United States of America

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

Yesterday, the head of the Federal Reserve Bank of Richmond (FRB) Thomas Barkin, of Kansas City – Jeff Schmid, and of Chicago – Austan Goolsbee, agreed that the consumer price index has fallen enough to adjust interest rates soon. Barkin also noted that the significant cooling of the labor market is associated with a slowdown in the rate of hiring, not an increase in the number of layoffs. According to Schmid, the latest inflation data are encouraging and strengthen his confidence that it will soon reach the 2.0% target. The official also described the economy as resilient, consumer demand as strong, and the labor market as still “fairly healthy.” Austan Goolsbee reiterated that he considers the current monetary policy too tight and can harm the national economy. Although none of the department’s representatives indicated the timing and volume of the upcoming reduction in borrowing costs, most experts are inclined to believe that it will happen in September and could amount to 50 basis points at once.

Eurozone

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

Today, July data on inflation in the German economy was published, which justified forecasts. The consumer price index changed from 0.1% to 0.3% MoM and from 2.2% to 2.3% YoY, and the harmonized indicator changed from 0.2% to 0.5% MoM and from 2.5% to 2.6% YoY, respectively, as a result of which consumer prices could rise across the region. The data raises the possibility that the European Central Bank (ECB) will postpone further interest rate adjustments, although most experts expect monetary easing to continue in September.

United Kingdom

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

Investors are preparing for the publication of macroeconomic data next week. The June unemployment rate may increase from 4.4% to 4.5%, with employment falling by 35.000 and the dynamics of average wages, including bonuses, from 5.7% to 4.5%, showing signs of a cooling labor market. In July, the consumer price index, according to preliminary estimates, will adjust from 2.0% to 2.3% YoY, and the core indicator from 3.5% to 3.4%, in line with the Bank of England’s calculations, as a result of which the regulator’s officials will continue the cycle of interest rate cuts.

Japan

JPY is strengthening against EUR, GBP, and USD.

Yesterday, a 7.1-magnitude earthquake hit southwest Japan, which could have caused significant damage to infrastructure. On Tuesday, investors are awaiting the publication of July data on the corporate goods price index. According to preliminary estimates, the indicator will increase from 0.2% to 0.3% MoM and from 2.9% to 3.0% YoY. The implementation of forecasts will confirm the increase in inflationary pressure in the economy, as a result of which Bank of Japan officials may continue to tighten monetary policy.

Australia

AUD is weakening against EUR, JPY, GBP, and USD.

On Thursday, investors are awaiting the publication of July data from the labor market. According to preliminary estimates, unemployment will remain at 4.1%, and full employment will slow down from 50.2K to 26.5K. In general, the sector remains stable in the current monetary policy of the Reserve Bank of Australia (RBA), against which the regulator’s officials may move to a long-term maintenance of interest rates or their increase.

Oil

Morning growth was replaced by a decline in the quotes.

Pressure on prices is exerted by fears of a decline in the global economy, primarily due to a slowdown in growth in China and the United States, which could significantly reduce oil product demand. In addition, negative factors include the July excess of oil production quotas by the Russian Federation under the OPEC deal. According to reports from the Ministry of Energy, it amounted to 67.0K barrels per day. Still, the officials promised to reduce production accordingly in August and September. Further weakening of the asset is hampered by ongoing tensions in the Middle East, as well as growing confidence in the stability of the American economy following a series of statements by leading US Fed officials.