United States of America

USD is weakening against EUR and GBP but has ambiguous dynamics against JPY.

Investors assess October labor market data. Unemployment remained at 4.1%, and average hourly earnings accelerated from 0.3% to 0.4% MoM and from 3.9% to 4.0% YoY but employment fell from 223.0K to 12.0K, the lowest since December 2020, compared to the forecast of 106.0K. Experts note that the weakening of the indicator is due to temporary factors – protests at the Boeing Co. plants and the aftermath of hurricanes Helena and Milton. US Fed officials are also unlikely to take the latest statistics into account and will not abandon the interest rate cut by 25 basis points at the meeting on November 7.

Eurozone

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

According to a survey by the consulting group Ernst & Young Global Ltd., 45.0% of industrial enterprises in the German economy, the largest in the Eurozone, intend to expand their activities abroad, while only 13.0% of them are ready to continue working in the country, while 29.0% of companies plan to place their headquarters outside Germany, compared to 4.0% intending to manage from within. Two-thirds of the surveyed managers said they expect job losses in the national economy in the coming years. Experts also note that German entrepreneurs are negative about the outlook, noting bureaucratic requirements and the government’s political decisions.

United Kingdom

GBP is strengthening against USD, EUR, and JPY.

The currency is supported by the presentation of the new British government budget, the implementation of which, according to experts, may cause new inflation growth, because of which the Bank of England officials will refuse to ease monetary policy. Thus, before the speech of the Minister of Finance Rachel Reeves, almost all analysts believed that next week the regulator would adjust the interest rate by –25 basis points but now the probability of this has decreased to 80.0%. The Goldman Sachs Group Inc. experts assume that the interest rate will remain at the same level. Meanwhile, according to the British construction society Nationwide Building Society, the September housing price index fell from 0.6% to 0.1% MoM against the forecast of 0.3% and from 3.2% to 2.4% YoY against 2.8%. The department’s specialists note that the construction market remains stable and can recover if the “dovish” monetary policy is maintained. The manufacturing PMI fell to 49.9 from 51.5, entering stagnation for the first time since April.

Japan

JPY is weakening against GBP and is ambiguous against EUR and USD.

The September manufacturing PMI fell to 49.2 from 49.7 against a forecast of 49.0 points, as the sector slowed fastest in three months, weighed down by poor external and domestic demand. Meanwhile, today, the government revised its preliminary estimate for gross domestic product (GDP) growth for the current financial year from 0.9% to 0.7%, as weaker exports are holding back economic recovery.

Australia

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

The October manufacturing PMI increased from 46.7 points to 47.3 points, remaining in the stagnation zone under pressure from high interest rates of the Reserve Bank of Australia (RBA) and significant inflation growth. Thus, the Q3 producer price index fell from 1.0% to 0.9% MoM and from 4.8% to 3.9% YoY, slower than expected. The indicators have not yet reached the regulator’s target range of 2.0–3.0%, preventing officials from moving towards monetary policy easing.

Oil

Oil prices are attempting to grow amid media reports that Iran is preparing a new missile attack, which could aggravate the situation in the region, increasing the risks of oil supply disruptions from the region.

On the other hand, more rapid dynamics are hampered by poor October data on the US labor market, which may reflect a weakening economy and a decrease in oil demand.