United States of America

USD is strengthening against EUR, JPY, and GBP.

Investors are focusing on comments from leading US Fed officials: on Friday, Atlanta Federal Reserve Bank Governor Raphael Bostic supported a cautious reduction in interest rates this year and next to a neutral range of 3.0–3.5%, which should allow inflation to be steadily brought to the target level of 2.0%, preventing the development of a recession, and added that further easing of monetary policy would be possible only if consumer price growth continues to slow, the labor market remains stable and production increases. The official expects that the regulator will adjust the cost of borrowing once this year by –25 basis points, while most experts expect two reductions of 25 basis points.

Eurozone

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

In September, the German producer price index fell from 0.2% to –0.5% MoM, beating the forecast of –0.2%, and from –0.8% to –1.4% YoY instead of –1.0%, amid a 6.6% drop in energy prices: the slowdown in the indicators increases the likelihood of continued monetary easing by European Central Bank (ECB) officials. Meanwhile, today, the Chairman of the Board of the Bank of Lithuania, Gediminas Simkus, said that the regulator will continue to cut interest rates to the natural range of 2.0–3.0%. However, if inflation consolidates above target levels, borrowing costs should be adjusted even more. The head of the National Bank of Slovakia, Peter Kazimir, noted that consumer price growth in the Eurozone may soon return to the required levels. However, more evidence of the sustainability of disinflationary processes is needed to continue the “dovish” course.

United Kingdom

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

In October, according to research company Rightmove Group Ltd., house prices slowed their growth from 0.8% to 0.3% MoM and from 1.2% to 1.0% YoY amid a 12.0% increase in the supply of properties, as well as buyers’ reticence to spend pending the release of the new government budget and clarity on the size of the tax burden planned in it. Nevertheless, the agency’s analysts note that activity in the national construction sector is increasing, and the industry’s recovery may begin after the next adjustment of interest rates by the Bank of England.

Japan

JPY is weakening against EUR, GBP, and USD.

Investors are looking ahead to Friday’s release of the latest key data before the Bank of Japan’s meeting at the end of the month, with preliminary estimates for the Tokyo metropolitan CPI to fall to 2.1% from 2.2% YoY and the core CPI to fall to 1.8% from 2.0%, below the central bank’s target, which could see policymakers back off from tightening monetary policy and leave interest rates on hold.

Australia

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

Meanwhile, Reserve Bank of Australia (RBA) Deputy Governor Andrew Houser said policymakers were not expecting the latest employment data, which has returned to positive territory after a brief period of weakness, adding that policymakers remain prepared to respond to changes in the economic outlook in either direction, meaning they can cut or raise borrowing costs as appropriate. In addition, Hauser noted that, most likely, the interest rate in Australia would not be adjusted as quickly as in other developed countries.

Oil

Oil prices have resumed moderate growth.

The quotes are supported by the reduction of the core lending rate by the People’s Bank of China from 3.35% to 3.10%, which should contribute to the recovery of the national economy and an increase in oil demand. Recall that the Q3 gross domestic product (GDP) of China grew by 0.9%, a low since the beginning of 2023, causing concerns among investors. On the other hand, a significant increase in oil price is hindered by the report of the Energy Information Administration of the US Department of Energy (EIA), according to which weekly production at American fields last week increased by 100.0K barrels per day to a record 13.5M barrels per day.