United States of America

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

Today, the July data on wholesale inflation was published: the producer price index (PPI) fell from 0.2% to 0.1% MoM and from 2.7% to 2.2% YoY with preliminary estimates of 2.3%, while the base value decreased from 0.3% to 0.0% and from 3.0% to 2.4%, respectively. Tomorrow at 14:30 (GMT 2), investors will pay attention to the inflation statistics: if the consumer price index (CPI) remains at 3.0% YoY and the base indicator drops from 3.3% to 3.2%, then the US monetary authorities will have grounds to adjust the key rate in September immediately by -50 basis points, and in total to reduce it three times before the end of the year.

Eurozone

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

Today, the August data on business sentiment for the Eurozone and Germany from the Centre for European Economic Research (ZEW) were published, which turned out to be weak: the indicator for the Eurozone fell from 43.7 points to 17.9 points, significantly below the preliminary estimates of 35.4 points, and for the German economy – from 41.8 points to 19.2 points instead of 32.6 points, while the index of current economic conditions in Germany accelerated its negative dynamics from ˗68.9 points to ˗77.3 points. Commenting on these statistics, ZEW president Achim Wambach said that economic expectations continue to be affected by a high level of uncertainty due to ambiguous monetary policy, disappointing data on the US economy, and concerns about a possible escalation of the conflict in the Middle East.

United Kingdom

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

Investors are focused on the publication of June data on the labor market, which turned out to be unexpectedly strong. The unemployment rate fell from 4.4% to 4.2% against expectations of growth to 4.5%, employment increased by 97.0 thousand after 19.0 thousand a month earlier, while the average wage level excluding bonuses adjusted from 5.8% to 5.4% instead of the expected 4.6% and taking them into account – from 5.7% to 4.5%, confirming a significant excess of the Bank of England's targets, which contributes to the continued risks of increased inflation. The publication of these statistics may push officials to keep interest rates at previous levels, and currently most experts estimate the probability of easing monetary policy at only 30.0%.

Japan

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

Today, Japanese data on the corporate goods price index for July were published today: the indicator increased from 0.2% to 0.3% MoM and from 2.9% to 3.0% YoY, demonstrating the most rapid dynamics over the past eleven months, which fully satisfies the conditions of the regulator to increase the cost of borrowing. In addition, according to sources of the Reuters agency, the Japanese parliament will discuss the latest decisions of the regulator's officials next week and hear its head Kazuo Ueda. On July 31, the Bank of Japan raised the key rate from 0.10% to 0.25%, which, according to parliamentarians, along with weak US unemployment data, led to the largest drop in the NI 225 index since 1987. Politicians hope to discuss with financial authorities measures to prevent a similar situation in the future.

Australia

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

Today, August data on the consumer sentiment index from Westpac Banking Corp. was published: the indicator increased from ˗1.1% to 2.8%, significantly exceeding expectations of 0.5%. The negative dynamics are developing against the backdrop of the decision of officials of the Reserve Bank of Australia (RBA) to keep the key rate at the same level, which creates additional pressure on households. Market participants also paid attention to the data on changes in wages for the second quarter: the indicator remained at 4.1% QoQ and slowed from 0.9% to 0.8% YoY.

Oil

Oil prices are calm and are trading in narrow sideways ranges.

The weakening of investor activity is associated with the expectation of the publication of consumer inflation data on Wednesday, which may give the US Federal Reserve grounds for a significant reduction in interest rates in September, as well as the lack of escalation of the conflict between Iran and Israel, which experts have been expecting for the third week. Also today, the International Energy Agency (IEA) left its forecast for global oil demand growth in 2024 unchanged, but lowered its estimate for 2025, citing the impact of China's weakening economy. The agency's experts believe that this year the indicator will grow by 970.0 thousand barrels per day, and next year – only by 950.0 thousand barrels per day, which is 30.0 thousand barrels per day less than previously forecast. During the day, investors are awaiting the publication of weekly data on reserves from the American Petroleum Institute (API): last time they grew by 0.180 million barrels, and the continuation of this trend could put additional pressure on quotes.