United States of America

USD is falling against EUR, GBP, and JPY.

The negative dynamics are developing against a decline in the producer price index and stable reports on the labor market. In addition, yesterday, 30-year Treasury bonds were trading at a rate of 4.015%, lower than the previous placement of 4.314%. It indicates a strong downward trend that began in mid-summer when US Fed officials began to speak more actively about the beginning of a change in the monetary course at the September meeting. The easing of monetary policy is reflected in bond yields, and its reduction from July to September includes an adjustment in the cost of borrowing by more than 25 basis points. After the publication of these statistics, analysts significantly revised their forecasts, and today, according to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of changing the interest rate by this amount is already 59.0%, down from yesterday’s 85.0%.

Eurozone

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

Markets are assessing yesterday’s decision by European Central Bank (ECB) officials to cut the interest rate by 60 basis points, from 4.25% to 3.65%. The regulator’s representatives justify it as inflation in most Eurozone countries has fallen to target levels. Thus, the August consumer price index in France adjusted to 0.5% MoM, below the expected 0.6%, and from 2.3% to 1.8% YoY, which has not been observed for a very long time and will certainly result in a decrease in the debt burden of households soon.

United Kingdom

GBP is falling today against EUR and JPY but is growing against USD.

Today, the UK Office for National Statistics published its traditional monthly study of economic activity and social changes in the first week of September. The total number of job advertisements increased in weekly terms but was 12.0% lower than in the same period last year. About 25.0% of enterprises reported a decrease in turnover in August, and 14.0% recorded a slight increase. The annual dynamics of fuel prices for enterprises amounted to –6.0%, 2.0 percentage points lower than the week before. As a result, the debt burden on businesses will remain. However, the indicator will decrease with the Bank of England’s interest rate adjustment.

Japan

JPY is strengthening against EUR, USD, and GBP.

The quotes are supported by the growth of industrial production in July from –4.2% to 3.1% against the forecast of 2.8%, the strongest since May’s 3.6%, while the capacity utilization indicator adjusted from –3.1% to 2.5%. Against this background, investors are more confident that the Bank of Japan will keep the interest rate at 0.25%. However, this week, the regulator’s representatives spoke in favor of further monetary policy tightening. Thus, a member of the board of directors of the Bank of Japan, Naoki Tamura, said that he expects the cost of borrowing to increase to at least 1.0% by the end of next year.

Australia

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

Investors are assessing the employment report in the tourism sector. 634.4K jobs were registered in the second quarter, 11.5K (1.8%) less than in the first quarter and 12.3K (2.0%) more than in the same period a year earlier. In total, there are 15.768M vacancies in the economy, 89.0K more than in the first quarter and 382.7K more than last year, against which it is noticeable that the tourism sector remains very weak. Thus, employment in sports and recreation services decreased by 12.6%, which is one of the main reasons for the negative dynamics in the industry.

Oil

Oil prices are compensating for the positions lost at the beginning of the week, trading above 72.00.

According to the International Energy Agency (IEA) report, the expected growth in oil supply was 0.6M barrels per day in 2024 and 2.1M barrels per day in 2025. OPEC published a more detailed assessment. According to its data, production in countries outside OPEC will increase by 1.2M barrels per day this year to 53.1M barrels per day, and American supplies – by 0.5M barrels per day. Next year, these regions can increase the figure by 1.1M barrels per day to 54.2 barrels per day. Positive dynamics are expected in the United States, Brazil, Canada, Norway, and a decrease in Angola. It is causing concern among OPEC members, and more and more experts believe the cartel can increase the oil production quotas.