United States of America

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

Investors are focused on the publication of July data from the American labor market, which confirmed its cooling. Unemployment rose from 4.1% to 4.3%, and the average hourly wage slowed more than experts expected: from 0.3% to 0.2% MoM and from 3.8% to 3.6% YoY. In turn, employment increased by only 114.0 thousand, which was less than both the forecast of 176.0 thousand and the June figure of 179.0 thousand. Most new specialists were employed in the healthcare sector (55.0 thousand), the construction industry (25.0 thousand), and the public administration sector (14.0 thousand). Thus, the risks of consumer price growth are practically leveled, allowing the US Federal Reserve officials to continue reducing the cost of borrowing at the September meeting. Let us recall that at present, most market participants are counting on two or three adjustments of the indicator before the end of the year.

Eurozone

EUR is weakening against JPY but strengthening against USD and GBP.

In the absence of key economic releases, the euro's movement is driven by external factors. It is worth noting that investors are preparing for the publication of business activity data on Monday at 10:00 (GMT 2): the Services PMI is expected to fall from 52.8 to 51.9 points, and the Composite PMI – from 50.9 to 50.1 points. Experts note that the uptrend in the industry will continue further, but at a more moderate pace, which fully satisfies the conditions of the European Central Bank (ECB) for continued easing of monetary parameters.

United Kingdom

GBP is weakening against JPY and EUR but is strengthening against USD.

Investors are focused on the latest comments from the Bank of England's (BoE) chief economist, Huw Pill, who said that the fight against high inflation continues, and there is currently no guarantee that interest rates will be cut again at the next monetary policy meeting. The official also noted that despite progress in slowing the pace of consumer price growth, negative dynamics are still observed in the services sector, so it is too early to expect that the national economy has coped with the challenges. Recall that Pill's comments were made after the BoE's decision to adjust the cost of borrowing from 5.25% to 5.00%.

Japan

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

Market participants are assessing the results of a survey conducted by Reuters on the current state of the national economy. Most of the leading economists point out that it managed to recover from the decline in the first quarter, primarily due to an increase in industrial production and domestic consumption. According to the average forecast, gross domestic product (GDP) growth in the second quarter could amount to 2.1% YoY, with private consumption increasing by 0.5% and capital expenditure by 0.9%. On Monday, market participants will pay attention to the minutes of the latest meeting of the Bank of Japan, during which the interest rate was adjusted from 0.10% to 0.25% and try to find hints in them about further actions of the financial authorities and the timing of a new tightening of monetary policy.

Australia

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

Today, data on the producer price index (PPI) for the second quarter was published: the indicator adjusted from 0.9% to 1.0% QoQ and from 4.3% to 4.8% YoY. Thus, the growth of both consumer and wholesale inflation has been confirmed in the Australian economy, which may become an argument for officials of the Reserve Bank of Australia (RBA) to raise interest rates again. However, most experts polled by Reuters think differently: they are confident that next week the regulator will keep the indicator at 4.35% and will continue to keep it there until at least the first quarter of 2025, and only after this period will a reduction in the cost of borrowing become possible.

Oil

The oil market is pressured by a likely decline in global demand for energy.

Recall that June data on business activity in the manufacturing sector recorded a significant decrease in all leading world economies – in the United States (from 48.5 points to 46.8 points), in China (from 51.8 points to 49.8 points), and in the Eurozone (from 45.8 points to 45.6 points), confirming the insufficient pace of global industry, which can lead to a reduction in oil and fuel consumption. Additional pressure on quotes was exerted by the results of the was exerted by the results of the last meeting of OPEC members, at which exporters confirmed that some participants in the deal would gradually abandon the previously accepted production cuts of 2.2 million barrels per day in the period from October 2024 to September 2025. However, this process can be suspended if market conditions require so. We should also note the publication of a study by Reuters experts, according to which the production of "black gold" in OPEC countries increased to 26.70 million barrels per day in July, 100.0 thousand barrels more than a month earlier. In general, the risks of increasing production while simultaneously reducing demand are likely to continue to put pressure on prices in the medium term.