United States of America

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

Investors are focused on comments from US Federal Reserve officials made after the publication of positive September labor market statistics. Today, Fed Governor Adriana Kugler said that the sector is cooling but remains resilient, and confirmed that further reduction in borrowing costs would be appropriate if inflationary pressures in the economy continue to decline. New York Federal Reserve Bank (FRB) President John Williams told the Financial Times that he is not opposing further easing of monetary policy, but confirmed the opinion of US Fed Chairman Jerome Powell that the size of the new adjustment to the key rate will be less than 50 basis points, as did his colleague from the St. Louis FRB Alberto Musalem, who said that the economy is “close to recovery”.

Eurozone

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

Today, August data on industrial production in Germany was published, which turned out to be positive: thanks to the growth in the output of automobile products and spare parts, the indicator increased by 2.9% against preliminary estimates of 0.8%. However, experts are inclined to explain the August acceleration by seasonal factors and do not expect a significant recovery from the sector soon. It is also worth noting the comments of officials of the European Central Bank (ECB), confirming the lack of a unified position among them. So, the President of Bundesbank Joachim Nagel said that he is ready to consider the possibility of another reduction in interest rates at the next meeting of the regulator, since economic growth in Germany in the second half of the year will be weak, while the Austrian central bank Governor Robert Holzmann, on the contrary, noted the need for cautious actions in further easing of monetary policy, since inflation has not yet been completely defeated. However, most experts are inclined to believe that the ECB will still cut interest rates by 25 basis points on October 17, and then repeat this reduction in December.

United Kingdom

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

Today, the British Retail Consortium (BRC) released its September store retail sales data: thanks to growth in demand for non-food products, the figure increased by 1.7% YoY, compared to expectations of 0.8%. Also today, the British Chambers of Commerce (BCC) released the results of a survey of companies, which turned out to be negative: 48.0% of respondents from 5,152 business representatives are pessimistic about their economic prospects due to the likely tax increases by the new government, while previously no more than 36.0% supported this opinion.

Japan

JPY has ambiguous dynamics against its main competitors – EUR, GBP, and USD.

Household spending data for August was released today: MoM, it grew by 2.0% against the expected 0.5%, and YoY, it fell by 1.9% against preliminary estimates of ˗2.6%. These statistics indicate that the preconditions for further acceleration of inflation and a new tightening of monetary policy by the Bank of Japan remain. It is also worth noting the comments of the new Minister of Economy Ryosei Akazawa, who said that the government fully trusts the regulator’s decision on how soon to raise interest rates again, even though maintaining a soft monetary policy remains a preferable scenario for policymakers.

Australia

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

Investors are focused on the publication of the minutes of the Reserve Bank of Australia (RBA) meeting, according to which the regulator intends to keep interest rates at a 12-year high until it is confident that inflation is moving sustainably towards the target range of 2.0–3.0%. Board members discussed scenarios under which monetary policy should be kept at restrictive levels for an extended period or tightened further. However, most of them concluded that, given the uncertain economic outlook, the key rate should be kept at 4.35%.

Oil

Oil prices are pressured today due to the restrained position of the Israeli authorities, who have not yet responded to the Iranian missile attack that took place last week.

Many experts expected that on October 7, the anniversary of the Hamas attack on Israel, the IDF would target Iranian oil infrastructure, but this did not happen, which helped to reduce fears of disruptions in oil supplies from the region. During the day, investors are waiting for the publication of weekly data on oil reserves from the American Petroleum Institute (API): the figure may increase by 1.950 million barrels. In this case, pressure on quotes will increase.