United States of America

USD is weakening against EUR, JPY, and GBP.

The June employment growth changed from 218.0K to 206.0K, and unemployment changed to 4.1% against expectations of 191.0K and 4.0%, respectively, while average wages fell from 0.4% to 0.3% MoM and from 4.1% to 3.9% YoY. Thus, the sector is showing signs of cooling, and in this environment, the likelihood of the US Fed officials quickly turning “dovish” increases significantly. Most investors expect the first adjustment in borrowing costs by –25 basis points would be at the regulator’s September meeting.

Eurozone

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

The May industrial production in Germany fell by 2.5% MoM, while experts expected an increase of 0.2% and by 6.67% YoY, as a result of which analysts believe that a moderate recovery of the country’s economy will not begin until the end of the year. The EU retail sales adjusted from –0.2% to 0.1% MoM against forecasts of 0.2% and from 0.6% to 0.3% against 0.1% YoY. European consumers’ demand remains restrained under pressure from the European Central Bank’s (ECB) high interest rates.

United Kingdom

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

The general parliamentary elections in the UK ended yesterday, in which the Labour Party won a convincing victory. Thus, the government in the country will soon change, and the current Prime Minister, Rishi Sunak, will resign. Investors positively assessed the election results, hoping for the recovery of the British economy after stagnation under the long rule of the Conservative Party. Meanwhile, the June Halifax house price index fell from 0.0% to –0.2% MoM and remained at 1.6% YoY. The bank’s experts note that the housing market remains poor but may begin to recover at the end of the year when the Bank of England switches to “dovish” rhetoric.

Japan

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

The May household spending index fell by 0.3% MoM instead of the expected growth of 0.5% and by 1.8% compared to forecasts of 0.2% YoY. Experts believe the indicator will recover in the coming months as businesses begin to increase wages gradually. Overall, consumer activity in the country remains poor, which increases the likelihood of a prolonged refusal by Bank of Japan officials to tighten the monetary policy further.

Australia

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

At the beginning of the month, the low wage level increased by 3.75%. Experts fear that such a decision by the authorities could increase inflation, which accelerated to 4.0% in May, as a result of which officials of the Reserve Bank of Australia (RBA) will move to tighten monetary policy, especially since they already discussed such a scenario at their last meeting in mid-June.

Oil

Oil prices today have ambiguous dynamics and are trading in narrow sideways ranges. The current market stabilization looks temporary: investors are probably taking a break before the resumption of price growth, which is facilitated by the fundamental background. Investors are still hoping for the imminent start of easing the monetary policy of the US Fed, as the June data from the labor market published today confirmed its weakening and strengthened experts’ confidence in the possibility of reducing the cost of borrowing in September. Meanwhile, US fuel reserves are significantly decreasing, confirming the growth of demand for fuel in the leading world economy. In addition, long-term support for the quotes is provided by the ongoing geopolitical tensions in the Middle East, increasing the risks of supply disruptions. In these conditions, the resumption of growth in prices for black gold soon seems most likely.