Elite Research | 15.03.2025

Australian Dollar (AUD) Outlook

Central Bank Policy (RBA)

• The Reserve Bank of Australia (RBA) remains cautious in its approach to monetary easing. While other central banks are moving towards rate cuts, the RBA is expected to hold off longer than most due to still-tight labor market conditions and stubborn inflation.
• The RBA is forecasting an average unemployment rate of 4.2% in H1 2025, which will be a key benchmark for monetary policy decisions.
• The central bank is expected to maintain its current stance, with its Chief Economist and Assistant Governor reiterating a "reluctant rate cutter" position in an upcoming speech.

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Economic Growth

• Employment conditions are slowing from the strong growth observed in the past two months, but not enough to trigger an immediate increase in unemployment.
• The labor market remains resilient, but weakening job advertisements and employment intentions suggest a potential deceleration in hiring.
• China's economic data, particularly cyclical indicators around the Lunar New Year period, will be important for the AUD, as China remains a key trading partner.

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Market Sentiment

• The AUD remains highly correlated with risk sentiment and is currently range-bound due to uncertainty surrounding global trade policies.
• US retail sales data is expected to be a key driver for risk appetite, which will influence AUD performance.
• US fiscal and trade policies under President Trump are adding to uncertainty, with tariff discussions playing a major role in shaping market sentiment.

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Geopolitics & Trade

• Trade tensions between the US and China remain a significant risk factor for the AUD. If Trump announces fresh tariffs on trading partners, it could weigh on risk sentiment and hurt the AUD.
• The US administration’s policies, including potential tariffs on Australian exports, remain an ongoing concern.

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Short-to-Medium-Term Outlook

• Short-term: The AUD is expected to remain in a tight range, supported by relative rates and domestic economic resilience but weighed down by global risk sentiment.
• Medium-term: As the Federal Reserve potentially cuts rates later in 2025, the AUD could find some upside, particularly if RBA remains more hawkish than the market expects.
• Long-term: The RBA's reluctance to cut rates aggressively may provide a relative yield advantage, supporting the AUD against lower-yielding currencies.

Overall, while the AUD remains vulnerable to global risk sentiment, its fundamental outlook is more stable compared to other G10 currencies due to the RBA’s cautious stance and resilient domestic growth.

Canadian Dollar (CAD) Outlook

Central Bank Policy (BoC)

• The Bank of Canada (BoC) recently cut rates to 2.75% but refrained from giving forward guidance due to heightened economic uncertainty.
• Inflationary risks remain a concern, and the central bank is expected to be cautious with further rate cuts, potentially limiting policy easing to one more cut in 2025.
• Despite the rate cut, the CAD was largely unaffected, as markets had already priced in the decision.

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Economic Growth

• The Canadian economy is facing increasing headwinds, particularly due to the ongoing trade tensions with the US.
• Domestic growth remains weak, and while inflation remains contained, tariffs on Canadian exports have created additional uncertainty.
• Retail sales data for February is due soon, but markets expect it to show a slowdown due to rising consumer caution amid trade uncertainty.

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Market Sentiment

• The US-Canada trade war has escalated, with both countries imposing retaliatory tariffs, increasing risk premiums for the CAD.
• The USD/CAD pair continues to hover around 1.44, reflecting uncertainty about whether the US or Canadian economy will be hit harder by trade tensions.
• Market volatility remains relatively contained, as options markets suggest a more moderate view on the long-term impact of trade conflicts.

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Geopolitics & Trade

• The US administration has imposed new tariffs on Canadian steel and aluminum, prompting Canada to retaliate with counter-levies on $30 billion of US goods.
• Ontario briefly proposed a 25% price surcharge on electricity exports to the US, but this measure was quickly rescinded after a backlash.
• A further US tariff review is expected in early April, which could introduce additional volatility for the CAD.

