United States of America

USD is strengthening against EUR and JPY but is weakening in pair with GBP.

Today, statistics on the labor market and retail sales were published. The number of initial jobless claims amounted to 241.0 thousand, which was less than the previous figure of 260.0 thousand, while the total number of citizens receiving assistance from the state increased from 1.858 million to 1.867 million with preliminary estimates of 1.870 million. Thus, the labor market demonstrates resistance to the current “hawkish” course of the US Federal Reserve, reducing the likelihood of its sharp easing. The volume of retail sales in September increased by 0.4% with expectations of 0.3%, and the indicator excluding cars, gasoline, building materials, and food services increased by 0.7%. Analysts note that demand from citizens is supported by the continuing strengthening of the economy and the spending of previously accumulated savings. The increase in consumer spending also prevents the adjustment of monetary policy by the regulator.

Eurozone

EUR is weakening against USD and GBP but is strengthening in pair with JPY.

Investors are focused on the results of the European Central Bank (ECB) meeting, at which the regulator adjusted the cost of borrowing for the third time this year: the key rate was reduced from 3.65% to 3.40%, the marginal rate from 3.90% to 3.65%, and the deposit rate from 3.50% to 3.25%. In the accompanying statement, officials indicated that the disinflation process is proceeding according to plan, and the decline in prices is facilitated by a reduction in economic activity indicators. However, the regulator noted that wages are growing at an accelerated pace, which is slowing the decline in inflationary pressure. Also released today were data on the consumer price index (CPI) for September, which showed a further decline: the indicator fell from 0.1% to ˗0.1% MoM and from 2.2% to 1.7% YoY with preliminary estimates of 1.8%.

United Kingdom

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

Investors are still focused on the publication of September inflation data: the CPI fell from 0.3% to 0.0% MoM instead of the expected 0.1% and from 2.2% to 1.7% YoY with a forecast of 1.9%. A more significant than expected slowdown in the rate of growth of consumer prices increases the likelihood of an early reduction in interest rates by the Bank of England: according to experts, the probability of a reduction in the cost of borrowing by 25 percentage points at the regulator's November meeting is 85.0%. Nevertheless, analysts are confident that the pace of easing monetary policy in the UK will be less significant than in the US or the EU, since inflation is considered more stable here. In the medium term, pressure on the pound is coming from the government's upcoming budget, scheduled for late October: British businesses are wary of major tax increases and are already planning to cut investment in development to offset these costs.

Japan

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

The yen is pressured amid the publication of weak foreign trade data for September: the volume of exports fell by 1.7% instead of the expected growth of 0.5%, and the volume of imports grew by 2.1%, falling short of the forecast 3.2%, while the trade balance deficit narrowed, but still amounted to 294.3 billion yen against expectations of 237.6 billion yen. The current decline in exports was the first in the last 10 months, and experts fear that the situation will worsen due to the weakness of the PRC economy: in September, shipments there fell by 7.3%, and to the US – by 2.4%.

Australia

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

September data on the Australian labor market were published today, which turned out to be positive: employment increased sharply by 64.1 thousand, with a forecast of 25.2 thousand and an August value of 42.6 thousand, while unemployment remained at 4.1% instead of the expected growth to 4.2%. Thus, the labor market again demonstrated resistance to the current tight monetary policy of the RBA, which significantly reduces the likelihood of its mitigation starting this year. According to experts, the probability of starting to reduce the cost of borrowing in December of this year does not exceed 30.0%, and in 2025 it's about 75.0%.

Oil

Oil prices are trading in narrow sideways ranges: quotes are supported by the yesterday publication of the weekly report on reserves from the American Petroleum Institute (API), and their growth is limited by the easing of tensions in the Middle East.

According to the API report, oil reserves in the United States fell by 1.580 million barrels instead of the expected growth of 3.200 million barrels. However, since Israel, despite repeated threats, has not yet launched retaliatory missile strikes on Iranian infrastructure, the likelihood that they may not happen at all increases, and the supply of petroleum products from the region will not be affected. During the day, the publication of the weekly report on oil reserves from the Energy Information Administration of the US Department of Energy (EIA) is also expected: the figure may increase by 1.800 million barrels. In this case, prices will come under additional pressure.