The United States of America

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

The Conference Board’s consumer confidence index in March decreased from 104.8 points to 104.7 points instead of the expected increase to 106.9 points, remaining high but still reflecting the population’s confidence in the prospects of the country’s economy. Tomorrow, Q4 2023 data on gross domestic product (GDP) will be published. It is expected to accelerate growth from 4.9% to 3.2%, corresponding to the dovish course of the US Federal Reserve. Most experts expect the regulator to ease monetary policy in June, as well as three or four interest rate cuts of 25 basis points. However, if the American economy growth exceeds preliminary estimates, department officials may postpone the borrowing costs adjustment to the second half of the year, additionally supporting the national currency.

Eurozone

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

The EU consumer confidence index rose from –15.5 points to –14.9 points in March, justifying expert forecasts. Citizens’ sentiment is improving amid expectations that European Central Bank (ECB) officials will soon begin lowering interest rates. Thus, today, the head of the Bank of Italy, Piero Cipollone, said that the authorities’ confidence that inflation would return to the target of 2.0% by mid–2025 was increasing as wage growth was slowing, which is the basis for adjusting monetary policy.

The United Kingdom

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

The quarterly report from the Bank of England’s Financial Policy Committee was published today, with officials saying the country’s mortgage holders and businesses were coping with high-interest rates, with bad debt levels well below levels seen after the 2008 crisis. Although the global situation remained challenging, the financial system remains stable and well-protected from possible shocks. In addition, yesterday, the regulator’s board member Catherine Mann noted that markets are counting on too significant a decline in borrowing costs over the course of this year, and the number of monetary policy adjustments may be fewer than investors currently believe.

Japan

JPY is strengthening against EUR, GBP, and USD.

Investors are focusing on recent comments from leading policymakers. Bank of Japan board member Naoki Tamura said the regulator should continue to tighten monetary policy slowly and steadily and also warned of the risks of aggressively raising interest rates if consumer prices rise too quickly. At the same time, the head of the Bank of Japan, Kazuo Ueda, said that at the moment, it was important to support the national economy, which is on the verge of recession, which investors took as a warning about a possible postponement of further adjustments in borrowing costs.

Australia

AUD is weakening against JPY, GBP, EUR, and USD.

The weighted average consumer price index in February has been unchanged at 3.4% YoY for the third month instead of an expected rise to 3.5%, raising the possibility that Reserve Bank of Australia (RBA) officials will soon begin easing monetary policy. Last week, representatives of the regulator left the interest rate at 4.35% but ruled out the possibility of its further increase. Currently, most experts expect the agency to begin adjusting borrowing costs this fall.

Oil

The morning decline in oil prices gave way to positive dynamics.

Initially, the market was pressured by a sharp increase in oil inventories in the United States: according to yesterday’s report from the American Petroleum Institute (API), the figure increased by 9.337M barrels. In addition, it became known that at the OPEC meeting next week, the parties to the agreement do not plan to adjust raw material production. Currently, oil prices have regained lost ground, as long-term fundamental factors remain positive: experts expect the world’s leading regulators to cut interest rates soon, and global geopolitical tensions, increasing the risks of supply disruptions, persist. Today, the US Department of Energy’s Energy Information Administration (EIA) data will be published: according to preliminary estimates, oil inventories will decrease by 0.700M barrels, supporting the asset.