United States of America

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

Investors are focused on the publication of inflation data for February: MoM, the consumer price index increased from 0.3% to 0.4%, and YoY – by 3.2% with a forecast of 3.1%, while the basic indicator MoM amounted to 0.4% with expectations of a decrease to 0.3%, but adjusted from 3.9% to 3.8% YoY, being lower than the forecast of 3.7%. Inflation has resumed its rise, albeit slightly, amid rising costs for electricity, gasoline, and housing. These data may give US Federal Reserve officials reasons to postpone the start of the cycle of interest rate cuts to the second half of the year, but most investors still hope that this will happen in June, since previously members of the regulator’s board have repeatedly warned that the path to the reduction in consumer prices to the 2.0% target “will not be linear”.

Eurozone

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

Today, February German inflation data was published: MoM, the consumer price index increased from 0.2% to 0.4%, and YoY, it decreased from 2.9% to 2.5%, while the harmonized indicator increased from -0.2% to 0.6% MoM and decreased from 3.1% to 2.7% YoY, allowing investors to count on the European Central Bank (ECB) to begin adjusting monetary policy in June, and some experts are even counting on two consecutive interest rate cuts, in June and July. It’s also worth noting the publication of data on business sentiment in the German chemical industry from the Institute for Economic Research (IFO): in February, the index increased from -16.1 points to -15.7 points, as demand for chemicals increased for the first time in two years and customers placed a large number of orders, helping to increase production. These statistics strengthen the market's hopes of overcoming the recession in the German economy.

United Kingdom

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

Investors are focused on the publication of January data on the labor market, which confirmed its cooling: employment decreased by 21.0 thousand instead of the expected increase of 10.0 thousand, the unemployment rate adjusted to 3.9% against the forecast of 3.8%, the average wages including bonuses increased by 5.6% instead of the predicted 5.7%, and without them – by 6.1% instead of 6.2%. The growth in wages in the country turned out to be the slowest since 2022, which allowed the Morgan Stanley financial holding experts to say that a monetary policy adjustment could begin as early as May, since the likelihood of the Bank of England (BoE) cutting interest rates in the next few months is “severely underpriced”. However, representatives of the regulator are still cautious in their statements: yesterday, board member Catherine Mann noted that the UK still has “a long way to go” to achieve the inflation target of 2.0%.

Japan

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

The yen came under pressure amid comments from the state’s officials: for example, the head of the Bank of Japan (BoJ), Kazuo Ueda, said in parliament today that the economy is recovering moderately, and in some of its sectors there is weakness, while consumption of food and essential goods is declining due to high prices. These estimates turned out to be more pessimistic than those contained in the January economic report of the BoJ, which disappointed market participants. At the same time, Finance Minister Shunichi Suzuki noted that the economy is not yet in a state where it would be possible to declare victory in the fight against deflation. These comments were made on the eve of the regulator's March meeting, which added to investors' doubts about the transition to increasing interest rates. Also today, February data on the price index for corporate goods were published: the indicator increased from 0.0% to 0.2% MoM and from 0.2% to 0.6% YoY.

Australia

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

January data on the construction market and February statistics on business confidence from the National Australia Bank (NAB) were published today. The total volume of issued building permits decreased by 1.0%, and the figure for private houses decreased by 9.9%. These data were in line with experts' expectations and confirmed that the construction market pressured by high rates from the Reserve Bank of Australia (RBA) and the economic crisis. Business activity data from NAB was ambiguous: the business confidence index fell from 1.0 points to 0.0 points, but the current business conditions indicator increased from 7.0 points to 10.0 points, and the trading conditions index grew from 9 .0 points to 14.0 points. NAB’s chief economist Alan Oster said that cost pressures on businesses remained elevated and companies had the opportunity to pass this on to consumers. In these conditions, the expert sees the path for inflation to reach the target range of 2.0–3.0% by 2025 as full of uncertainty. Oster also expects the regulator to take a cautious approach and keep interest rates at high levels for most of this year.

Oil

Oil prices are influenced by several opposing factors and have ambiguous dynamics.

The trading instrument is supported by the publication of the monthly OPEC report: according to forecasts, this year the demand for “black gold” will increase by 2.25 million barrels per day, and by 2025 – by 1.85 million barrels per day. The document also states that the positive dynamics observed in 2023 are likely to be maintained, which will lead to an increase in oil consumption by the main market players. On the other hand, more rapid upward dynamics of quotes is hampered by the publication of February data on inflation in the United States, which confirmed its increase and growing likelihood of maintaining high interest rates for a longer period. During the day, investors are also awaiting the release of the weekly inventory report from the American Petroleum Institute (API): they are expected to adjust by 0.400 million barrels, putting additional pressure on prices.