United States of America

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

Investors are focusing on the August ISM Manufacturing PMI, which fell from 46.8 to 47.2 versus the forecast of 47.5, as the industry has been under pressure for the fifth month amid falling new orders and rising inventories at enterprises. Business representatives note that raw material and component prices have been rising for the third month. The recovery in indicators should be facilitated by the expected easing of monetary policy by the US Fed at its September meeting. Today, the July JOLTS job openings data was released, showing a decline to 7.673M, confirming further weakening of the labor market and increasing the likelihood of a significant rate cut. Also during the day, the Fed’s Beige Book economic review is due, reflecting the current economic situation in American regions.

Eurozone

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

In August, the Eurozone service PMI increased from 51.9 points to 52.9 points, compared to the forecast of 53.3 points, and the composite PMI increased from 50.2 points to 51.0 points, less than the expected 51.2 points, while the German service PMI fell from 52.5 points to 51.2 points and the composite PMI from 49.1 points to 48.4 points. Experts note that the industry is recovering after the Olympic and Paralympic Games in Paris but fear a resumption of the decline after their completion since domestic demand remains poor overall. The July producer price index rose from 0.6% to 0.8% MoM instead of the expected 0.3% and from 0.33% to –2.1% YoY. Overall inflation in the Eurozone is slowing, increasing the likelihood of monetary policy easing by European Central Bank (ECB) officials. Thus, the president of the German Federal Bank, Joachim Nagel, said in an interview with the FAZ newspaper that the wave of inflation in the Eurozone has ended but he had not yet decided whether to vote for an adjustment in interest rates in September or not.

United Kingdom

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

In August, the services PMI increased from 52.5 points to 53.7 points, above the forecast of 53.3 points, and the composite PMI increased from 52.8 points to 53.8 points, exceeding the expected 53.4 points. The indicators are growing at the fastest pace since April, which experts associate with the change of government in the country. Business representatives also noted that company costs and selling prices for products increased slightly, which increases the likelihood of another interest rate cut by the Bank of England soon.

Japan

JPY is strengthening against EUR, GBP, and USD.

In August, the service PMI remained at 53.7 points instead of the expected growth of 54.0 points, and the composite PMI increased from 52.5 points to 52.9 points, below the forecast of 53.0 points. The indicators are growing significantly, reflecting the economic recovery and increasing the likelihood of further monetary tightening by the Bank of Japan. Thus, most experts expect that by the end of the year, officials will increase the cost of borrowing at least once.

Australia

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

The Q2 gross domestic product (GDP), as expected, increased by 0.2% QoQ and decreased from 1.3% to 1.0% YoY, which experts attribute to high interest rates of the Reserve Bank of Australia (RBA) and stable inflation, putting pressure on consumer demand. Household spending decreased by 0.2%, and in these conditions, government spending remains the main stimulus for economic development. However, the August business activity data supported the national currency. The service PMI changed from 50.4 points to 52.5 points, exceeding the forecast of 52.2 points, and the composite PMI – from 49.9 points to 51.7 points.

Oil

The morning growth of oil prices gave way to a decline under the influence of opposing factors.

Pressure on the dynamics is exerted by reports of the imminent end of the political conflict in Libya, after which the closed fields will resume work, restoring production volume to 959.0K barrels per day. At the same time, the prospects for global demand for oil products are causing concern among investors. Thus, the American manufacturing sector has been slowing down for several months. On the other hand, a significant drop in prices is hampered by information from Reuters sources, according to which the OPEC group of producers has begun to discuss the possibility of postponing the planned increase in hydrocarbon production in October. During the day, traders are awaiting the publication of the weekly report on oil reserves from the American Petroleum Institute (API). According to preliminary estimates, the indicator will decrease by 0.900M barrels, supporting oil prices.