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Short-to-Medium-Term Outlook

• Short-term: The BoC's recent rate cut has not significantly weakened the CAD, but further cuts remain a risk factor.
• Medium-term: The USD/CAD pair is likely to trade above 1.45 in Q2 2025, reflecting continued US economic resilience and trade-related uncertainty.
• Long-term: As trade tensions stabilize and the BoC pauses further rate cuts, the CAD may gradually recover, with USD/CAD potentially declining toward 1.40 in the second half of 2025.

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Conclusion

The Canadian dollar remains vulnerable to trade tensions with the US, and while the BoC has adopted a more dovish stance, inflation risks could limit further cuts. The outlook remains cautious, with short-term pressures likely keeping USD/CAD elevated before potential stabilization later in the year.

Swiss Franc (CHF) Outlook

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Central Bank Policy (SNB)

• The Swiss National Bank (SNB) is expected to cut rates to 0.25% this month, in response to cooling inflation.
• Market expectations suggest this will be the final cut in the SNB’s easing cycle, as inflation is now close to zero.
• The SNB has remained relatively neutral in global trade tensions, but Switzerland was recently blacklisted by the US for unfair trade practices, which could introduce some policy uncertainty.

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Economic Growth

• Switzerland’s economic growth remains stable but slow, with GDP forecasts for 2025 at 1.3%.
• Fiscal spending in Germany and broader Eurozone stimulus efforts may have indirect benefits for the Swiss economy, particularly through trade and investment linkages.
• The Eurozone’s economic re-rating means the SNB has less need to further ease policy aggressively, potentially supporting CHF stability.

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Market Sentiment

• The CHF continues to function as a safe-haven currency, but its reaction to global risk sentiment has been more muted recently.
• The EUR/CHF pair has climbed to an eight-month high, suggesting CHF is losing some of its recent strength against the Euro.
• USD/CHF has dropped to three-month lows, as the market digests weaker US economic data and falling US yields.

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Geopolitics & Trade

• The Swiss government has stayed neutral in the ongoing global trade conflicts, including US tariffs on European and Asian economies.
• Switzerland’s trade balance remains positive, though export growth could slow if global demand weakens further.

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Short-to-Medium-Term Outlook

• Short-term: The CHF is expected to remain on the backburner, as long as global risk sentiment does not deteriorate further.
• Medium-term: With the SNB likely to finish its rate-cutting cycle, the CHF could gradually become more attractive as a funding currency.
• Long-term: The EUR/CHF pair may continue to drift higher if Eurozone growth improves further and fiscal stimulus remains strong.

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Conclusion

The Swiss Franc’s appeal as a safe-haven currency remains intact, but further SNB easing and improving Eurozone economic conditions may limit its upside. The CHF could increasingly be used as a funding currency, especially if global uncertainties subside. However, should global risk aversion return, CHF could quickly regain strength.

Euro (EUR) Outlook

‍Central Bank Policy (ECB)

• The European Central Bank (ECB) is expected to keep rates elevated at 2.25%, with markets now pricing in a terminal rate above current expectations.
• Fiscal spending in Germany and other Eurozone nations is expected to alter the ECB’s easing trajectory, delaying potential cuts as inflation risks remain present.
• The ECB’s approach contrasts with the Federal Reserve’s more aggressive rate-cutting stance, which could help the EUR strengthen against the USD.

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Economic Growth

• Germany has announced a EUR 500 billion fiscal stimulus, aimed at infrastructure development and defense spending. This is expected to boost Eurozone GDP growth over the next 12 months.
• The broader Eurozone economy is expected to expand by 1.0% in 2025, with positive spillover effects from Germany's fiscal plans.
• Despite these fiscal efforts, higher government borrowing could impact credit outlooks for some EU nations, particularly if growth fails to materialize as expected.

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Market Sentiment

• The EUR has rallied on the back of stronger European growth expectations, but concerns remain over potential headwinds.
• The unwinding of EUR short positions in FX markets and portfolio rebalancing in global equities have supported the currency.
• US tariffs on European goods, set to be introduced in April, could weigh on sentiment and put downward pressure on the EUR.

