The United States of America

USD is strengthening against EUR, JPY, and GBP.

Investors focus on the March data from the labor market, which confirmed its resistance to the current measures of the Fed’s monetary policy tightening. The employment level increased by 303.0K, significantly higher than both forecasts of 212.0K and 270.0K previously. The greatest increase was in the healthcare sector (72.0K), the public services sector (71.0K), and the hotel business (49.0K). At the same time, the unemployment rate decreased from 3.9% to 3.8%, and the growth of average hourly wages adjusted from 0.2% to 0.3% MoM and from 4.3% to 4.1% YoY. The statistics increase the likelihood that regulator officials will maintain high interest rates longer than expected, supporting the national currency. In addition, some department officials admit the possibility of canceling the monetary policy adjustment this year. Thus, Minneapolis Federal Reserve Bank (FRB) President Neel Kashkari said that reducing borrowing costs might not be necessary if inflation continued to weaken and the economy maintained significant growth momentum.

Eurozone

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

In February, German factory orders rose 0.2% instead of the expected 0.6%, confirming the likelihood of further economic contraction. Experts note that demand for German goods remains poor and is unlikely to recover soon. Eurozone retail sales fell 0.5% MoM, beating early estimates of 0.3% and 0.7% YoY instead of an expected 1.3% decline. The data remain extremely poor due to pressure inflation and high interest rates of the European Central Bank (ECB) on households.

The United Kingdom

GBP is weakening against EUR, JPY, and USD.

In March, the construction PMI increased from 49.7 points to 50.2 points, returning to the green zone and reflecting the prerequisites for the country’s exit from recession. Halifax house price index was ambiguous: it increased by 0.3% MoM, less than expected 1.5%, and fell by 1.0% YoY, while experts had predicted an increase of 0.3 %, demonstrating negative dynamics for the first time in six months, which confirms the continued pressure of high Bank of England interest rates on the industry. Note that the Halifax data contradicts previously published statistics from the British Nationwide Building Society, which reflected an increase of 1.6% YoY.

Japan

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

In February, the household expenditure index increased from –2.1% to 1.4% MoM, exceeding forecasts of 0.5%, and from –6.3% to –0.5% YoY, supporting economic growth and increasing inflation. Today, Bank of Japan Governor Kazuo Ueda said that consumer price growth would accelerate in the summer and fall amid rising wages, which experts took as a hint of a possible tightening of monetary policy during this period. Meanwhile, Prime Minister Fumio Kishida warned that the authorities would use all available means to cope with the excessive decline of the national currency. However, investors received little reaction to these comments since they have been voiced more than once, but officials have not yet taken concrete action.

Australia

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

Australian exports fell 2.2% in February after rising 1.5% earlier, while imports rose 4.8%, faster than the previous 1.4%, pushing the trade surplus to a correction from 10.058B Australian dollars to 7.280B Australian dollars. The statistics reflect pressure on the industrial sector, however, domestic consumption may increase, too. In addition, retail sales data were published today. The February figure increased by 0.3% compared to 1.1% in the previous period.

Oil

Oil prices are trying to start declining.

Pressure on prices is exerted by March statistics from the American labor market, as significant employment growth and a decrease in the unemployment rate increase the likelihood that the US Fed will postpone the start of monetary policy easing to the second half of the year, which supports the American dollar against alternative assets, including raw materials. However, medium-term fundamental factors remain positive for the market, so a resumption of positive dynamics is possible soon. Thus, investors expect Iranian retaliatory attacks on Israeli infrastructure in the Middle East region, which could cause disruptions in oil supplies to the market. At the same time, OPEC and its allies maintain a policy of production reduction, demanding that members of the deal comply more strictly with it.