Weekly labor market data once again confirmed its resilience: initial jobless claims rose to 212.0K, below forecasts of 217.0K, the four-week average increased from 219.50K to 220.25K, while continuing claims declined to 1.833 million versus expectations of 1.860 million. This reinforces the likelihood that the Federal Reserve will maintain its current monetary policy stance for an extended period. Taking into account incoming data and the January rise in consumer inflation to 2.4%, most officials continue to adopt a cautious tone. Chicago Fed President Austan Goolsbee stated that interest rates could be cut several times later this year if inflation reaches the 2.0% target. At the same time, Stephen Miran, nominated to the Fed’s Board by President Donald Trump, told Fox Business that borrowing costs should be reduced by 100 basis points—equivalent to four standard rate cuts—arguing that rising prices are not a major issue for the US economy and that the labor market requires additional support.
Eurozone
The euro is strengthening against the pound, while trading with mixed dynamics against the US dollar and the yen.
Today, the European Central Bank published the results of its January consumer survey on inflation expectations. Most respondents expect average inflation of 2.6% over the next 12 months, down from the previous estimate of 2.8%, and 2.3% over the next five years versus 2.4%. Household income growth expectations edged up from 1.1% to 1.2%. Notably, euro area inflation has remained well below earlier projections, spending much of last year near the ECB’s 2.0% target. Analysts believe inflation will stay relatively low throughout 2026, supported by falling energy prices and increased exports of low-cost goods from China.
United Kingdom
The pound is weakening against both the euro and the US dollar, while showing mixed movement against the yen.
The currency remains under pressure following comments from Bank of England Governor Andrew Bailey, who signaled the possibility of monetary easing at the March meeting despite slow progress in reducing services-sector inflation. Additional pressure came from February consumer confidence data from GfK Group, which fell from –16.0 to –19.0 points instead of the expected rise to –15.0. Analysts note that households remain cautious amid high inflation and are inclined to delay spending, potentially slowing the UK’s economic recovery. Political uncertainty also persists after the ruling Labour Party lost a by-election in the Gorton and Denton constituency, failing to secure a parliamentary seat and further weakening Prime Minister Keir Starmer’s position.
Japan
The yen is trading with mixed dynamics against the euro, pound, and US dollar.
Investors are focused on February inflation data: the headline consumer price index in the Tokyo metropolitan area rose from 1.4% to 1.5% year-on-year, while the core CPI slipped from 2.0% to 1.8%, falling below the Bank of Japan’s 2.0% target for the first time in 16 months. This creates conditions for further near-term moderation, in line with the BoJ’s forecast that fuel subsidies will temporarily suppress inflation before price growth resumes amid steady wage increases. Meanwhile, Finance Minister Satsuki Katayama said the government is closely monitoring the recent weakening of the yen, which markets interpreted as a hint of possible future currency intervention.
Australia
The Australian dollar is strengthening against the pound, while showing mixed performance against the euro, yen, and US dollar.
January lending data released today showed private sector credit growth slowing from 0.8% to 0.5% versus forecasts of 0.7%, while mortgage lending eased from 0.7% to 0.6%. Next week, investors will focus on the February manufacturing PMI, which is expected to decline from 52.3 to 51.5 points, potentially weighing on the currency.
Oil
Oil prices are rising following the conclusion of another round of US–Iran negotiations in Geneva.
Although Iranian Foreign Minister Abbas Araghchi described the outcome as positive and confirmed further discussions on easing US sanctions and limiting Iran’s nuclear program, investors remain concerned that talks could stall, leading to an escalation of military conflict in the Middle East, where both sides have largely completed preparations for potential hostilities. Meanwhile, according to a Reuters survey of leading economists, the average price of Brent crude oil in 2026 is expected to reach $63.85 per barrel, up from the January forecast of $62.02.