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Geopolitics & Trade

• A potential trade war with the US remains a key risk, particularly as the Biden administration looks to address trade imbalances with the Eurozone.
• A ceasefire in Ukraine could provide additional tailwinds for the EUR by boosting European market confidence and lowering energy costs.
• Rising government debt levels in Europe could limit fiscal maneuverability, which may impact investor sentiment toward the currency.

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Short-to-Medium-Term Outlook

• Short-term: The EUR/USD pair is expected to trade within the 1.05-1.10 range, with near-term risks skewed to the downside due to trade uncertainties.
• Medium-term: The EUR is likely to appreciate, especially if fiscal stimulus is implemented effectively and the ECB remains relatively more hawkish than the Fed.
• Long-term: As the Eurozone economy stabilizes and trade risks subside, the EUR/USD pair could gradually move toward 1.12-1.15 in 2026.

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Conclusion

The EUR is benefiting from improved growth expectations and fiscal stimulus in Germany, but trade risks with the US and uncertainty around ECB rate cuts could limit upside potential. The EUR/USD outlook remains positive over the medium term, particularly as the Fed moves toward rate cuts while the ECB stays cautious.

Oil Market Outlook

OPEC Policy & Supply Dynamics

• OPEC+ has maintained production cuts, with output capped at 40.5 million barrels per day (mbpd) for the first half of 2025.
• Saudi Arabia and Russia have extended their voluntary production cuts through Q2, keeping Brent prices supported.
• OPEC’s latest forecast indicates a supply deficit by mid-2025, as demand picks up while supply remains constrained.

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Global Demand & Economic Growth

• China's demand is recovering, with refinery runs increasing amid strong gasoline and diesel consumption.
• US economic growth concerns persist, but domestic refinery utilization rates remain high, supporting crude demand.
• The IEA revised its global oil demand growth forecast up by 200,000 barrels per day (bpd) for 2025, citing improving macro conditions.

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Geopolitical Risks

• Middle East tensions continue to pose upside risks, particularly around the Strait of Hormuz.
• US-Iran relations remain tense, raising concerns about potential disruptions to Persian Gulf exports.
• The Russia-Ukraine war remains a wildcard, with further sanctions on Russian oil possibly tightening global supply.

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Market Sentiment & Price Forecast

• Brent crude is expected to trade between $88–$94 per barrel through Q2 2025.
• WTI crude is projected to stay in the $83–$90 per barrel range, supported by supply constraints and steady demand.
• Hedge funds have increased their long positions in oil futures, suggesting expectations for higher prices.

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Short-to-Medium-Term Outlook

• Short-term: Oil prices should remain supported by OPEC+ cuts and demand resilience in China and India.
• Medium-term: Potential Fed rate cuts could weaken the USD, making oil more attractive for foreign buyers and supporting prices.
• Long-term: Structural underinvestment in oil production could drive persistent supply tightness, keeping prices elevated into 2026.

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Conclusion

Oil markets are well-supported by OPEC+ supply management, resilient demand, and geopolitical risks. While macro uncertainties remain, the short-to-medium-term outlook favors higher prices, particularly as monetary easing in major economies could support global demand.

Natural Gas Market Outlook

Supply & Production

• US natural gas production remains at record levels, with daily output averaging 101 Bcf in Q1 2025.
• LNG exports continue to rise, particularly to Europe and Asia, as demand for non-Russian gas remains strong.
• Qatar and Australia have expanded LNG output, which could put pressure on US LNG market share in Asia.

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Global Demand & Economic Growth

• European storage levels remain high, following a mild winter, reducing immediate demand pressure.
• China’s industrial demand for LNG has picked up, particularly in the manufacturing sector.
• The IEA projects global gas demand growth at 2.1% in 2025, supported by economic recovery in emerging markets.

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Geopolitical Risks

• Ongoing tensions between Russia and Ukraine have led to continued disruptions in Russian gas supplies, prompting higher reliance on US and Qatari LNG.
• US-China trade relations remain a risk, as potential tariffs on energy exports could impact LNG demand from China.
• Middle East instability could disrupt LNG shipping routes, particularly if tensions escalate in the Persian Gulf.

