13/04/2022
KEY RELEASES
United States of America
The US currency is weakening against the yen and has ambiguous dynamics paired with the euro and the pound. Investors are focused on the March inflation data published today in the USA, which confirmed the negative trend: the consumer PCI index rose from 0.8% to 1.2% on a monthly basis, and from 7.9% to 8.5% on an annual basis, surpassing preliminary market estimates of 8.4% and being the highest value since 1981. The core consumer price index decreased from 0.5% to 0.3% on a monthly basis and increased from 6.4% to 6.5% on an annual basis. Prices are rising in all sectors of the economy; energy, food and utilities have risen the most. Undoubtedly, the observed trend will push the US Fed to further sharply raise rates, which should reduce inflation, but at the same time carries risks of slowing the recovery of the American economy.
Eurozone
The European currency is weakening against the yen and has ambiguous dynamics paired with the USD and the pound. Today, Germany published data on the consumer price index for March, which confirmed a further increase in inflation in the first European economy: on a monthly basis, the index rose from 0.9% to 2.5%, and on an annual basis - from 5.1% to 7.3%, which, in turn, increases pressure on the European Central Bank, which must take new measures to combat inflation, but in the face of uncertainty caused by the Ukrainian crisis, officials are hesitating to raise rates, fearing to further slow down the economic recovery. Meanwhile, the April business sentiment index from ZEW is declining, although not as much as experts expected: the indicator for Germany corrected from -39.3 to -41.0 points, instead of the expected -48.0 points, and for the eurozone — from -38.7 to -43.0 points, instead of -46.5 points expected. The representative of ZEW, Achim Wambach, noted that business is pessimistic about the current economic situation and assumes that it will continue to deteriorate, as the threat of stagflation persists.
United Kingdom
The pound is weakening against the yen and has ambiguous dynamics paired with the euro and the USD. Investors are focused on the release of March data from the UK labor market. According to statistics, the unemployment rate in the country decreased from 3.9% to 3.8%, and employment increased by 10K, which is lower than the 50K expected by experts, while the number of applications for unemployment benefits decreased by 46.9K. The average salary level corrected upwards: the indicator excluding bonuses increased from 3.8% to 4.0%, and taking them into account - from 4.8% to 5.4%. In general, the indicators of the British labor market remain strong, but are offset by a serious increase in inflation. in the country, as the net incomes of British citizens continue to decline due to the constant increase in prices, which the increase in wages does not keep pace with. Experts are also concerned about the slowdown in employment growth, as it may be a consequence of business caution. Companies are in no hurry to recruit new employees because they fear a slowdown in demand for their services and products.
Japan
The yen is strengthening against its main competitors - the euro, the USD and the pound. Today, March data on the corporate goods price index were published in Japan: on a monthly basis, the indicator decreased from 0.9% to 0.8%, and on an annual basis - from 9.7% to 9.5%, but in general, the increase in wholesale inflation remains close to a record. According to experts, an increase in wholesale prices will help accelerate consumer inflation to the Bank of Japan's target of 2.0%, this could damage the country's economy, which is still recovering from the coronavirus epidemic. It should also be noted that today Japanese Prime Minister Fumio Kishida once again confirmed that the stability of exchange rates is extremely important, and any sharp fluctuations are undesirable.
Australia
The Australian currency is strengthening against its main competitors - the yen, the USD, the euro and the pound. Today, March data on business conditions and confidence in Australia were published, which turned out to be positive: the business conditions index rose from 9 to 18 points, and business confidence - from 13 to 16 points. The highest figures were recorded in the retail, leisure, finance and real estate sectors. In general, Australian companies have demonstrated an increase in sales and an increase in the number of employees, but the pressure of inflation continues to be the main problem of the Australian economy.
Oil
Oil quotes are rising today amid the weakening of quarantine measures in China and OPEC's warning that Russia's withdrawal from the oil market in the near future will be impossible to compensate. The Chinese authorities announced the easing of a number of restrictions in some areas of Shanghai, which will affect almost 5M people, since no new cases of coronavirus infection have been registered there over the past two weeks. Such actions give hope for the preservation of oil demand from the world's first consumer. Meanwhile, OPEC representatives said that in the event of an embargo on Russian energy carriers, the market will lose oil and other related products with a volume of 7M barrels, which there is nothing to compensate for. During the day, investors also expect the publication of a weekly report on the amount of oil reserves in the USA from the American Petroleum Institute (API). The last time the indicator increased by 1.08M barrels, and the continuation of this trend may put pressure on oil quotes.
