United States of America

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

Yesterday, March data on the state of the manufacturing sector from the Institute for Supply Management (ISM) was published: the business activity index rose from 52.5 points to 55.8 points, significantly exceeding forecasts of 53.3 points, and the indicator of new manufacturing orders increased from 49.2 points to 51.4 points. Steady upward dynamics of the industrial sector in the future may contribute to a further increase in the volume of US gross domestic product (GDP) and a slowdown in the rate of decline in inflation. It is also worth noting the publication of February data on consumer prices from the New York Federal Reserve Bank (FRB): according to expert calculations, the Multivariate Core Trend Inflation gauge decreased from 3.0% to 2.9%. During the day, investors expect the publication of February statistics on the number of open vacancies in the labor market from JOLTS: the figure may decrease from 8.863 million to 8.760 million, which will put pressure on the American currency.

Eurozone

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

Today, data on inflation and business activity in the Eurozone countries were published. In March, Germany's consumer price index (CPI) remained at 0.4% MoM instead of rising by 0.5%, and YoY it fell from 2.5% to 2.2%, reflecting a decline in inflationary pressures in the leading EU economy. March data on the Manufacturing PMI turned out to be less positive: in the Eurozone, the indicator decreased from 46.5 points to 46.1 points, slightly less than preliminary forecasts of 45.7 points, and the index for Germany decreased from 42.5 points to 41. 9 points. The volume of new orders has also decreased for the 23rd month in a row, even though enterprises are actively reducing prices for their products. Experts hope that a reduction in interest rates by the European Central Bank (ECB), which most market participants expect in June, will help turn the situation around.

United Kingdom

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

A block of economic statistics for the UK was published today. The Manufacturing PMI, thanks to domestic demand, adjusted from 47.5 points to 50.3 points and was in the growth zone for the first time since July 2022. According to the Nationwide Building Society, housing prices in March decreased by 0.2% MoM instead of growing by 0.4%, and YoY they increased by 1.6% against preliminary estimates of 2.4%. However, the annual figure showed its highest value since December 2022, confirming the positive outlook for the housing market recovery. We should also note that experts from the British Retail Consortium (BRC) reported an increase in prices in the largest stores by 1.3%, which is significantly lower than the Bank of England’s target level of 2.0%. February lending data also turned out to be positive: the volume of mortgage loans increased by 1.51 billion pounds, and the volume of borrowings to individuals by 2.888 billion pounds. All these data indicate the country's economic recovery and its likely exit from recession at the beginning of the year.

Japan

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

March data on the volume of the monetary base were published today: it grew by 1.2%, being significantly less than preliminary estimates of 2.5%, reflecting the slowest rate of increase in the amount of cash circulating in the economy in the last seven months, which, firstly, is associated with the Bank of Japan’s transition to a “hawkish” monetary policy course. It is also worth noting the comments of the country's Finance Minister Shunichi Suzuki, who today reaffirmed that the authorities are ready to take the necessary measures to stabilize the yen exchange rate but chose not to talk about specific actions. A similar opinion is shared by the former head of the regulator, Haruhiko Kuroda, who noted that the latest weakening of the national currency was excessive, and it was time for the government to intervene in the situation.

Australia

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

Investors are focused on the publication of the minutes of the Reserve Bank of Australia (RBA) meeting: experts noted that for the first time since May 2022, officials did not discuss the possibility of further raising interest rates, which is a signal of a refusal from tight monetary policy. However, the document noted that further changes in borrowing costs are difficult to predict, since some time must pass before the regulator is confident that inflation has returned to the target range of 2.0–3.0%. In the meantime, although price growth is slowing down, it remains significant. It is also worth noting comments from RBA assistant governor Christopher Kent, who said that the outlook for interest rates in Australia remained “uncertain” and confirmed that the regulator’s position was “not to rule out any action.”

Oil

Oil quotes today are trying to grow against the backdrop of another escalation of the situation in the Middle East.

Yesterday, Israel carried out an airstrike on the Iranian consulate in Syrian Damascus, to which representatives of the Iranian government have already announced that they are preparing military response measures, which, in turn, could lead to an escalation of the situation and increases the risk of interruptions in the supply of “black gold” from the region. Today, investors also expect the publication of weekly data on inventories from the American Petroleum Institute (API): the figure could decrease by 2,000 million barrels. In this case, energy prices will receive an additional boost to growth.