United States of America

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

The September Institute for Supply Management (ISM) Manufacturing PMI was flat at 47.2 points, down from a projected 47.6, with the industry under pressure despite the start of the US Fed’s easing cycle. The August number of job openings reached 8.040M, down from a projected 7.640M. The Automatic Data Processing (ADP) Nonfarm Payrolls for September showed an increase of 143.0K, beating estimates of 124.0K, led by leisure and entertainment (34.0K), construction (26.0K), and education and health care (24.0K). The statistics confirm the stability of the labor market, increasing the likelihood of a further adjustment of interest rates by –25 basis points, as announced by the head of the regulator, Jerome Powell.

Eurozone

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

The August EU unemployment rate remained at 6.4%, where it has been for more than a year. Meanwhile, the Vice President of the European Central Bank (ECB), Luis de Guindos, said that the region’s economic growth in the short term might be slower than expected. However, its recovery would accelerate in the future, supported by an increase in real household incomes and monetary policy easing. Bank of Latvia Governor, Martins Kazaks, noted that the regulator’s officials have enough arguments in favor of further adjustment of interest rates at the October meeting against insufficient wage growth, declining corporate profits and a poor economic recovery in most European countries.

United Kingdom

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

The Bank of England’s quarterly report released today showed that global asset prices remain vulnerable amid rising geopolitical tensions. However, the country’s financial system remains stable as most households and businesses cope with high interest rates despite small businesses reporting some problems. Officials noted the positive impact of monetary easing, as it reduces the cost of mortgage payments and supports the growth of the housing market.

Japan

JPY is weakening against EUR, GBP, and USD.

Investors are focusing on comments from Japanese Prime Minister, Shigeru Ishiba, who said after a meeting with Bank of Japan Governor, Kazuo Ueda, that the economy was not yet in a position to raise interest rates. Japan’s new Economy Minister, Ryosei Akazawa, also urged the central bank to be cautious about further monetary policy tightening. He acknowledged that the current borrowing cost of 0.25% is below global standards but added that the country must do everything to solve the priority deflation problem. Previously, experts assumed that the newly formed government would support the course of abandoning economic incentives but these forecasts did not come true.

Australia

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

Today, September business activity data from American International Group Inc. (AIG) was published. The construction PMI increased from –38.1 points to –19.8 points, remaining in the red zone, and the manufacturing PMI fell from –30.8 points to –33.6 points. On Thursday, investors are waiting for August statistics on foreign trade. In July, exports increased by 0.7%, and imports decreased by 0.8%. If current trends continue, the trade balance surplus may increase, supporting the national currency.

Oil

Oil prices continue to rise amid growing geopolitical tensions in the Middle East and a reduction in oil reserves in the United States.

Yesterday’s missile attack by Iran on Israeli territory has increased the likelihood of a direct military clash between the countries: experts fear that in this case, the Iranian authorities may block the Strait of Hormuz, the main transport route for raw materials from the region, which will lead to supply disruptions. Analysts hope that the United States will make every effort to de-escalate the conflict. Meanwhile, the American Petroleum Institute (API) report reflected a decrease in strategic reserves by 1.458M barrels compared to forecasts of 2.100M barrels. Investors are awaiting the publication of data from the Energy Information Administration of the US Department of Energy (EIA): according to preliminary estimates, the indicator will be adjusted by –1.500M barrels, supporting the quotes.