The latest data on the state of the US labor market published today proved to be positive: initial jobless claims totaled 198.0K, below both the forecast of 215.0K and the previous reading of 207.0K. Meanwhile, the four-week moving average declined from 211.5K to 205.0K, and the total number of people receiving unemployment benefits fell from 1.903 million to 1.884 million, compared with expectations of 1.890 million.

Also noteworthy are recent comments from US President Donald Trump, who said in an interview with Reuters that he does not intend to terminate Federal Reserve Chair Jerome Powell’s term early, despite the criminal investigation launched over alleged misuse of funds allocated for the renovation of the Fed’s headquarters in Washington. The White House chief also added that his advisor Kevin Hassett and former Fed Governor Kevin Warsh would be the most suitable candidates to lead the central bank. Markets interpreted this rhetoric as a signal that current monetary policy is likely to remain unchanged at least until mid-year.

Eurozone

The euro is losing ground against the US dollar and the pound, while showing mixed performance versus the yen.

Today, traders and forex market participants focused on Germany’s gross domestic product (GDP) data: for the first time in three years, the economy expanded by 0.2%, driven by higher consumer spending and government investment. Household consumption rose by 1.4%, while public spending increased by 1.5% in inflation-adjusted terms.

However, experts reacted cautiously, expecting Europe’s largest economy to continue showing signs of stagnation in the near term, as the manufacturing sector remains under pressure from elevated US trade tariffs. In addition, November industrial production data for the euro area showed monthly growth of 0.7% versus expectations of 0.5%, and annual growth of 2.5% against forecasts of 2.0%. At the same time, December wholesale price data from Germany disappointed markets, recording declines both month-on-month and year-on-year—from 0.3% to −0.2% and from 1.5% to 1.2%, respectively. Analysts do not rule out that a continuation of this trend could prompt the European Central Bank (ECB) to ease monetary policy as early as the first half of the year.

United Kingdom

The pound is gaining against the euro but losing ground versus the yen and the US dollar.

The main driver behind the strengthening of the national currency was GDP data that exceeded analysts’ expectations. On a monthly basis, the UK economy expanded by 0.3%, while annual growth reached 1.4%, compared with forecasts of 0.1% and 1.1%, respectively. The strongest improvements were seen in the services and manufacturing sectors, which grew by 0.3% and 1.1%, while construction contracted by 1.3%. Analysts expect a recovery in construction later this year, particularly as the Bank of England is likely to maintain a dovish monetary stance. At the same time, industrial production data released today showed a slowdown from 1.3% to 1.1%, still significantly better than the projected 0.2%.

Japan

The yen is weakening against the US dollar but strengthening versus the pound and showing mixed dynamics against the euro.

Market participants are assessing December wholesale inflation data: the corporate goods price index slowed from 0.3% to 0.1% month-on-month and from 2.7% to 2.4% year-on-year, mainly due to lower fuel prices. However, the figures remain above the Bank of Japan’s 2.0% target, which could support the case for maintaining a hawkish policy stance. In this context, it is worth noting the results of a Reuters survey of leading experts: most respondents believe the central bank will pause until July before raising the key interest rate again. By September, it could reach 1.00% or higher, according to their estimates.

Australia

The Australian dollar is strengthening against the yen, the euro, and the pound, while showing mixed performance versus the US dollar.

Today, traders are evaluating January consumer inflation expectations data from the Melbourne Institute: the indicator edged down from 4.7% to 4.6% but remains well above the Reserve Bank of Australia’s (RBA) target range of 2.0–3.0%. This confirms that price pressures persist in the Australian economy, increasing the likelihood of an interest rate hike by the regulator later this year.

Oil

Oil prices are correcting lower today, remaining under pressure from comments by US President Donald Trump, who stated that US armed forces do not intend to attack Iran, as the authorities of the Islamic Republic would cease repression of protesters. However, experts note that this statement could be a tactical move aimed at misleading Tehran and gaining additional time to build up military presence in the region.

It is also worth noting that deeper price declines are being restrained by the release of weekly data from the US Energy Information Administration (EIA), which showed crude oil inventories rising by 3.391 million barrels versus forecasts of −1.700 million barrels. Gasoline stocks increased by 8.977 million barrels, while distillate inventories fell by 0.029 million barrels.