United States of America

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

Preliminary September business activity data were released today. The manufacturing PMI fell from 47.9 points to 47.0 points instead of the expected 48.6 points, the service PMI from 55.7 points to 55.4 points compared to the forecast of 55.3 points, and the composite PMI from 54.6 points to 54.4 points, although experts expected 54.3 points. The national economy maintains significant growth rates, increasing the likelihood of further easing of monetary policy by the US Fed. In addition, today, Minneapolis Federal Reserve Bank President, Neel Kashkari, said that cutting the interest rate by 50 basis points was the right decision amid significant progress in the fight against inflation and increasing risks of rising unemployment.

Eurozone

EUR is weakening against JPY, GBP, and USD.

The currency is under pressure from poor preliminary business activity data in the Eurozone. The September EU manufacturing PMI fell from 45.8 points to 44.8 points instead of the expected 45.7 points, the services PMI from 52.9 points to 50.5 points, coming to the verge of stagnation, and the composite PMI from 51.0 points to 48.9 points. In Germany, the manufacturing PMI fell from 42.4 points to 40.3 points, the service PMI from 51.2 points to 50.6 points, and the composite PMI from 48.4 points to 47.2 points. Experts were particularly concerned about the return to negative dynamics of the French economy after the growth due to the Olympic Games. The manufacturing PMI increased from 43.9 points to 44.0 points, remaining in the stagnation zone, the services PMI decreased from 55.0 points to 48.3 points instead of the expected 53.0 points, and the composite PMI changed from 53.1 points to 47.4 points. It increases the likelihood of further interest rate cuts at the October European Central Bank (ECB) meeting.

United Kingdom

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

Preliminary September business activity data was released today, with the manufacturing PMI falling from 52.5 to 51.5, beating the forecast of 52.3, the service PMI from 53.7 to 52.8, and the composite PMI from 53.8 to 52.9. Overall, UK business sentiment remains positive, and key sectors of the economy are recovering, albeit more slowly than expected, allowing the currency to remain stable against its peers. The Confederation of British Industry (CBI) industrial orders index fell from –22.0 to –35.0, more than the –23.0 expected, as export demand for manufactured goods is declining at the fastest pace since December 2020, and manufacturers fear further deterioration in the coming months.

Japan

JPY is strengthening against EUR and is ambiguous against USD and GBP.

On Tuesday, experts expect the publication of preliminary September data on business activity. The manufacturing PMI may rise from 49.8 points to 49.9 points, and the services PMI may decrease from 54.0 points to 53.8 points, confirming the prospects for the Bank of Japan to continue its “hawkish” course and strengthening the yen against alternative assets.

Australia

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

Today, preliminary September data on business activity were published. The manufacturing PMI fell from 48.5 points to 46.7 points, the services PMI from 52.5 points to 50.6 points, and the composite PMI from 51.7 points to 49.8 points, entering the stagnation zone. The negative dynamics are developing under pressure from high inflation and peak rates of the Reserve Bank of Australia (RBA). However, the regulator’s officials are not yet ready to move on to easing monetary policy. According to preliminary estimates, during tomorrow’s meeting at 06:30 (GMT 2), the cost of borrowing will remain at 4.35% and is unlikely to decrease before the end of the year.

Oil

Oil quotes are trying to grow.

The sector is under the influence of several opposing factors. It is supported by the US Fed’s 50 basis point interest rate cut and a partial reduction in crude oil supplies due to Hurricane Francine. However, a more rapid upward dynamic is hampered by the publication of poor September data on business activity in the Eurozone, reducing the outlook for oil demand from one of the world’s leading economies. Nevertheless, experts do not rule out a resumption of positive dynamics in the event of a new escalation of the conflict between Israel and the Lebanese paramilitary organization Hezbollah.