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Market Sentiment & Price Forecast

• US Henry Hub prices are expected to range between $2.50–$3.20/MMBtu in Q2 2025, reflecting high supply and moderate demand.
• European TTF gas prices are forecast to trade around €28–€32/MWh, supported by steady LNG imports and stable storage levels.
• Asian LNG spot prices are projected to hover between $12–$14/MMBtu, depending on Chinese demand recovery.

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Short-to-Medium-Term Outlook

• Short-term: Mild weather and high storage levels are keeping prices in check, with limited upside in the near term.
• Medium-term: Potential US rate cuts could weaken the USD, making LNG imports cheaper for Asian and European buyers, supporting demand.
• Long-term: Structural demand growth in Asia and declining domestic production in Europe could keep LNG prices supported, particularly as nuclear and coal phase-outs increase reliance on gas.

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Conclusion

Natural gas markets remain well-supplied, with strong US LNG exports and robust production levels keeping prices contained. However, geopolitical risks and shifting demand dynamics in China and Europe could drive volatility, making global trade flows and policy decisions key factors to watch in 2025.

Gold Market Outlook

Market Drivers

• Gold has surged past $3,000/oz for the first time, driven by safe-haven demand amid escalating trade tensions and rising geopolitical risks.
• US President Donald Trump's latest tariff threats, including a 200% tariff on European wine and 25% tariffs on steel and aluminum, have fueled inflation concerns and boosted gold's appeal as a hedge against economic uncertainty.
• Central bank gold purchases have remained strong, with over 1,045 tonnes acquired last year, accounting for approximately 20% of total gold demand. More buying from central banks is expected, further supporting prices.

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Monetary Policy & Inflation Impact

• The Federal Reserve remains cautious on rate cuts, with only two reductions expected in 2025, which could keep real yields supportive of gold prices.
• Persistently high inflation, particularly due to rising commodity costs from trade restrictions, is another factor keeping investors in gold.
• The weakening US dollar amid global trade frictions has further added to gold's attractiveness, as investors seek alternative stores of value.

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Geopolitical Risks

• US-China tensions and potential new tariffs on Asian goods could sustain gold demand as a geopolitical hedge.
• Russia-Ukraine war concerns continue to drive gold purchases, particularly in Europe and emerging markets.
• Middle East instability remains a wildcard, with any further escalation likely to push gold prices higher.

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Market Sentiment & Price Forecast

• ETF holdings in gold have grown by 3.5 million ounces (moz) year-to-date, reflecting strong investor appetite for gold exposure.
• Gold prices are projected to remain in the $2,900–$3,200 range for Q2 2025, with potential upside if global trade and economic risks persist.

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Short-to-Medium-Term Outlook

• Short-term: Gold is expected to consolidate near current highs, supported by inflation concerns and geopolitical tensions.
• Medium-term: Further central bank purchases and the potential for Fed rate cuts could sustain gold’s bullish momentum into H2 2025.
• Long-term: The combination of macroeconomic uncertainty, trade disruptions, and safe-haven demand suggests that gold may remain elevated above $3,000 into 2026.

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Conclusion

Gold remains one of the best-performing commodities of 2025, benefiting from strong central bank demand, heightened geopolitical uncertainty, and inflation risks. While short-term volatility is possible, the medium-to-long-term trajectory remains bullish, especially if trade frictions and monetary easing persist.

Silver Market Outlook

Market Drivers

• Silver prices have surged alongside gold, benefiting from strong investment demand and industrial use cases.
• The renewed focus on industrial metals has driven higher demand for silver in technology, solar panels, and EV production.
• Central bank interest in precious metals remains elevated, with some emerging market banks adding silver to reserves.

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Monetary Policy & Inflation Impact

• Federal Reserve rate expectations remain key for silver prices, with potential rate cuts in H2 2025 supporting further gains.
• Silver has outperformed many base metals, as real yields remain low, increasing its appeal as a store of value.
• Higher inflation expectations and weakening USD trends could sustain investor appetite for silver, particularly among ETF and futures markets.

