Morning Note: Swiss Inflation, US Jobs, & Eurozone PPI

Swiss Inflation Expected to Dip Slightly

The Swiss inflation rate for February will be released at 07:30 GMT, and it is expected to be 0.2% year-on-year, down from 0.4% in January. Global energy prices, especially oil and gas, have stayed relatively low compared to last year, reducing fuel and electricity costs. With Switzerland being an energy-importing country, the fall in import prices is thereby pulling down the overall inflation rate.

(USD/CHF Daily Chart, Source: Trading View)

From a technical analysis perspective, the USD/CHF currency pair has been in a bullish trend since the beginning of October 2024, as indicated by the higher highs and higher lows within the ascending channel. However, it formed a significant double-top candlestick pattern at the beginning of February 2025, and bearish pressure started to push the price downward.

Recently, it has broken below the swap zone of 0.8930 – 0.8960. If it fails to close above this zone in the near term, bearish momentum may take control, pushing the price further downward to retest the support level at 0.8770 – 0.8800.

Markets Await U.S. ADP Employment Report

The U.S. ADP Employment Change for February is set to be released at 13:15 GMT, and it is expected to drop to 160K from 183K due to slowing labour market momentum amid tight monetary policy. The Fed's high interest rates have diminished business expansion and hiring, especially in interest-sensitive sectors like housing and finance. Additionally, seasonal factors and a softer demand for labour post-holiday season contribute to the decline.

(U.S. Dollar Index Daily Chart, Source: Trading View)

From a technical analysis perspective, the overall trend of the U.S. Dollar Index has been bullish since the end of September 2024, as indicated by the formation of higher highs and higher lows. However, the index began to decline in early February 2025, marked by a significant double-top candlestick pattern.
Recently, the index has broken below the swap zone at 106.60 – 107.00 with significant bearish momentum and is expected to retest the support zone at 105.00 – 105.40. If this support zone fails to hold the index, bearish forces will likely take control, signalling a trend reversal from bullish to bearish and pushing the index further downward.

Eurozone PPI Data Under the Spotlight

The Eurozone Producer Price Index (PPI) YoY for December was 0%, which is expected to rise to 1.3% in January. This data is set to be released at 10:00 GMT. The expected increase is likely driven by supply chain adjustments and modest industrial demand recovery. Additionally, base effects also play a role, considering that the producer prices dropped in January 2024, making the YoY comparison higher.

(EUR/USD Daily Chart, Source: Trading View)

From a technical analysis perspective, the EUR/USD currency pair has been in a bearish trend since the end of September 2024, as indicated by the formation of lower highs and lower lows. However, it found strong support and rebounded at the beginning of January 2025.
This bullish momentum has persisted, and the pair has broken above the swap zone of 1.0500 – 1.0530. It is now retesting the resistance zone at 1.0600 – 1.0630. If it manages to break above this resistance, it is highly likely to continue surging higher, signalling a trend reversal from bearish to bullish.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.