US-CHINA: China Announces Retaliatory Probe On US Following Sec301 Investigation

• ESTR vs ERU6 is bought for 13.5 in ~10.1k.

The interesting level looking at the chart is at 14, this is the Dec and Jan high and highest print since last April.

• RES 4: 1.3929 High Jan 16 and a reversal trigger     
• RES 3: 1.3845 High Jan 22
• RES 2: 1.3726 50-day EMA 
• RES 1: 1.3725 High Feb 2 and a key resistance
• PRICE: 1.3684 @ 08:00 GMT Feb 25
• SUP 1: 1.3594/3482 Low Feb 13 / Low Jan 30 and the bear trigger  
• SUP 2: 1.3420 Low Sep 25 ‘24
• SUP 3: 1.3400 50.0% retracement of the 2021 - 2025 uptrend 

Key short-term resistance to watch in USDCAD is 1.3725, the Feb 2 high. A clear breach of this hurdle would highlight a potential reversal and suggest scope for a stronger short-term bull cycle. For now, the medium-term trend structure remains bearish - moving average studies continue to highlight a dominant downtrend. A reversal lower would refocus attention on key support and bear trigger at 1.3482, the Jan 30 low.

FY25 German general government fiscal data shows a 2.7% deficit (2.7% 2024) according to Destatis using Maastricht criteria. This is slightly more of a deficit than where consensus likely stood ahead of the release but not outside of the ranges of tracking estimates we've seen recently.

• About 2/3rds of the 2.7% 2025 deficit are attributable to the federal level, with the remaining third coming from the state ("Länder"), municipal ("Gemeinden") and social insurance levels (social insurance is shown separately in Destatis data).
• For 2026, estimates for the German general government deficit range between roughly 3-4%, with the median view sitting around the middle of that range, as the fiscal push from the government is expected to pick up.

On detailed drivers:

• Revenue "amounted to E2140bln, an increase of 5.7% Y/Y, or E115.8bln [...] due to a rise in social security contributions, which rose by 8.9%. Government current tax revenue increased by 3.5% in 2025 to €1,031.5 billion. Value-added tax (VAT) revenue saw a 4.0% increase, while income and wealth tax revenue rose by 3.4%. Significantly higher revenue from wealth-related taxes, resulting from increased inheritances, also contributed to the overall increase in government revenue."
• Expenditure "increased by 5.6% or E119.6bln in 2025 compared to the previous year, reaching E2259bln. This increase outpaced revenue growth. Interest payments in 2025 were 8.1% higher than in the previous year. Monetary social benefits rose by 5.6%. This was primarily due to increased spending on pensions and retirement benefits, as well as higher expenditures on long-term care and unemployment benefits. Social benefits in kind increased by 7.3%, mainly due to higher spending on hospital treatment, medication, and long-term care. The 10.3% increase in gross investment was attributable to the commencement of expenditures from the special fund for infrastructure and climate neutrality, as well as rising military spending."

The release follows federal data last week for January 2026 which showed higher core budget spending, lower tax revenue, and a resulting higher deficit compared to last year. Special fund spending seemed insignificantly ahead of forecasts.