United States of America

USD weakens against EUR and GBP but strengthens against JPY.

At 19:55 (GMT 2), investors will turn their attention to the speech of the US Fed Chairman Jerome Powell, who will comment on the interest rate adjustment by –50 basis points and share his thoughts on the timing and size of the adjustment this year. Currently, most experts expect two more changes in the cost of borrowing, in November and December, with the former possibly amounting to 25–50 basis points and the latter – only 25 basis points. In addition, analysts note the risks of untimely steps since the “hawkish” policy could slow the growth of gross domestic product (GDP) to 1.8% next year, with unemployment likely to increase to 4.4%. However, inflation will remain at a low level of 2.1%.

Eurozone

EUR is strengthening against GBP, JPY, and USD.

The German consumer price index adjusted from –0.1% to 0.0% MoM and from 1.9% to 1.6% YoY, beating the forecast of 1.7%, while the harmonized indicator changed from –0.1% to –0.2% MoM and from 2.0% to 1.8% instead of the expected 1.9% YoY. Overall, inflationary pressures were the lowest since February 2021, confirming the likelihood of further monetary easing by the European Central Bank (ECB). Most experts now expect the indicator in the Eurozone to fall to 1.9% this month, below the target level, which will allow the regulator to cut the interest rate by 25 basis points at the October meeting.

The United Kingdom

GBP weakens against EUR but strengthens against JPY and USD.

The Q2 gross domestic product (GDP) adjusted by 0.5%, not meeting the forecasts of 0.6% QoQ and by 0.7% instead of 0.9% YoY. Nevertheless, experts saw several positive moments in these statistics. Thus, the household savings rate increased from 8.9% to 10.0%, which, combined with wage growth above inflation, helps maintain domestic demand and strengthen citizens’ confidence in economic prospects. The volume of business investment has strengthened for the third quarter, adding 1.4%, supporting the asset. In September, the Nationwide Building Society’s house price index accelerated from –0.2% to 0.7% MoM and from 2.4% to 3.2% YoY. The agency’s chief economist, Robert Gardner, noted that the positive dynamics are developing amid investors’ hopes for a further interest rate reduction by the Bank of England.

Japan

JPY is weakening against EUR, GBP, and USD.

The August industrial production fell by 3.3%, stronger than the expected 0.5%. The deterioration in the indicators was due to a 10.6% decrease in car production due to Typhoon Shanshan, which covered the country’s manufacturing regions, and a decrease in sales in the US. In addition, equipment production slowed by 18.7%. On the other hand, domestic retail sales increased by 2.8%, higher than the forecast of 2.6% and the previous figure of 2.7%. Over the weekend, Japan’s new Prime Minister, Shigeru Ishiba, said the country’s monetary policy should remain accommodative, suggesting that borrowing costs can remain low to support the economic recovery.

Australia

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

In August, mortgage lending slowed to 0.4% from 0.5%. However, private sector lending growth remained steady at 0.5%. The Australian government also announced today that it had achieved a second consecutive budget surplus, reaching 15.8B Australian dollars (10.91B American dollars) in the financial year ending in May.

Oil

Oil prices have fallen after a morning rally, with the sector still under several opposing factors.

Pressure on the asset is exerted by the possibility of Libyan oil returning to the market after the settlement of internal political contradictions in the country. Soon, production may again increase by 600.0K barrels per day. On the other hand, a significant drop in prices is prevented by the aggravation of the geopolitical situation in the Middle East. Experts do not rule out that after the liquidation of the leaders of the militant Lebanese organization Hezbollah and the Palestinian movement Hamas, Iran, one of the leading members of OPEC, may join the confrontation, which will increase the risks of interruptions in oil supplies from the region.