United States of America

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

Investors are focused on the monetary policy of the US Federal Reserve and the comments of the regulator's board members, who so far remain very cautious. Yesterday, the head of the Atlanta Federal Reserve Bank (FRB), Raphael Bostic, said that there is no immediate need to cut interest rates as the economy is stable and the labor market remains strong, creating risks of keeping the consumer price index (CPI) above the target level of 2.0%. The official also reiterated his previous position that interest rates could be adjusted no more than twice by the end of the year, each time by 25.0 basis points, but that more evidence of a sustained slowdown in inflation would be needed first. During the day, the market awaits the publication of February data on the non-manufacturing purchasing managers' index: it is predicted that the indicator will decrease from 53.4 points to 53.0 points, but will remain in the growth zone, which may support the US dollar.

Eurozone

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

European data on business activity and wholesale prices were published today. In February, the Services PMI rose from 48.4 points to 50.2 points, exceeding the forecast of 50.0 points, and returned to the growth zone. The Composite PMI increased from 47.9 points to 49.2 points with expectations of 48.9 points. Positive data are also observed in the EU-leading German economy: the Services PMI here increased from 47.7 points to 48.3 points, and the Composite PMI decreased from 47.0 points to 46.1 points with the forecast of 46.1 points. The producer price index (PPI) in January remained at -0.9% MoM and adjusted from -10.7% to -8.6% YoY. These data confirm that manufacturers remain under pressure and have to cut prices due to insufficient demand.

United Kingdom

GBP is weakening moderately against its main competitors – EUR, JPY, and USD.

Today, data was published on the Services PMI, which decreased from 54.3 points to 53.8 points, while the Composite PMI adjusted from 52.9 points to 53.0 points but was lower than the predicted 53.3 point. Business representatives reported that new orders for services increased at the fastest pace since May. Also today, February data on retail sales from the British Retail Consortium (BRC) was published: the figure increased by 1.0%, below both the forecast of 1.6% and the previous value of 1.4%. Even though bad weather contributed to the negative dynamics of the indicator, due to which consumers were forced to stay at home, households are still under pressure from high inflation.

Japan

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

Investors are focused on the release of February inflation data in the Tokyo metropolitan area: YoY, the consumer price index (CPI) rose from 1.8% to 2.6%, and the core CPI from 1.8% to 2.5%. These statistics increase the likelihood that the Bank of Japan will soon move to tighten monetary policy: officials are expected to discuss the possibility of phasing out economic incentives as early as this month. Also today, February data on the Services PMI was published: the index decreased from 53.1 points to 52.9 points, but remained in the growth zone, and the Composite PMI decreased from 51.5 points to 50.6 points.

Australia

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

In February, the Services PMI increased from 49.1 points to 53.1 points and exceeded the 52.8 points expected by experts, and the Composite PMI – from 49.0 points to 52.1 points. The trade account balance in Q4 2023 adjusted from 1.3 billion Australian dollars to 11.8 billion Australian dollars due to increased exports of iron ore and coal, which, in turn, virtually eliminates the risk of a recession in the national economy.

Oil

Oil prices are being correcting downwards today: quotes are being pressured by investors' disappointment with the Chinese government's plans to stimulate the growth of its own economy.

Chinese officials have set a target for gross domestic product (GDP) growth of around 5.0% for the current year, similar to last year's target, but no major plans have been announced to boost growth in the now-under-pressure economy, raising doubts among experts about achieving the set goals. During the day, investors are also awaiting the publication of a weekly report on inventory levels from the American Petroleum Institute (API): the last time the indicator rose by 8.428 million barrels. Continuation of this trend may increase pressure on oil prices.