The United States of America

USD is weakening moderately against EUR and GBP but has ambiguous dynamics against JPY.

Investors’ attention is focused on yesterday’s macroeconomic statistics and comments from representatives of the US Federal Reserve. Thus, the core private consumption expenditure index fell from 2.9% to 2.8% YoY, balancing the increase in the January consumer price index to 3.1% compared to forecasts of 2.9% and confirming a steady trend toward weakening inflation pressures. Commenting on the situation, the President of the Federal Reserve Bank (FRB) of New York, John Williams, confirmed that the regulator’s next step will be to reduce interest rates but there is no need to rush to switch to the “dovish” rhetoric. Today, traders are awaiting the publication of the February manufacturing PMI from the Institute for Supply Management (ISM). According to preliminary estimates, the indicator will adjust from 49.1 points to 49.5 points, remaining in the stagnation zone.

Eurozone

EUR is strengthening against JPY and USD but has ambiguous dynamics against GBP.

The preliminary February consumer price index changed from –0.4% to 0.6% MoM and from 2.8% to 2.6% YoY, exceeding estimates of 2.5%, and the core rate from –0.9% to 0.7% MoM and from 3.3% to 3.1% YoY, above the expected 2.9%. Thus, inflation in the region’s economy slowed more slowly than the market had expected, allowing European Central Bank (ECB) officials to delay the transition to the “dovish” rhetoric. Meanwhile, the EU manufacturing PMI fell from 46.6 points to 46.1 points compared to preliminary estimates of 46.1 points, and the German PMI from 45.5 points to 42.5 points, although experts expected 42.3 points, increasing the risk of a recession.

The United Kingdom

GBP is strengthening against JPY and USD but has ambiguous dynamics against EUR.

The February manufacturing PMI increased from 47.0 points to 47.5 points, exceeding the expected 47.1 points and remaining in the stagnation zone: the industry is under pressure from high energy prices and tight monetary policy, which forces businesses to reduce the number of employees. The Nationwide Building Society house price index remained at 0.7% MoM instead of falling to 0.2% and increased from –0.2% to 1.2% YoY versus forecasts of 0.7%, confirming restoration of the sector and increased demand for real estate.

Japan

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

The currency is under pressure amid new comments from representatives of the Bank of Japan: the call of the regulator’s board member Hajime Takata for an early review of the current loose monetary policy was refuted by the head of the department, Kazuo Ueda, who said that it was too early to talk about victory over inflation, and the goal of stable price growth is the target level of 2.0% has not yet been achieved. In addition, the February manufacturing PMI amounted to 47.2 points, remaining in the stagnation zone: the indicator has been slowing for the ninth month under pressure from low demand from foreign consumers. The unemployment rate remained at 2.4%, meeting forecasts.

Australia

AUD is strengthening against JPY but has ambiguous dynamics against EUR, GBP, and USD.

The February manufacturing PMI fell from 50.1 points to 47.8 points, less than the expected 47.7 points: after a brief rise in January, the indicator is weakening, increasing the likelihood of the Reserve Bank of Australia (RBA) switching to the “dovish” rhetoric in the second half of the year.

Oil

Oil prices are rising.

The quotes are supported by the expectation of new decisions by the participants in the OPEC deal: next week the cartel and its allies may extend the voluntary reduction in the oil supply to the market until the end of the second quarter or the end of the year. Under current agreements, total production should fall by 3.66M barrels per day from the beginning of April. Positive dynamics are facilitated by the publication of American inflation data. The index of private consumption expenditures adjusted from 2.9% to 2.8% YoY, allowing US Federal Reserve officials to move on to adjusting monetary policy, increasing oil demand.