United States of America

USD is weakening against GBP and EUR but is showing ambiguous dynamics in pair with JPY.

Yesterday, preliminary October data on business activity in the United States were published, which turned out to be positive: the Manufacturing PMI increased from 47.3 points to 47.8 points against preliminary estimates of 47.5 points, and the Services PMI – from 55.2 points to 55.3 points instead of the expected decrease to 55.0 points. Thus, the American economy maintains signs of growth due to an increase in non-manufacturing activity. Today, preliminary September data on durable goods orders were published: their total volume decreased by 0.8% against expectations of ˗1.1%, but core orders grew by 0.4% instead of the expected decrease of 0.1%. These data increase the likelihood of a more cautious approach by the US Federal Reserve to further easing of monetary policy. In this regard, it is worth mentioning the comments of the head of the Federal Reserve Bank (FRB) of Cleveland Beth Hammack, who stated yesterday that inflationary pressure in the economy is declining but has not yet reached the required level of 2.0%.

Eurozone

EUR is weakening in pair with GBP but strengthening against JPY and USD.

Today, the October data on the business climate in the German economy from the Institute for Economic Research (IFO) was published, which turned out to be positive: the business climate index increased from 85.4 points to 86.5 points with preliminary estimates of 85.6 points, the index of current business conditions – from 84.4 points to 85.7 points, and the index of business expectations – from 86.4 points to 87.3 points. Commenting on these statistics, IFO President Clemens Fuest said that the German economy managed to stop the decline. It is also worth noting the comments of leading officials of the European Central Bank (ECB). Earlier, some members of the regulator's board expressed concerns about the possibility of a deeper than necessary reduction in inflation, which, according to experts, meant the likelihood of a sharper reduction in the cost of borrowing. However, the day before, the President of the Bank of Slovenia Bostjan Vasle said that it is necessary to move towards a neutral key rate in moderate steps, the head of the Central Bank of Latvia Martins Kazaks noted that the ECB should not yet consider interest rates below neutral, and the head of the Bundesbank Joachim Nagel said that the European regulator should not stop fighting against the growth of consumer prices, despite the reduction in the indicator in September.

United Kingdom

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

Today, October consumer confidence data from Gfk Group was published, which turned out to be negative: the indicator fell from ˗20.0 points to ˗21.0 points. Experts note that households have become more pessimistic about their economic prospects, despite the improvement in the state of personal finances. In addition, citizens are concerned about the likelihood of a significant increase in taxes in the new budget, which is currently being prepared by Chancellor of the Exchequer Rachel Reeves.

Japan

JPY is weakening against EUR and GBP but has ambiguous dynamics in pair with USD.

Tokyo Metropolitan area inflation data for October was released today: the annualized PMI fell from 2.1% to 1.8%, while the core PMI fell from 2.0% to 1.8%. Consumer prices thus grew slower than the Bank of Japan's target of 2.0%. These statistics increase the likelihood that interest rates will be kept at current levels at the regulator's meeting next week, as well as the chances that officials will abandon the idea of tightening monetary policy earlier than at the end of this year.

Australia

AUD is weakening in pair with GBP but is showing ambiguous dynamics against EUR, JPY, and USD.

Investors are preparing for the publication of inflation data for the third quarter next week: the consumer price index (CPI) is expected to fall from 1.0% to 0.4% QoQ and from 3.8% to 2.8% YoY, while the weighted average index could increase from 0.8% to 0.9% QoQ and fall from 4.1% to 3.7% YoY. The implementation of forecasts will confirm the reduction of inflationary pressure in the economy and could push the Reserve Bank of Australia (RBA) to discuss the possibility of cutting the key rate. However, experts still do not expect the regulator to take active action until the beginning of next year.

Oil

Oil prices are rising today: instability in the Middle East continues to drive the upward dynamics of quotes.

Investors are awaiting Israel's response to the Iranian missile attack on October 1, which could affect the Islamic Republic's oil infrastructure. In this case, the likelihood of blocking the Strait of Hormuz and significant disruptions in the supply of Middle Eastern oil to the market will increase. Experts also do not rule out that tensions in the region will rise again after the presidential elections in the United States. It is also worth noting that yesterday, analysts from the investment bank Goldman Sachs left their forecast for Brent oil prices in 2025 unchanged at 70.0–85.0 dollars per barrel, since, in their opinion, the impact of any stimulus measures from China on the market will be insignificant.