yet, despite all that, markets remain hung up on Trump's proposed reciprocal tariffs on trading partner countries.

By latest accounts, tariffs are imminent and effective immediately, particularly on the 15% of countries that have the highest tariffs and large trading volumes with the U.S., which Treasury Secretary Scott Bessent refers to as the "Dirty 15".

The European Union is in a placatory mood and has delayed its first counter-measures against the United States until mid-April.

I would say as an investor in today's market, what we're looking at is really trying to grasp the higher costs of doing business today.

That means the 50% tariffs on U.S. bourbon, wine, toilet paper and other goods are under review.

France and Italy, the largest exporters of wine to the United States, are keen to avoid a trade war, as is Prime Minister Micheal Martin of whiskey-exporter Ireland, who was pleased Europe has decided to "wisely and strategically respond".

Besides PMIs, the rest of the week holds the U.S. Federal Reserve's preferred inflation reading, inflation data in Australia and Japan, a budget update in Britain and major earnings in China.

Fed officials said last week the U.S. economy was strong but backed a cautious policy approach due to economic uncertainty.

In emerging markets, Turkey's lira is on a knife's edge as the jailing of President Tayyip Erdogan's main rival unsettles investors.

Key developments that could influence markets on Monday:

SPEAKERS: Fed Governor Michael Barr, Bank of England Governor Andrew Bailey

EARNINGS: Hargreaves Lansdown PLC, Travis Perkins PLC

DATA: Flash PMIs for France, Germany, UK, Euro Zone

DEBT AUCTIONS: France - reopening of 3-month, 6-month and 1-year auctions, Germany -reopening of 3-month and 9-month government debt auctions

Source: Reuters

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Warren Takunda

Economic

The Pound-to-Dollar exchange rate is in an uptrend that appears to have reached a temporary peak that will allow for consolidation into the all-important April 02 tariff announcements.

The pair rallied to as high as 1.3014 last week, but ultimately, a break above 1.30 was not to be, confirming the strength of selling interest layered around this resistance zone.

With the bulls unable to punch through the ceiling, a pullback ensued, albeit one that is shallow and consistent with a consolidative phase as opposed to a trend-turn lower.

"GBPUSD was pushed higher by the broader sentiment boost toward European assets and has been testing the 1.30 resistance mark in recent days. While we do not rule out a breaking of the line, we think this will only happen later in the year," says Dominic Schnider, a strategist at UBS.

This is the theme we are looking at in the coming days: further consolidative action, with scope for weakness to 1.2865 and then 1.28.

However, the trend higher should ultimately resume and a break above 1.30 would transpire at some point in April.

Pound-to-Dollar Week Ahead Forecast: Rally Looking to Reboot_1

Above: GBP/USD at daily intervals.

For FX markets, U.S. tariffs remain the overarching theme, with the focus now firmly on the April 02 announcements, which will be the biggest of Trump's second administration.

The existing theme is that tariffs are proving a negative for the U.S. economy and the U.S. Dollar, which is why there is a sense GBP/USD can extend higher as these tariff decisions come through and are implemented.

However, a word of caution: "We maintain our forecasts for a USD rebound in Q2," says Daniel Tobon, a currency analyst at Citi. "Tariff risks look underpriced and we expect USD undervaluation to correct on a hawkish April 2 announcement."

If Citi are correct, we could be in for another big surprise, whereby tariffs start to play positive for the Dollar again.

We think, therefore, that the current consolidation in GBP/USD and other Dollar exchange rates is symptomatic of any building uncertainty around April 02.

Turning to the calendar, the UK offers up some idiosyncratic interest for Pound Sterling this week.

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

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Warren Takunda

Economic

Last week, global stock markets came under pressure as major central banks expressed concerns over growth and inflation, driven by Trump’s tariffs. Investors will now turn their attention to manufacturing and services Purchasing Managers’ Indexes (PMIs) for insights into the economic trajectory. Additionally, the EU summit on Ukraine aid and the bloc’s role in peace negotiations will be a key event for European equities.

Inflation data from Australia, the UK, Japan, and several European economies will also be closely watched as the global trade war intensifies.

Flash PMIs from the EU, UK, and US

A series of flash manufacturing and services PMIs for March from major economies will be released by S&P Global on Monday. These indices provide key insights into economic health by measuring activity across sectors based on new orders, employment, and business confidence. A reading above 50 signals expansion, while a figure below 50 suggests contraction.

Since Russia’s invasion of Ukraine in 2022, surging energy prices have fuelled inflation and led to rapidly rising interest rates, significantly slowing global manufacturing activity.

The EU has been particularly impacted by macroeconomic headwinds, with its manufacturing sector in decline since mid-2022.

In February, the eurozone’s manufacturing PMI improved to 47.6 from 46.6 in January, marking the mildest contraction since early 2023. Germany, France, Italy, and Austria all recorded a slower pace of decline, while business confidence rose to a three-year high, likely due to falling interest rates and China’s economic recovery.

However, Trump’s recently imposed 25% tariffs on steel and aluminium imports could place fresh pressure on the sector. This week, the focus will be on data from Germany and France, where February’s manufacturing PMIs were revised higher to 46.5 and 45.8, respectively, though both remained in deep contraction. The data is expected to show further improvement in March.

Conversely, the eurozone’s services PMI has been expanding for three consecutive months, though growth slowed in February as new business fell. The index stood at 50.6 last month, down from 51.3 in January.

In France, the services PMI contracted for a sixth straight month, with output constrained by weak demand, shrinking customer bases, and broader economic fragility.

In contrast, Germany’s services sector expanded for a third consecutive month. Consensus forecasts suggest German services PMI will rise further to 52.3 in March.

In the UK, February’s manufacturing PMI remained in contraction at 46.9 for the fifth consecutive month, with March’s data expected at 47.3. Meanwhile, services PMI edged up to 51, staying below 52 for the past four months as firms curtailed spending and investment due to economic uncertainty. The services index is expected to remain in modest expansion.

In the US, manufacturing PMI climbed to 52.7 in February, reflecting accelerated growth partly due to “advanced purchases in anticipation of potential price increases and supply disruptions linked to expected tariff impositions.” However, services PMI fell sharply to 51 from 52.9 in January, weighed down by economic uncertainty. Market forecasts place March’s manufacturing and services PMIs at 51.9 and 51.2, respectively.

Inflation data from the US, UK, and Europe

Key inflation data this week includes the US Personal Consumption Expenditures (PCE) index, the UK and Australia’s monthly Consumer Price Index (CPI), Japan’s Tokyo core CPI, and preliminary CPI figures from France and Spain.

The US PCE, the Federal Reserve’s preferred inflation gauge, is critical for monetary policy decisions. In January, core PCE slowed to 2.6% year-on-year, down from 2.9% in December.

However, the Fed raised its median core PCE forecast for 2025 to 2.8% from 2.5%, citing “increased uncertainty around the economic outlook.” Despite this, Fed Chair Powell described tariff-driven inflation as “transitory” and downplayed recession risks. A higher-than-expected reading could sustain pressure on US stock markets and fuel further sell-offs.

In the UK, inflation accelerated to 3% in January, the highest since March 2024, prompting the Bank of England to maintain its policy rate at 4.5% last week. Annual inflation is expected to cool slightly to 2.9% in February. Investors will also scrutinise the UK government’s budget plan, set to be released on Wednesday.

Spain’s annual inflation is projected to ease to 2.7% in March from 3% in February—the highest level since June. By contrast, France’s inflation was confirmed at 0.8% in February, the lowest in four years, with expectations of a slight increase this month.