KEY RELEASES
United States of America
USD is weakening against JPY and EUR but has ambiguous dynamics against the GBP.
Investors' attention remains focused on the US Federal Reserve's monetary policy and comments from its leading officials. Yesterday, the head of the Kansas City Federal Reserve Bank (FRB) President Jeffrey Schmid, said that since inflation significantly exceeds the target of 2.0%, the labor market remains strong and demand is stable, there is no point in adjusting borrowing costs yet. He asked market participants to “be patient” and confirmed the continued risks of accelerated inflation due to shipping problems in the Red Sea, which could contribute to higher costs of consumer goods. Today, the publication of February data on the consumer confidence index is also expected: it is predicted that the indicator will not change and amount to 114.8 points.
Eurozone
EUR is strengthening against GBP and USD but is weakening against JPY.
Data on lending in the Eurozone was published today: in January, the figure for the private sector was 0.3%, which is less than December’s 0.4%, and for enterprises the growth rate slowed from 0.5% to 0.2%. Overall, the indicator increased at its slowest pace since 2016 as financial institutions come under pressure from high interest rates from the European Central Bank (ECB). Investors expect the start of monetary policy easing, which will support the banking sector and contribute to economic recovery. The consumer climate index for March rose from -29.6 points to -29.0 points due to weak prospects for Europe's largest economy. Gfk Group expert Rolf Buerkl noted that a rapid recovery in consumer spending is not expected in the near future.
United Kingdom
GBP is weakening against its main competitors – EUR, JPY, and USD.
Today, February inflation data in the UK's largest retail chains from the British Retail Consortium (BRC) was published: according to experts, prices grew at the slowest pace since March 2022, by 2.5%, which is significantly lower than the January increase of 2.9%. At the same time, the increase in the cost of food products slowed down from 6.1% to 5.1%, and for non-food products it maintained the dynamics at 1.3%. BRC Chief Executive Helen Dickinson said that falling energy costs, as well as intense retail competition, had contributed to the slowdown in price growth. New signs of a slowdown in consumer prices give the Bank of England more and more reasons to move to lower interest rates, which puts pressure on the pound.
Japan
JPY is strengthening against its main competitors – USD, EUR, and GBP.
Investors are focused on the publication of inflation data for January: YoY, the national consumer price index amounted to 2.2% against a forecast of 2.1%, and the base rate was 2.0%, exceeding preliminary expert estimates of 1.9%, strengthening the prospects for the Bank of Japan to soon abandon its policy of negative interest rates. Most economists expect unions and company representatives to reach a deal in March for significant wage increases, a prerequisite for the start of stimulus cuts that could occur in March or April.
Australia
AUD is strengthening against GBP, EUR, and USD and has ambiguous dynamics against JPY.
In the absence of significant economic releases, the movement of the Australian dollar is determined by external factors. It is only worth noting Australian media reports, citing Trade Minister Don Farrell, that in March China may cancel increased tariffs on Australian wine exports, which would be a significant step towards normalizing trade relations and supporting the economy. Also on Wednesday, investors expect the publication of January data on the weighted average consumer price index. It is expected that the figure will rise from 3.4% to 3.6%, remaining fairly close to the Reserve Bank of Australia's (RBA) target range of 2.0–3.0%, however, this will give the regulator reasons to maintain interest rates at high levels longer.
Oil
Oil prices are making moderate attempts to decline today amid reports of discussions about the terms of a truce between Israel and the Palestinian Hamas movement.
Yesterday, US President Joe Biden said that Israel was ready to stop hostilities on the eve of the Muslim holy month of Ramadan. Hamas representatives noted that the final terms of the ceasefire have not yet been agreed upon, but experts expect that an agreement could be signed as early as next week. During the day, investors are also awaiting the publication of a weekly report on oil inventories from the American Petroleum Institute (API): the indicator last rose by 7.168 million barrels, and the continuation of this trend could put additional pressure on quotes.
