United States of America

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

Investors remain focused on the US inflation data for March published yesterday: YoY, the consumer price index (CPI) amounted to 3.5% instead of 3.4%, and the core indicator reached 3.8% against expectations of 3.7%, confirming acceleration of the inflation rate for the third month in a row, which, against the backdrop of an increase in employment in March by 303.0 thousand and a decrease in unemployment to 3.8%, can significantly affect the decisions of the US monetary authorities. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, most market participants now expect only two cuts in borrowing costs during the year, with the first of them not likely to occur until September, and some experts believe that there will be no monetary policy adjustments may not happen at all this year. Also today, weekly data on the labor market and statistics on the producer price index (PPI) for March were published: the number of initial jobless claims increased by 211.0 thousand, being less than both the forecasts of 216.0 thousand and the previous figure of 222.0 thousand; at the same time, the total number of citizens receiving benefits from the state increased to 1.817 million, exceeding the expectations of 1.800 million. In turn, the PPI MoM decreased from 0.6% to 0.2%, but YoY it increased from 1.6% to 2.1%, which confirms increased inflationary pressure and increases the likelihood of the US Federal Reserve maintaining high interest rates.

Eurozone

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

Investors are focused on the results of the meeting of the European Central Bank (ECB), at which the regulator left interest rates unchanged: key at 4.50%, margin at 4.75%, and deposit at 4.00%, but at the same time allowed for the possibility of their reduction in the event of a slowdown in inflation. Officials said that the dynamics of decline in consumer prices generally confirms medium-term forecasts and is ensured by a decrease in the cost of food and goods. Even though the regulator did not announce specific dates for the start of monetary policy adjustments, most experts continue to believe that the first reduction in interest rates will happen in June, and there may be three or four in total during the year.

United Kingdom

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

In the absence of significant economic releases, investors are focused on comments from Bank of England (BoE) officials regarding further actions in the field of monetary policy. Thus, today, Megan Greene, a member of the regulator’s board, said that there is still a long way to go before interest rates in the British economy begin to decline, since inflation, especially in the service sector, remains too high. Also today, the results of a study of credit conditions were published: BoE experts note that most institutions expect increased demand for mortgage loans in the next three months as the housing market continues to recover.

Japan

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

In the absence of significant economic releases, the movement of the yen is determined by external factors. It is only worth noting that yesterday it reached a 34-year low against the US dollar, after which Japanese Finance Minister Shunichi Suzuki said that he does not rule out any steps to combat excessive exchange rate fluctuations, since this phenomenon is extremely undesirable, and the movement of quotes should reflect fundamentals rather than be speculative. Experts also note that this may complicate the decision on a further increase in the key rate by the Bank of Japan, since it will entail an increase in the cost of imports, put additional pressure on domestic demand, and cause an economic contraction.

Australia

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

Preliminary inflation data for April was released today: the rate increased from 4.3% to 4.6% instead of the expected decline to 4.1%, confirming continued significant pressure in the country's economy and increasing the likelihood of prolonged high interest rates by the Reserve Bank of Australia (RBA). Also today, February statistics on construction permits were published, confirming forecasts: the total volume of issued permits decreased by 1.9%, and the number of permits for the private houses increased by 10.7%.

Oil

Oil prices are declining today: the market is being pressured by rising inventories of petroleum products in the United States, as well as growing fears that the American regulator will continue to maintain high interest rates for a long time; nevertheless, long-term factors remain positive.

The US Department of Energy's Energy Information Administration (EIA) report released yesterday showed commercial oil volumes rising by 5.841 million barrels, well above expectations of a 0.900 million barrel increase, while gasoline inventories also rose by 0.715 million barrels and distillate inventories – by 1.659 million barrels Meanwhile, investors have seriously adjusted their expectations regarding further actions of the US Federal Reserve: now most of them believe that the first interest rate cut will take place no earlier than September, and there will be no more than two of them during the year, thus, the dollar will receive a long-term support against alternative assets. However, the current market correction appears to be temporary as the situation in the Middle East remains tense and the consumption outlook remains stable. Experts still await Iranian retaliatory strikes on Israeli infrastructure, and therefore several states have advised their citizens not to visit the region in the near future. We should also note that yesterday OPEC confirmed the forecast for sustainable fuel consumption in the summer months: according to the calculations of cartel specialists, global oil demand will increase by 2.25 million barrels per day in 2024 and by 1.85 million barrels per day in 2025.