United States of America

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

Today, US gross domestic product (GDP) data was released, as well as weekly statistics on the labor market. In the second quarter, the US economy strengthened by 3.0%, significantly exceeding the first quarter result of 1.6%. However, it is unlikely that these statistics will have a noticeable impact on the determination of US Federal Reserve officials to continue reducing borrowing costs in the near future, since the key indicator for them now is not economic growth, but the unemployment rate. Labor market data released today was mixed: Initial jobless claims increased by 218.0 thousand, below both the 224.0 thousand forecast and the previous 222.0 thousand, while the total number of people receiving government assistance rose to 1,834 million from 1,821 million, compared to the 1,828 million estimates.

Eurozone

EUR is strengthening against USD, weakening against GBP and has ambiguous dynamics in pair with EUR.

Today, data on the consumer climate index in Germany from Gfk Group for October was published: the indicator rose from ˗21.9 points to ˗21.2 points instead of the expected decline to ˗22.4 points. Analysts note that consumer sentiment remains quite low due to uncertainty in the economy and fears of a deepening economic downturn. It is also worth paying attention to the change in forecasts for the dynamics of rate cuts by the European Central Bank (ECB) from Deutsche Bank: earlier it was assumed that the regulator would reduce the cost of borrowing to a neutral level of 2.00–2.50% by the end of next year, but now it is expected that the process of easing monetary policy will end six months earlier, by mid-2025.

United Kingdom

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

Today, the British Retail Consortium (BRC) published September data on consumer sentiment, which turned out to be weak: so, the households' assessment of the general economic situation for the next three months fell from ˗8.0 points to ˗21.0 points, the personal finance indicator – from 1.0 points to ˗6.0 points, and the personal expenditure index adjusted from 11.0 points to 10.0 points. Experts note that the deterioration of the indicators was facilitated by the new government's plans to reduce some benefits and increase tax collections. Recall that Chancellor of the Exchequer Rachel Reeves previously announced the cancellation of the annual fuel subsidy in the amount of 200.0 pounds for 10.0 million pensioners and warned that duties for businesses and individuals could be increased.

Japan

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

Investors are focused on the publication of the minutes of the Bank of Japan (BoJ) meeting: according to the document, two of the nine members of the regulator's board called for a further gradual increase in the cost of borrowing, and one of them said that the key rate could be significantly increased after confirming information that companies are increasing capital expenditure, wages, and product prices. However, most officials maintained a cautious stance, agreeing not to withdraw stimulus too quickly, since the pace of consumer price growth has not yet consolidated above the target level of 2.0%. The data from the minutes indicate that the timing of further tightening of monetary policy in the country remains uncertain.

Australia

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

The Reserve Bank of Australia (RBA) released its half-year Financial Stability Review today, which found that households, businesses and banks remained stable even in an environment of high interest rates and significant inflation. The share of borrowers experiencing severe financial stress is less than 2.0%. RBA officials expect the pressure on household budgets to ease as borrowing costs fall. However, the regulator cautioned against taking on too much debt once the easing cycle begins.

Oil

Quotes today are under pressure from the Financial Times report on Saudi Arabia's decision to abandon its strategy of curbing exports in order to raise the price of “black gold” to 100.0 dollars per barrel in favor of producing large volumes and selling them at a lower price.

The Kingdom's officials have not commented on this information, but investor fears of an oversupply of the market have increased. It should be noted, however, that the fall in prices could have been more significant if it had not been limited by the Chinese authorities' decision to introduce new economic incentives and a reduction in oil product reserves in the United States. Recall that yesterday the Chinese government announced the issuance of new debt obligations for 2.0 trillion yuan to stimulate economic growth and return it to a rate of 5.0% per year. The report of the US Department of Energy's Energy Information Administration (EIA) published on Wednesday recorded a decrease in commercial oil reserves by 4.471 million barrels.