USD: A Volatile session in G10 FX

• RES 4: 107.120 High Mar 4 and key resistance    
• RES 3: 107.046 76.4% retracement of the Mar 4 - 5 sell-off    
• RES 2: 107.000 61.8% retracement of the Mar 4 - 5 sell-off 
• RES 1: 106.925 38.2% retracement of the Mar 4 - 5 sell-off         
• PRICE: 106.885 @ 06:19 GMT Mar 4    
• SUP 1: 106.805 Intraday low  
• SUP 2: 106.790 Low Feb 21  
• SUP 3: 106.735 Low Feb 19 and a key support  
• SUP 4: 106.600 Round number support   

Schatz futures have gapped lower today and this highlights a potential bear threat. The move down also undermines a recent bullish theme. A continuation lower would expose a key support at 106.735, the Feb 19 low. Clearance of this level would strengthen a bearish theme and signal scope for a deeper sell-off. On the upside, key short-term resistance has been defined at 107.120, the Mar 4 high.

Swiss February CPI (due 07:30 GMT / 08:30 CET) is expected to decelerate by 0.2pp to 0.2% Y/Y. Core inflation is expected at 0.7% (0.9% Jan). This is the last CPI print ahead of the upcoming SNB meeting (March 20), and market pricing for that decision suggests that the bar for any move other than a 25bps cut to 0.25% is rather high.

• A February CPI print in line with consensus would bring in average Q1 inflation to date in line with the December SNB conditional inflation forecast of 0.3%.
• Consensus for today's release is near-symmetric around the mode, with 3 analysts looking for a 0.1% print, 6 analysts looking for 0.2%, 4 analysts looking for 0.3%, and one for 0.4%.
• Rental inflation is set to see its quarterly update this month - in November (last update), its yearly rate decelerated by 0.6pp from its cycle high to 3.4% Y/Y. Local media quotes that UBS, ZKB and Raiffeisen Bank all look for rental inflation to print above 3% in 2025 overall. While existing contracts should see rent decreases this year (on the back of lower projected "reference interest rates" which are an indirect, lagged function of SNB policy rates), new contracts are expected to continue to drift upwards in price.
• The SNB has in the past also indicated that it views rental inflation as a lagged function of its policy - so focus also should be on how services excl. rents develops (dark blue bars in chart below).
• The hospitality category, which is a part thereof, has seen a general minimum wage increase by 1.1% on February 1 according to media reports - however, that 1.1% appears not excessive (considering UBS recently quoted Swiss nominal wage growth during the last 10 years at around 1%) and any wage growth should only flow into consumer prices over time. Hospitality inflation continues to run above the upper bound of the SNB's asymmetric inflation target of 2%.
• As a reminder, in January, Swiss inflation came in in line with consensus at 0.4% headline Y/Y as an energy drag more than outweighed services inflation excl. rents bouncing a little from cycle lows.

Greece and the EU will both look to hold bill auctions today, whilst Germany, the Netherlands, France, Spain, Belgium and the ESM already held auctions this week. We look for E26.8bln to be on offer in first round operations, up from E18.8bln last week.

• Today, Greece will look to sell E500mln of the new 52-week Mar 6, 2026 GTB.
• Also today, the EU will round bill issuance for the week to a close with up to E1.5bln of the 3-month Jun 6, 2025 EU-bill, up to E1.5bln of the new 6-month Sep 5, 2025 EU-bill and up to E1.5bln of the new 12-month Mar 6, 2026 EU-bill on offer.