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Geopolitical Risks

• Global trade tensions have led to greater uncertainty, prompting safe-haven demand for silver alongside gold.
• Ongoing supply chain disruptions in key silver-producing nations, including Mexico and Peru, could impact future supply dynamics.
• China’s industrial policies and US tariffs on technology exports may influence silver’s demand profile over the medium term.

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Market Sentiment & Price Forecast

• Silver ETF holdings have risen, reflecting growing interest in silver as both an investment and an industrial asset.
• Silver is expected to trade in the $28–$34/oz range through Q2 2025, supported by robust demand and monetary easing expectations.

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Short-to-Medium-Term Outlook

• Short-term: Prices should remain supported by strong industrial demand and ETF inflows, keeping silver near $30/oz.
• Medium-term: As Fed rate cuts materialize and inflation remains persistent, silver could push above $32/oz in H2 2025.
• Long-term: The structural shift toward green energy and industrial metals suggests silver demand will stay robust, with potential for prices to reach $35–$38/oz in 2026.

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Conclusion

Silver is benefiting from a combination of strong investment demand, industrial growth, and inflation hedging. While short-term volatility remains, the medium-to-long-term outlook remains constructive, particularly as monetary easing and industrial metal demand trends continue to support prices.

Platinum Market Outlook

Market Drivers

• Platinum prices have remained stable, trading in a range of $1,000–$1,150 per ounce, supported by industrial demand and tightening supply dynamics.
• The global shift toward hydrogen fuel cell technology has increased long-term demand prospects for platinum, particularly in automotive and energy applications.
• ETF holdings in platinum have remained stable, with investor demand lagging behind gold and silver.

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Monetary Policy & Inflation Impact

• Federal Reserve rate decisions remain a key factor, with potential cuts in H2 2025 providing support for platinum prices.
• Inflationary concerns and the weaker US dollar have helped maintain investor interest in precious metals, including platinum.
• Platinum’s industrial use differentiates it from gold and silver, as it benefits from both investment flows and industrial demand growth.

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Geopolitical Risks

• Platinum supply remains concentrated in South Africa and Russia, both of which face geopolitical and economic challenges.
• Disruptions in South African mining operations, due to power shortages and labor strikes, have added supply constraints, supporting prices.
• Russian supply risks remain elevated, as ongoing sanctions could restrict platinum exports to key markets in Europe and North America.

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Market Sentiment & Price Forecast

• Platinum prices are projected to trade between $1,050–$1,200 per ounce through Q2 2025, supported by steady industrial demand and constrained supply.
• Demand from the automotive sector is expected to grow, particularly as hybrid and hydrogen fuel cell vehicle production increases.
• Investment demand remains a wildcard, with further upside possible if inflation concerns intensify or if industrial metal shortages emerge.

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Short-to-Medium-Term Outlook

• Short-term: Prices should remain range-bound as industrial demand offsets weak investment flows.
• Medium-term: A weaker USD and potential Fed rate cuts could boost platinum’s appeal, pushing prices toward $1,200.
• Long-term: The structural shift toward hydrogen energy and supply constraints from major producers suggest that platinum could outperform other precious metals in 2026 and beyond.

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Conclusion

Platinum remains a critical industrial metal, with rising demand in hydrogen energy and automotive applications balancing supply risks. While investment demand lags behind gold and silver, the long-term outlook remains bullish, particularly if supply disruptions continue and clean energy policies drive increased usage.

Agricultural Commodities Outlook

Wheat

• Global wheat production remains strong, but weather disruptions in key exporting regions (such as the US and Australia) have introduced some volatility in supply.
• US wheat exports have remained subdued, with Russian and Ukrainian exports dominating the global market despite ongoing geopolitical tensions.
• China's demand for wheat imports is expected to increase, which could support prices in the second half of 2025.
• Price Forecast: Wheat prices are expected to trade between $6.10–$6.80 per bushel through Q2 2025, with potential upside if weather conditions deteriorate.

