United States of America

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

Investors are still focusing on the minutes of the last meeting of the US Fed presented yesterday. According to the document, most board members agreed that with further positive inflation data, easing the parameters at the next (September) meeting would be a reasonable step. The July data recorded a decrease in the consumer price index from 3.0% to 2.9% YoY. Now, the markets will focus on Friday’s speech by US Fed Chairman Jerome Powell at the Jackson Hole Economic Symposium to receive new signals regarding the timing and volume of interest rate adjustments. Also today, weekly data on the US labor market were published. Initial jobless claims increased by 232.0K, in line with forecasts but higher than the previous figure of 228.0K. The total claims reached 1.863K against 1.859K earlier, confirming the cooling of the sector, which is also a condition for the monetary policy adjustment.

Eurozone

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

Today, investors assessed preliminary August data on the EU business activity. The manufacturing PMI fell from 45.8 points to 45.6 points at the end of August, and the service PMI rose from 51.9 to 53.3 points. The composite PMI changed from 50.2 points to 51.2 points. Despite the strong statistics, the mood of experts remains quite reserved. They point out that the positive changes are mainly due to the increase in the French services sector during the Olympic Games, and this effect will be temporary. In general, the Eurozone economy remains under pressure, confirmed by the German manufacturing PMI falling from 43.2 points to 42.1 points, the service PMI from 52.5 points to 51.4 points, and the composite PMI from 49.1 points to 48.5 points. According to the minutes of the last meeting of the European Central Bank (ECB), published yesterday, the regulator’s policymakers did not see the need to reduce interest rates last month but hinted at the possibility of an adjustment in September since tight monetary policy has a negative impact on the pace of the economy.

The United Kingdom

GBP is strengthening its position against EUR, JPY, and USD.

Today, preliminary data on business activity in the UK for August were published. The manufacturing PMI rose from 52.1 points to 52.5 points, and the service PMI – from 52.5 points to 53.3 points, exceeding the forecast of 52.8 points, while the composite value changed from 52.8 points to 53.4 points instead of the expected 52.9 points. Thus, the activity of British businesses is recovering at a more serious pace than experts expected. In general, favorable conditions created in the British economy for further adjustment of monetary stimuli – its growth is strengthening, employment indicators are improving, and inflation is actively slowing. However, the pace of consumer prices in the services sector remains significant, which allows experts polled by Reuters to allow for only one interest rate cut this year: according to forecasts, the value will be consolidated around 4.50% by March next year, 4.25% by June, and 3.75% in the third quarter of 2025.

Japan

JPY is falling against EUR, GBP, and USD.

Today, preliminary data on business activity in Japan for August were published. The manufacturing PMI grew from 49.1 points to 49.5 points, failing to meet the forecast of 49.8 points, and remained in the stagnation zone. The service PMI changed from 53.7 points to 54.0 points, while the composite value was corrected from 52.5 points to 53.0 points with preliminary calculations of 51.4 points. Overall, business activity is actively recovering, and the rate of slowdown in the traditionally poor industrial sector is decreasing. Market participants will turn their attention to July inflation data on Friday, with the national CPI likely to rise to 2.9% from 2.8% YoY and the core CPI likely to rise to 2.7% from 2.6%, bolstering the Bank of Japan for monetary policy tightening.

Australia

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

Preliminary data on business activity in Australia for August were published today. The manufacturing PMI rose from 47.5 points to 48.7 points but remained in the stagnation zone. The services PMI grew from 50.4 points to 52.2 points, while the composite PMI corrected from 49.9 points to 51.4 points against the forecast of 49.6 points, confirming the positive dynamics of the recovery of the Australian economy.

Oil

Oil prices are trying to grow today, supported by a reduction in oil product inventories, as well as investors’ hopes for a quick change in the US monetary policy.

The report of the Energy Information Administration of the US Department of Energy (EIA), published yesterday, recorded a correction in the volumes of black gold by –4.649M barrels with preliminary forecasts of –2.000M barrels, while gasoline reserves decreased by 1.606M barrels, and distillates – by 3.312M barrels. In turn, the minutes of the July meeting of the US Fed confirmed the determination of the department’s officials to move to reduce the cost of borrowing, which in the future may act as a driver of economic growth and an increase in global demand for oil products. However, the upward dynamics of the quotes are still restrained by fears of a slowdown in the Chinese economy and the possibility of an imminent peace agreement between representatives of Israel and the Palestinian movement Hamas.