United States of America

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

Today is a holiday in the United States, so financial institutions are closed, and investor activity is reduced. The market remains focused on the data on personal consumption expenditure for October, published yesterday: MoM, the indicator remained at 0.2%, and YoY, it increased from 2.1% to 2.3%, while the core index fixed at 0.3% and adjusted from 2.7% to 2.8%, respectively. These statistics confirm the increase in inflationary pressure, which, along with the growth of gross domestic product (GDP) in the third quarter by 2.8%, restrains the regulator's ability to significantly adjust monetary policy. Currently, most experts expect that US Federal Reserve officials will still cut the key rate by 25 basis points in December, but at the beginning of next year, there will probably be a pause in the “dovish” cycle to assess the impact of the first economic steps of the new US administration on the dynamics of consumer prices.

Eurozone

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

Preliminary inflation data for Germany for November was published today: MoM, the consumer price index (CPI) fell from 0.4% to ˗0.2%, but YoY, it rose from 2.0% to 2.2% against preliminary estimates of 2.3%. Experts believe that these statistics are unlikely to become a reason for refusing to cut interest rates at the December meeting of the European Central Bank (ECB). Next year, the pace of monetary easing may slow down amid uncertainty caused by new trade tariffs from the administration of US President-elect Donald Trump, but the overall volume of borrowing cost reduction in the Eurozone will most likely be 150 basis points, exceeding the same figure for the US or UK. Also released today were Eurozone lending data for October, which were positive, with business lending rising from 1.1% to 1.2% and household lending growing from 0.7% to 0.8%, giving investors hope that the region's economy will soon begin to recover.

United Kingdom

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

Today, the Confederation of British Industry (CBI) released November data on business sentiment in the services sector, which turned out to be negative: the index for consumer sector enterprises fell from ˗19.0 points to ˗55.0 points, the lowest level since August 2022, and the indicator for companies providing business and professional services fell from 9.0 points to ˗29.0 points. CBI experts point out that the negative dynamics are accelerating against the backdrop of tax increases planned in the new state budget from the Labor government, as consumer services companies will have to pay about 25.0 billion pounds. These data increase the likelihood of a slowdown in economic growth and may provide grounds for easing monetary policy by the Bank of England.

Japan

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

According to a statement today by the Japanese Trade Union Confederation (Rengo), at the traditional spring negotiations with employers next year, the organization intends to demand a wage increase of 5.0% for large and medium-sized companies and 6.0% for small businesses. The implementation of these plans will contribute to a further sustainable increase in price pressures, which the Bank of Japan (BoJ) needs to continue tightening monetary policy. On Friday, investors are awaiting the publication of November inflation data in the Tokyo metropolitan area: YoY, the consumer price index (CPI) may increase from 1.8% to 1.9%, and the core indicator – from 1.8% to 2.0%. The implementation of these forecasts will increase the likelihood of the regulator’s interest rate increase by 25 basis points in December.

Australia

AUD is strengthening against EUR, GBP, and JPY, but it has ambiguous dynamics in pair with USD.

Investors are focused on comments from Reserve Bank of Australia (RBA) Governor Michele Bullock, who said today that core inflation in the country is still too high to consider adjusting interest rates at upcoming meetings. According to the official, there is still a lot of work to do to stabilize consumer price growth in the target range of 2.0–3.0%, and it is unlikely to be achieved before 2026. Bullock indicated that the RBA will be able to move to reduce borrowing costs once core inflation falls below 3.0%, but this will take time.

Oil

Oil prices are rising amid another escalation in the Middle East, as well as data from the Energy Information Administration (EIA) of the US Department of Energy on reserves.

Today, the Israeli authorities announced that the Hezbollah paramilitary organization violated the terms of the ceasefire and again attacked southern Lebanon. Thus, the ceasefire agreement, mediated by the US and France, was respected for less than a day. According to the EIA report, last week, oil reserves in the US fell by 1.844 million barrels with preliminary estimates of ˗1.300 million barrels, while gasoline reserves increased by 3.314 million barrels, and distillates – by 0.416 million barrels. It is also worth noting that the OPEC members changed the date of the meeting from December 1 to December 5, but investors are still expecting the start date of the increase in oil production, originally planned for October, to be postponed, this time to February next year.