United States of America
USD is weakening against JPY and EUR but has ambiguous dynamics against the GBP.
Investors' attention remains focused on the US Federal Reserve's monetary policy and comments from its leading officials. Yesterday, the head of the Kansas City Federal Reserve Bank (FRB) President Jeffrey Schmid, said that since inflation significantly exceeds the target of 2.0%, the labor market remains strong and demand is stable, there is no point in adjusting borrowing costs yet. He asked market participants to “be patient” and confirmed the continued risks of accelerated inflation due to shipping problems in the Red Sea, which could contribute to higher costs of consumer goods. Today, the publication of February data on the consumer confidence index is also expected: it is predicted that the indicator will not change and amount to 114.8 points.
Eurozone
EUR is strengthening against GBP and USD but is weakening against JPY.
Data on lending in the Eurozone was published today: in January, the figure for the private sector was 0.3%, which is less than December’s 0.4%, and for enterprises the growth rate slowed from 0.5% to 0.2%. Overall, the indicator increased at its slowest pace since 2016 as financial institutions come under pressure from high interest rates from the European Central Bank (ECB). Investors expect the start of monetary policy easing, which will support the banking sector and contribute to economic recovery. The consumer climate index for March rose from -29.6 points to -29.0 points due to weak prospects for Europe's largest economy. Gfk Group expert Rolf Buerkl noted that a rapid recovery in consumer spending is not expected in the near future.
United Kingdom
GBP is weakening against its main competitors – EUR, JPY, and USD.
Today, February inflation data in the UK's largest retail chains from the British Retail Consortium (BRC) was published: according to experts, prices grew at the slowest pace since March 2022, by 2.5%, which is significantly lower than the January increase of 2.9%. At the same time, the increase in the cost of food products slowed down from 6.1% to 5.1%, and for non-food products it maintained the dynamics at 1.3%. BRC Chief Executive Helen Dickinson said that falling energy costs, as well as intense retail competition, had contributed to the slowdown in price growth. New signs of a slowdown in consumer prices give the Bank of England more and more reasons to move to lower interest rates, which puts pressure on the pound.
Japan
JPY is strengthening against its main competitors – USD, EUR, and GBP.
Investors are focused on the publication of inflation data for January: YoY, the national consumer price index amounted to 2.2% against a forecast of 2.1%, and the base rate was 2.0%, exceeding preliminary expert estimates of 1.9%, strengthening the prospects for the Bank of Japan to soon abandon its policy of negative interest rates. Most economists expect unions and company representatives to reach a deal in March for significant wage increases, a prerequisite for the start of stimulus cuts that could occur in March or April.
Australia
AUD is strengthening against GBP, EUR, and USD and has ambiguous dynamics against JPY.
In the absence of significant economic releases, the movement of the Australian dollar is determined by external factors. It is only worth noting Australian media reports, citing Trade Minister Don Farrell, that in March China may cancel increased tariffs on Australian wine exports, which would be a significant step towards normalizing trade relations and supporting the economy. Also on Wednesday, investors expect the publication of January data on the weighted average consumer price index. It is expected that the figure will rise from 3.4% to 3.6%, remaining fairly close to the Reserve Bank of Australia's (RBA) target range of 2.0–3.0%, however, this will give the regulator reasons to maintain interest rates at high levels longer.
Oil
Oil prices are making moderate attempts to decline today amid reports of discussions about the terms of a truce between Israel and the Palestinian Hamas movement.
Yesterday, US President Joe Biden said that Israel was ready to stop hostilities on the eve of the Muslim holy month of Ramadan. Hamas representatives noted that the final terms of the ceasefire have not yet been agreed upon, but experts expect that an agreement could be signed as early as next week. During the day, investors are also awaiting the publication of a weekly report on oil inventories from the American Petroleum Institute (API): the indicator last rose by 7.168 million barrels, and the continuation of this trend could put additional pressure on quotes.
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