United States of America

USD is falling against GBP and JPY but has ambiguous dynamics against EUR.

Investors are awaiting the publication of the results of the two-day meeting of the US Fed today at 22:00 (GMT 2). According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of an interest rate adjustment by –25 basis points increased from 34.0% to 37.0% against the housing market report. The August building permits number increased from –3.3% to 4.9% or 1.475M against the forecast of 1.410M, and housing starts – from 1.238M to 1.356M, above the preliminary estimates of 1.310M. Analysts’ central forecast assumes an interest rate cut of at least 25 basis points.

Eurozone

EUR is falling against GBP and JPY but is showing neutral dynamics against USD.

Traders are awaiting the results of the two-day meeting of the US Fed due today at 20:00 (GMT 2). Recall that investors expect the interest rate to be cut by at least 25 basis points. However, according to the Chicago Mercantile Exchange (CME Group) FedWatch Instrument, the probability of a –50 basis point adjustment has increased to 63.0%, while last week it did not exceed 30.0%. Today, the August CPI data was published, confirming the forecasts of a slowdown in inflation in the Eurozone. The indicator was corrected from 0.0% to 0.1% MoM and from 2.6% to 2.2% YoY, while the core indicator changed from 2.9% to 2.8%, which may support the euro soon.

United Kingdom

GBP is strengthening against EUR, JPY, and USD.

Tomorrow, the Bank of England will meet, and analysts expect the interest rate to remain at 5.00%, facilitated by the increase in the CPI in August from –0.2% to 0.3% MoM and maintaining it at 2.2% YoY. The absence of negative dynamics may influence the opinion of regulator officials. To prevent inflation from growing, it will be necessary to fix the cost of borrowing for some time.

Japan

JPY is falling against GBP but rising against EUR and USD.

The yen is rising despite poor macroeconomic statistics on foreign trade. The August exports were corrected from 10.2% to 5.6%, significantly below the forecast of 10.0%, and imports – from 16.6% to 2.3% compared to expectations of 13.4%, so, the trade balance deficit changed from –628.7B yen to –695.3B yen. Trading volumes remain low amid expectations of the US Fed’s interest rate decision. A sharp reduction in the difference in the cost of borrowing between the US and Japan will put significant pressure on the market.

Australia

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

Volatility remains low amid tension in the markets ahead of the meetings of leading regulators, and even the primary indicators that can usually give an idea of ​​the local trend are neutral. Thus, the leading indicators index from the Melbourne Institute has been staying at 0.0% for the second month, reflecting uncertainty in the national economy. The Reserve Bank of Australia (RBA) meeting on monetary policy is due on September 24, when the US Fed interest rates will already be known. However, some analysts predict that officials will not adjust the current value.

Oil

Oil prices are falling, trading just above 72.00.

It became known that the US government would continue to purchase oil to replenish the strategic reserve in the new year. A tender will be held to determine the suppliers of 6.0M barrels of oil to obtain it from January to March 2025. Such a large one-time volume has not been purchased in the coming years, and the conclusion of contracts will extend the period of continuous purchases to 9 months. Today, the data on commercial reserves from the Energy Information Administration of the US Department of Energy (EIA) is due. A minimal change may follow from 0.833M barrels to –0.100M barrels. Yesterday’s report from the American Petroleum Institute (API) reflected positive dynamics of 1.960M barrels, which became another reason for the decline in the asset.