United States of America

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

US gross domestic product (GDP) data for Q1 2024 was released today: the figure rose by 1.4% instead of the expected 1.3%, still below the 3.4% shown in Q4 2023. A slowdown in economic growth may cause the US Federal Reserve to begin adjusting its monetary policy. Also today, weekly data on the labor market became known: the number of initial jobless claims increased by 233.0 thousand, being less than both the forecast of 236.0 thousand and the previous figure of 239.0 thousand, while the total number of citizens receiving assistance from the state, increased from 1.820 million to 1.839 million. On Friday, investors expect the publication of May statistics on the basic price index of private consumption expenditures: the indicator may decrease from 0.2% to 0.1% MoM and from 2.8% to 2.6% YoY. The implementation of the forecasts will increase the likelihood that the US Federal Reserve will begin reducing interest rates in September.

Eurozone

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

Data on consumer and business activity in the Eurozone were published today: in June, the index fell from 96.1 points to 95.9 points instead of rising to 96.2 points, while private sector lending added 0.3%, as did non-financial organizations. Overall, the European economy is showing some signs of slowing, confirming the likelihood of a continuation of the cycle of interest rate cuts by the European Central Bank (ECB). Yesterday, Bank of Finland Governor Olli Rehn said that current inflation rates indicate that it may stabilize at the target level of 2.0% in the medium term, although the downtrend has slowed somewhat in recent months.

United Kingdom

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

The Bank of England's financial stability report was published today, revealing that the proportion of households struggling to make mortgage payments will remain well below levels recorded since the 2008 global financial crisis. It is only the renters who are experiencing problems as rents have increased significantly and are putting constant pressure on their financial situation. On Friday, investors expect the release of UK gross domestic product (GDP) data for Q1 2024: QoQ, the economy could expand by 0.6%, and YoY – by 0.2%, after a correction of -0.3% and - 0.2% earlier, respectively. The implementation of forecasts may provide additional support to the pound.

Japan

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

Today, data on retail sales for May was published, which turned out to be positive: their volume increased by 3.0% against preliminary estimates of 2.0%. Also today, Finance Minister Shunichi Suzuki once again warned that the authorities will take the necessary measures to stabilize the national currency. The official noted that rapid movements in exchange rates are undesirable as they negatively affect the economy. On Friday, investors expect the release of June inflation data for the Tokyo metropolitan area: YoY, the consumer price index could rise from 2.2% to 2.4%, and the core rate from 1.9% to 2.1%. The implementation of forecasts will increase the likelihood of raising interest rates by the Bank of Japan, which will strengthen the position of the yen.

Australia

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

Investors remain focused on yesterday's publication of May inflation data: the weighted average consumer price index increased from 3.6% to 4.0%, which caused increased investor concerns about a new increase in interest rates by the Reserve Bank of Australia (RBA). Some experts assumed that officials would begin tightening monetary policy as early as August, but today Deputy Governor Andrew Hauser said it would be a serious mistake to formulate monetary policy based on a single inflation report and noted that a number of important economic data which will require detailed analysis were still to be published.

Oil

Oil prices are actively rising today, as the risks of supply disruptions due to growing geopolitical tensions in the Middle East offset fears of falling energy demand in the United States.

The report published yesterday by the Energy Information Administration of the US Department of Energy (EIA) recorded a correction in oil reserves by 3.591 million barrels instead of the predicted ˗2.600 million barrels, and gasoline reserves by 2.654 million barrels, but distillate volumes decreased by 0.377 million barrels. These statistics disappointed investors, but rising tensions on the border between Israel and Lebanon did not allow prices to continue their decline: experts fear that an escalation could lead to direct involvement of Iran and Turkey in the conflict, causing problems with the supply of “black gold.” Quotes were also supported by the publication of US gross domestic product (GDP) data for Q1 2024, which exceeded forecasts, which does not exclude an increase in oil demand in the world's largest economy.