United States of America

USD weakens against GBP, JPY, and EUR.

Over the past week, initial jobless claims increased by 227.0K, below both the forecast of 243.0K and the previous 242.0K, while the total claims increased from 1.869M to 1.897M. The labor market, while remaining under pressure, remains stable against the tight monetary policy of the US Fed. Meanwhile, the construction sector is weakening, with new building permits down 3.1% to 1.425M and existing home sales down 1.0% to 3.84M. According to the Beige Book released yesterday, economic activity little changed in September. However, companies noted a slight increase in hiring, a general decline in inflationary pressures, and input prices rising faster than the cost of goods sold, weighing on business profitability.

Eurozone

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

The October manufacturing PMI rose from 45.0 points to 45.9 points, exceeding the forecast of 45.1 points, the service PMI fell from 51.4 points to 51.2 points against 51.5 points, and the composite PMI increased from 49.6 points to 49.7 points, failing to justify the estimates of 49.8 points and remaining in the stagnation zone. However, in the German economy, the largest in the Eurozone, the manufacturing PMI rose from 40.6 points to 42.6 points, the service PMI from 50.6 points to 51.4 points, and the composite PMI from 47.5 points to 48.4 points. Overall, the statistics support the monetary policy easing by the European Central Bank (ECB). Yesterday, the head of the regulator, Christine Lagarde, called for caution regarding further adjustment of the interest rate, and the chief economist of the department, Philip Lane, noted that, despite the poor data, officials still expect the Eurozone economy to recover.

United Kingdom

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

The October preliminary manufacturing PMI sector fell from 51.5 points to 50.3 points, coming to the stagnation zone border, the service PMI – from 52.4 points to 51.8 points against the forecast of 52.3 points, and the composite PMI – from 52.6 points to 51.7 points, the low over the past eleven months. The negative dynamics are due to expectations of a significant tax increase in the new government budget and are intensified by the uncertainty caused by the Russian-Ukrainian and Middle Eastern conflicts, as well as the upcoming presidential elections in the United States. According to the Confederation of British Industry (CBI) survey, sentiment among British manufacturing companies is declining at the fastest rate in two years. From August to October, the indicator changed from –9.0% to –24.0%.

Japan

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

The preliminary October manufacturing PMI fell from 49.7 points to 49.0 points instead of the expected growth to 49.9 points, the service PMI – from 53.1 points to 49.3 points, entering the stagnation zone, and the composite PMI – from 52.0 points to 49.4 points, reflecting the risks of a slowdown in the national economy and reducing the likelihood of tightening monetary policy by the Bank of Japan. Thus, yesterday, the head of the regulator Kazuo Ueda said that it takes time to achieve sustainable inflation growth of 2.0%, which experts assessed as a hint of cautious actions to adjust the interest rate.

Australia

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

The manufacturing PMI has adjusted from 46.7 points to 46.6 points, the service PMI – from 50.5 points to 50.6 points, and the composite PMI – from 49.6 points to 49.8 points. The decline in the industrial sector is still offset by growth in the services sector. In addition, inflation risks remain, against which the Reserve Bank of Australia (RBA) officials refrain from switching to a cycle of easing monetary policy.

Oil

Oil prices are trying to grow, trading under the influence of several opposing factors.

Thus, geopolitical uncertainty in the Middle East is supporting prices. Experts believe that retaliatory attacks by Israel on Iranian infrastructure, including fuel, are still possible. The American administration is making every effort to prevent an escalation of the conflict before the US presidential elections. On the other hand, the positive dynamics are restrained by the data on oil reserves from the Energy Information Administration of the US Department of Energy (EIA). It reflected an increase in oil reserves by 5.474M barrels compared to the forecasts of 0.800M barrels, and gasoline reserves by 0.878M barrels. The distillate reserves decreased by 1.140M barrels.