United States of America

USD is strengthening against EUR and has ambiguous dynamics against GBP and JPY.

In October, the consumer price index increased from 2.4% to 2.6% YoY and remained at 0.2% MoM, and the core value remained at 0.3% MoM and 3.3% YoY, respectively, justifying forecasts. The biggest increase was in housing prices, a key high inflation driver. US Fed officials have already considered these statistics in their calculations, as they were expecting the implementation of the plans of the new White House administration and the economy’s reaction to it. The regulator may refuse to adjust the interest rate by –25 basis points in December and slow its decline next year, and it will reach 4.00–3.75% instead of the 3.0% expected earlier.

Eurozone

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

Investors are assessing comments from leading European Central Bank (ECB) policymakers. The Bank of Finland Governor Olli Rehn said that protectionist rhetoric from US President-elect Donald Trump will have negative consequences for the global economy. However, the ECB needs to continue easing monetary policy, the speed of which will depend on the forecast and dynamics of core inflation in the Eurozone. The official expects the deposit rate to reach a neutral level in late winter or early spring next year. Bank of France Governor Francois Villeroy de Galhau noted that consumer price growth will remain moderate, and the regulator will continue to adjust borrowing costs.

United Kingdom

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

Today, Bank of England Governor Catherine Mann said that inflation in the country will exceed the regulator’s forecasts in the medium term. Recall that Mann was the only department representative who voted against adjusting the interest rate at a meeting last week. The official noted that the trend towards accelerating growth in consumer prices continues, so it is worth keeping the cost of borrowing as long as possible. In the coming years, energy will most likely become more expensive, contrary to the calculations of some experts.

Japan

JPY has ambiguous dynamics against USD, EUR, and GBP.

The October corporate goods price index fell from 0.3% to 0.2%, higher than the forecast of 0.0% MoM, and increased from 3.1% to 3.4% instead of the expected 2.9% YoY, reaching a high since the beginning of the year against rising prices for rice and other food products, as well as non-ferrous metals and oil products. It introduces additional uncertainty to the Bank of Japan’s further actions. Inflation is growing but consumption remains at the same level, and business activity is under pressure. Most experts expect that the regulator will move to tighten monetary policy only next year, although the likelihood of adopting these measures in December remains.

Australia

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

Today, Q3 wage changes were published. The index remained at 0.8% instead of the expected growth of 0.9% QoQ and fell from 4.1% to 3.5% compared to the forecast of 3.6% – YoY, reflecting the trend of weakening inflationary pressure in the economy and confirming the preliminary estimates of the Reserve Bank of Australia (RBA) about the indicator reaching 3.4% this year and 3.2% next year. Let us recall that most experts do not expect the regulator to start cutting interest rates before spring.

Oil

The morning growth of oil prices gave way to a decline under pressure from a reduction in OPEC global oil demand forecasts. The cartel experts expect that the indicator will grow by 1.82M barrels per day this year instead of 1.93M barrels per day and by 1.54M barrels in 2025 compared to 1.64M barrels per day expected earlier.

On the other hand, the negative dynamics are limited by the likelihood of the appointment of Senator Marco Rubio, known for his “hawkish” position towards Iran, as the US Secretary of State. In this case, Iran will be subject to new sanctions, limiting the oil supply. At 23:30 (GMT 2), investors will pay attention to the American Petroleum Institute (API) oil reserves report. According to preliminary estimates, the indicator will increase by 1.0M barrels, putting pressure on the asset.