United States of America

Today, USD is strengthening against its main competitors – EUR, JPY, and GBP.

Investors are focused on the publication of September inflation data, which did not meet market expectations: the consumer price index decreased from 0.6% to 0.4% MoM (with a forecast of 0.3%), and remained at 3.7% YoY instead of the expected decline to 3.6%. The base indicator remained at 0.3% MoM and decreased from 4.3% to 4.1% YoY. The slowdown in the inflation decline rate strengthens the positions of US Federal Reserve officials who advocate continued tightening of monetary policy, for example, the regulator's governor Michelle Bowman, who said yesterday that a new rate hike is quite possible. Also today, weekly data from the American labor market were published, confirming its resistance to the current measures of the regulator: the number of initial jobless claims amounted to 209K, which turned out to be less than forecasts (210K) and corresponded to the previous indicator (209K), while the total number of citizens receiving support from the state increased from 1.672M to 1.702M

Eurozone

EUR is weakening against JPY and USD and has an ambiguous dynamics with GBP.

Investors were focused on the publication of the minutes of the last meeting of the European Central Bank (ECB). According to the document, the representatives of the regulator were divided in their opinions on further actions, but decided to raise interest rates to demonstrate determination in the fight against inflation, as a result of which the key rate rose to 4.0%. Officials indicated that, according to mathematical modeling, a rate in the range of 3.75%–4.00% (given that it is maintained for a long enough time) will help to bring inflation back to the target level of 2%. It is also worth noting the recent comments of the governor of the Bank of France, Francois Villeroy de Galhau, who said today that it is possible to ensure a "soft landing" of the European economy and urged colleagues to continue to keep the cost of borrowing at current levels.

United Kingdom

Today, GBP is declining against USD and JPY and shows an ambiguous dynamics with EUR.

Today, the data on the gross domestic product (GDP) of the UK, as well as statistics on industrial production for August, have been published. MoM, the British economy grew by 0.2%, partially recovering from a 0.6% drop in July, and YoY, it accelerated growth from 0.3% to 0.5%. Experts note that the country's economy currently remains stable, but the risks of recession are growing: they are associated with the intensification of the global crisis, the shortage of qualified personnel and barriers to trade with the EU emerging after Brexit, as well as high inflation and interest rates. So far, the services sector continues to contribute to economic growth, growing by 0.4%, while the manufacturing and construction sectors declined by 0.8% and 0.5%, respectively. Also today, August statistics on the volume of industrial production were published, which turned out to be weak: MoM, the indicator decreased by 0.7% (while expecting a decrease of 0.2%), YoY it increased by 1.3%, being below the forecast of 1.7%.

Japan

JPY is weakening against USD, but is strengthening against EUR and GBP.

Today, data on the corporate goods price index in Japan for September were published: MoM, the indicator decreased from 0.3% to -0.3% (with a forecast of 0.1%), and YoY – from 3.3% to 2.0%, also more than predicted (2.3%). Lowering prices for corporate goods may be a sign of a further decline in consumer inflation, which may push the Bank of Japan to maintain its current soft monetary policy. August data on orders in mechanical engineering were also published, which turned out to be weak: MoM, the indicator decreased by 0.5%, instead of the expected growth of 0.4%, and YoY it decreased by 7.7% (experts expected a decrease of 7.3%).

Australia

AUD is weakening today against its main competitors — USD, EUR, GBP and JPY.

In the absence of significant releases, the Australian currency moves due to external factors. It is only worth noting that due to the rise in fuel prices in October, the index of consumer inflation expectations in Australia grew from 4.6% to 4.8% instead of the expected decline to 4.4%. These data may contribute to the revision of the position of officials of the Reserve Bank of Australia (RBA) to keep the rate at 4.10% in favor of a new increase in the cost of borrowing.

Oil

Oil prices are growing today.

The continuation of the Arab-Israeli conflict continues to push the quotes up, as fears of supply disruptions from the region persist. Nevertheless, the leading exporters – Saudi Arabia and Russia – promise to make every effort to stabilize prices. Yesterday, Deputy Prime Minister of Russia Alexander Novak said that the current prices for "black gold" take into account the Middle East conflict and show that the risk from it is small. Meanwhile, the International Energy Agency (IEA) lowered the forecast of oil demand growth for 2024 from 1M to 880K barrels per day. However, OPEC continues to adhere to the previous growth forecasts: according to the calculations of the cartel, this year consumption will amount to 2.44M barrels per day, and in 2024 – 2.25M barrels per day. A weekly report on the amount of oil reserves in the United States from the American Petroleum Institute (API) will also be published during the day. They are expected to grow by 0.493M barrels, which may put pressure on prices.