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Corn

• US corn production has remained resilient, but low export demand has kept prices under pressure.
• Ethanol production continues to support domestic demand, but lower fuel consumption could weigh on the sector.
• Brazil’s record corn harvest is expected to add further pressure on global prices, especially as the country gains market share.
• Price Forecast: Corn futures are expected to trade between $4.50–$5.20 per bushel, with any unexpected supply shocks likely to provide support.

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Soybeans

• Soybean demand remains strong, particularly from China, which continues to rebuild its hog herd.
• South American production has rebounded, with Argentina’s soy crop recovering from last year’s drought.
• US-China trade policies remain a wildcard, with any new tariffs or export restrictions potentially impacting demand.
• Price Forecast: Soybean futures are forecast to trade in the $12.50–$13.80 per bushel range, supported by demand stability but limited upside from supply factors.

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Coffee

• Brazil's coffee production remains high, but logistics disruptions and port delays have caused some supply constraints.
• Vietnamese coffee exports have slowed, supporting robusta prices, while arabica prices remain sensitive to weather conditions in Brazil and Colombia.
• Price Forecast: Arabica coffee is expected to trade between $1.80–$2.20 per pound, while robusta futures are forecast between $2,300–$2,500 per metric ton.

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Sugar

• Sugar prices have been supported by global supply tightness, as India and Thailand have faced lower-than-expected output.
• Brazil’s sugar output remains strong, but diversion of cane to ethanol production may limit exports.
• Price Forecast: Sugar futures are expected to trade between $21–$24 per pound, supported by tight supply and ethanol demand.

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Short-to-Medium-Term Outlook

• Short-term: Weather patterns and trade developments will be key drivers, particularly for wheat and soybeans.
• Medium-term: China’s demand recovery and global production trends will determine price action, particularly in corn and coffee markets.
• Long-term: Structural shifts in ethanol demand, climate conditions, and trade policies will shape agricultural commodity trends through 2026.

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Conclusion

Agricultural markets remain heavily influenced by global trade, weather, and macroeconomic factors. While supply levels are relatively stable, demand from key importers like China and ongoing geopolitical risks could introduce price volatility across the sector.

S&P 500 Market Outlook

Macroeconomic Drivers

• US growth expectations have weakened, with recent economic data coming in below expectations.
• Federal Reserve policy remains a key factor, with two rate cuts expected in H2 2025, which could provide some support for equities.
• Trade tensions and spending cuts under the Trump administration have weighed on corporate sentiment, raising concerns about slower earnings growth.

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Earnings & Corporate Performance

• Q1 earnings season will be critical, with companies expected to report a mix of strong tech sector profits but weaker industrial and consumer sector results.
• Profit margins remain under pressure due to higher input costs from tariffs and supply chain disruptions.
• Tech stocks have been a key driver, but rising bond yields and trade risks could challenge the sector’s momentum.

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Market Sentiment & Risks

• Investor confidence has been shaken as fears of a potential US recession have increased, with some analysts flagging a sharp slowdown in corporate investment.
• Equity market volatility has increased, driven by shifting Fed expectations and geopolitical uncertainty.
• Hedge funds have reduced their exposure to risk assets, reflecting a cautious approach to equities.

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Sector Performance

• Technology stocks continue to outperform, but valuations remain stretched.
• Financials have struggled, as concerns over economic growth have dampened banking sector outlooks.
• Industrials and consumer stocks have faced headwinds, particularly from higher costs and weakening demand.

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Short-to-Medium-Term Outlook

• Short-term: The S&P 500 is likely to remain volatile, trading within a 4,800–5,200 range, with downside risks if economic data deteriorates.
• Medium-term: Rate cuts in H2 2025 could provide support, but earnings growth will be key to sustaining equity market strength.
• Long-term: The market’s ability to absorb trade shocks and adjust to changing Fed policy will determine the longer-term trend.

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Conclusion

The S&P 500 remains in a fragile position, with economic uncertainty, corporate earnings risks, and geopolitical tensions weighing on investor sentiment. While rate cuts later this year could offer some relief, trade policies and slowing consumer demand remain key headwinds.