United States of America

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

Investors are focusing on the key for the US Fed price index of personal consumption expenditures. The July value increased from 0.1% to 0.2% MoM, meeting forecasts but remained at 2.5% instead of the expected growth to 2.6% – YoY. The core indicators remained at 0.2% and 2.6%, respectively, with preliminary estimates of 2.7%, while personal income in July adjusted from 0.1% to 0.2% and expenditure – from 0.3% to 0.5%, confirming the likelihood of the start of an easing cycle in monetary policy in September. Most experts are expecting three rate adjustments by the end of the year, with one of –50 basis points and two of –25 basis points.

Eurozone

EUR is strengthening against JPY and is ambiguous against USD and GBP.

The August EU CPI increased from 0.0% to 0.2% MoM and fell from 2.6% to 2.2% YoY. The core indicator adjusted from –0.2% to 0.3% MoM and from 2.9% to 2.8% YoY, reaching a three-year low and allowing further rate cuts by the European Central Bank (ECB) in September despite the rise in service prices caused by the Paris Olympics. Isabel Schnabel, a member of the Fed’s board, said the latest data were in line with the Fed’s core case scenario of sustainably achieving the 2.0% target by the end of 2025.

United Kingdom

GBP is strengthening against JPY and is ambiguous against USD and EUR.

According to the Nationwide Building Society, house prices fell 0.2% MoM in August, compared with a forecast of 0.2%, for the first time since April, and rose from 2.1% to 2.4%, compared with a forecast of 2.9%. Commenting on the situation, Robert Gardner, the agency’s chief economist, said the property market remains subdued. However, it is coping with the effects of the Bank of England’s tight monetary policy, and activity will continue to recover as it is easing. Meanwhile, in July, consumer lending adjusted from 0.869M pounds to 1.215M pounds, mortgage lending from 2.63M pounds to 2.79M pounds, and net loans to individuals from 3.494M pounds to 4.001M pounds, supporting the national economy.

Japan

JPY weakens against EUR, GBP, and USD.

The August Tokyo metropolitan consumer price index considered a leading indicator, rose to 2.6% YoY from 2.2%. The core figure rose to 2.4% from 2.2%, as inflationary pressures have been growing for the fourth month, exceeding the Bank of Japan’s 2.0% target and raising the possibility of an early monetary tightening by the central bank, according to a statement by Bank of Japan Governor Kazuo Ueda. Today, July industrial production data was released, corrected by 2.8%, not meeting the forecast of 3.6%. Retail sales added 2.6% compared to the estimates of 2.8%.

Australia

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

July mortgage lending increased from 0.4% to 0.5%, and the indicator of private lending slowed from 0.6% to 0.5%. Retail sales were 0.0% instead of the expected growth of 0.3%. Thus, the national economy remains under pressure from inflation. As a result, the Reserve Bank of Australia (RBA) may completely abandon the new tightening of monetary policy and keep the current interest rate in the long term.

Oil

Oil prices are correcting downwards under the influence of several opposing factors. Pressure on the quotes is exerted by reports from Reuters’ sources that OPEC participants intend to implement the planned increase in raw material production from October since supply disruptions in Libya and promises by some cartel members to reduce volumes to compensate for overproduction offset the impact of poor global demand. On the other hand, the negative dynamics are restrained by the ongoing crisis with supplies from Libya and the recovery of the American economy, as the Q2 gross domestic product (GDP) increased by 3.0%.