KEY RELEASES

United States of America

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

Today, April data on the producer price index (PPI) were published: MoM, the indicator increased from -0.1% to 0.5% with a forecast of 0.3%, and YoY – from 1.8% to 2.2%, while the basic indicator was adjusted from -0.1% to 0.5% instead of 0.2% MoM, and from 2.1% to 2.4% YoY, respectively. Thus, businesses increase selling prices for their products, which can lead to an acceleration of inflation. We should also note the study published yesterday by the New York Federal Reserve Bank (FRB): the majority of respondents said that in a year they expect an average increase in consumer prices of 3.3% instead of 3.0%, as before; over a three-year period, the correction could be 2 .8%, which is slightly lower than the March forecasts of 2.9%, and over five years – 2.8% instead of 2.6%. Thus, household expectations have worsened, which creates a negative background on the market ahead of tomorrow's publication of the April consumer price index.

Eurozone

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

German April inflation data were published today: the consumer price index (CPI) increased from 0.4% to 0.5% MoM and remained at 2.2% YoY, while the harmonized indicator was fixed at 0.6% MoM and increased from 2.3% to 2.4% YoY, respectively. Statistics on economic sentiment from the Center for European Economic Research (ZEW) supported the position of the euro: the index for the Eurozone rose from 43.9 points to 47.0 points, exceeding expectations of 46.1 points, and the indicator for Germany – from 42.9 points to 47 .1 points with preliminary estimates of 44.9 points. The index of current business conditions in the German economy also showed positive dynamics from -79.2 points to -72.3 points. Overall, the level of business sentiment has reached a two-year high, which allows experts to hope that the pace of economic recovery in the region will accelerate.

United Kingdom

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

Investors are focused on the publication of March labor market data and comments from Bank of England officials. The unemployment rate increased from 4.2% to 4.3%, employment decreased by 177.0 thousand with preliminary estimates at ˗215.0 thousand, however, the average wage growth with bonuses remained at 5.7% instead of the expected 5.3%. Thus, the employment sector has shown signs of cooling, but risks of rising consumer prices due to wage correction remain. In this regard, it is worth highlighting the comments of the BoE Chief Economist Huw Pill who today said that the labor market is now quite strong, but the regulator may still consider lowering interest rates in the summer.

Japan

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

Today in Japan, April data on the price index for corporate goods was published: MoM, the indicator increased from 0.2% to 0.3%, and YoY, it remained at 0.9%. Rising prices for corporate goods may support an increase in consumer inflation, which is the Bank of Japan's condition for further raising the key rate. Yesterday, officials at the International Monetary Fund (IMF) told the Japanese government to further increase borrowing costs. They also noted the problem of excessive weakening of the yen but called for it not to be solved through monetary policy.

Australia

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

In the absence of significant economic releases, the movement of the Australian dollar is determined by external factors. It is only worth noting that today the country's government presented a new state budget, and Finance Minister Jim Chalmers said that the indicator remained in surplus for the second year in a row, which no other developed economy has achieved. The underlying surplus was 9.3 billion Australian dollars. The official also confirmed the forecast of the Treasury, according to which inflation will return to the target range of 2.0–3.0% by the end of this year, and not next year, as the Reserve Bank of Australia (RBA) expects.

Oil

Oil prices are falling significantly today amid the publication of data on wholesale inflation in the United States.

The producer price index (PPI) in April exceeded experts' expectations and rose to 2.2% YoY, increasing the likelihood of the US Federal Reserve maintaining interest rates at high levels for a long time. It is also worth noting that OPEC today presented a monthly report indicating that demand for “black gold” will increase by 2.25 million barrels per day this year, and by 1.85 million barrels per day in 2025. During the day, investors also expect the publication of a weekly report on inventories from the American Petroleum Institute (API): they could rise by 1,000 million barrels, which will put additional pressure on quotes.