United States of America

USD is weakening today against all its main competitors – EUR, GBP, and JPY.

Neutral reports on the labor market and the producer price index (PPI) did not allow quotes to continue their confident upward dynamics. So, the number of initial jobless claims adjusted from 228.0 thousand to 230.0 thousand, which contributed to an increase in the total number of citizens receiving assistance from the state, from 1.845 million to 1.850 million. The PPI increased in August from 0.1% to 0.2% MoM and slowed from 2.2% to 1.7% YoY, reflecting a slowdown in the rate of industrial inflation. Against this background, the probability of a cut in the key rate by 25 basis points, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, reached 85.0%.

Eurozone

EUR is strengthening against GBP and USD but has negative dynamics in pair with JPY.

Today, the European Central Bank (ECB) held a meeting, the result of which, despite meeting forecasts, increased volatility in the market: the regulator really decided to reduce the key rate by 60 basis points at once, from 4.25% to 3.65%, and the deposit and margin rates were adjusted from 3.75% to 3.50% and from 4.50% to 3.90%, respectively. Probably, the determining factor for officials was the inflation report in Spain, which recorded zero dynamics of the consumer price index in August, which led to a slowdown in the annual indicator from 2.8% to 2.3%.

United Kingdom

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

The pound quotes remain under pressure from the Gross Domestic Product (GDP) report: MoM, the indicator was fixed at zero, but YoY, it accelerated from 0.7% to 1.2% with a forecast of 1.4%. Since the risks of the national economy plunging into recession have been practically leveled, Bank of England (BoE) officials may decide to cut the interest rate by 25 basis points at the September meeting. In turn, industrial production volumes decreased by 0.8% MoM after a correction of 0.8% in the previous month with preliminary estimates of 0.3%, and from -1.4% to ˗1.2% YoY, which turned out to be significantly worse than market expectations of ˗0.2%.

Japan

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

Ahead of the Bank of Japan's (BoJ) meeting scheduled for next Friday, investors are closely monitoring the rhetoric of the financial authorities for signals about further steps in the area of monetary policy. So, yesterday board member Junko Nakagawa said that current interest rates are quite low, and officials still have room to tighten parameters in the future if the economy and inflation develop in accordance with forecasts; and today BoJ board member Naoki Tamura said that the rate should be raised to at least 1.0% to compensate for the difference with the US rate.

Australia

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

The Australian currency is adjusting in a sideways trend amid the absence of important macroeconomic publications. On September 24, the Reserve Bank of Australia (RBA) will hold a meeting, and experts expect the regulator to keep the key rate at 4.35% for the eighth time in a row. The situation in the country's economy does not allow for a reduction in the cost of borrowing, since unemployment is at annual highs, and consumer prices are also still quite high: today the Melbourne Institute published data on expected inflation for September, which amounted to 4.4%, only slightly below 4.5% earlier.

Oil

Oil prices are adjusting after the publication of the Energy Information Administration (EIA) inventory report, which showed an increase of 0.833 million barrels after a correction of -6.873 million barrels the week before.

Today, the International Energy Agency (IEA) published its September report on the situation on the energy market, according to which in August almost all OPEC countries violated production quotas, producing much more oil than planned – 41.46 million barrels, 920.0 thousand barrels above the quota of 40.54 million barrels. Countries outside the cartel produced 14.09 million barrels, 1.51 million barrels above the quota. Against this backdrop, the IEA expects oil supply to grow by 0.6 million barrels per day this year and by 2.1 million barrels per day in 2025, which could create a significant surplus even if production curbs are carried over into next year.