Overall price movements are largely driven by external factors, with investors now focusing on the upcoming release of the minutes from the US Federal Reserve’s January monetary policy meeting, scheduled for tomorrow at 21:00 (GMT+2). The regulator kept the key interest rate unchanged in the 3.50–3.75% range amid steady economic growth and easing risks to both inflation and employment. Speaking to reporters, Fed Chair Jerome Powell noted that policymakers would return to a “dovish” cycle if consumer inflation stabilizes near the 2.0% target or if the labor market shows a marked cooling. At present, most experts expect two rate cuts over the course of the year, beginning no earlier than June—after the current leadership’s four-year term expires. By year-end, borrowing costs could decline by 59 basis points, implying more than two standard rate adjustments. Still, current macroeconomic data allow monetary authorities to maintain existing parameters: in January, unemployment fell from 4.4% to 4.3%, employment rose by 130.0 thousand versus forecasts of 66.0 thousand, while inflation slowed from 2.7% to 2.4% year-on-year, and core inflation eased from 2.6% to 2.5%.
Eurozone
The euro is gaining against the pound but weakening versus the yen and the US dollar.
January data released today showed Germany’s consumer price index rising from 0.0% to 0.1% month-on-month and from 1.8% to 2.1% year-on-year, while the harmonized index adjusted from 0.2% to −0.1% and from 2.0% to 2.1%, respectively, in line with expectations. However, this trend differs from European Central Bank (ECB) forecasts, which anticipate inflation slowing below 2.0% this year and returning to target only in 2027. Meanwhile, February economic sentiment indicators for the euro area declined from 40.8 to 39.4 points versus expectations of 45.7, while Germany’s corresponding index slipped from 59.6 to 58.3 compared with 65.8 previously. At the same time, the index of current business conditions in Germany improved from −72.7 to −65.9 points. Commenting on the data, ZEW President Achim Wambach said the largest eurozone economy has entered a recovery phase, though it remains far from a stable trend.
United Kingdom
The pound is losing ground against its main counterparts—the euro, the yen, and the US dollar.
Quotes remain under pressure following mixed December labor market data: unemployment rose from 5.1% to 5.2%, the highest level in more than a decade (excluding the COVID-19 period), employment growth slowed from 82.0 thousand to 52.0 thousand, and average wage growth came in at 4.2% versus forecasts of 4.6%, while the same indicator excluding bonuses fell from 3.6% to 3.4%. Overall, the sector shows signs of cooling, while inflation is gradually slowing—factors that may support the Bank of England’s continuation of a dovish stance. According to a Reuters survey, most economists expect a 25-basis-point rate cut as early as March, followed by another move in April or June.
Japan
The yen is strengthening against major peers—the euro, the pound, and the US dollar.
Today, Japanese Prime Minister Sanae Takaichi announced that the government will soon begin reviewing a plan to cut the consumption tax on food and alcohol from 8.0% to 0.0%, involving both ruling and opposition parties. Officials will discuss the timeline, with the initiative expected to take effect as early as this summer. However, analysts are cautious about such sweeping changes, warning that the move could create an annual tax revenue shortfall of around 5.0 trillion yen, potentially worsening the country’s already debt-burdened financial system. If confidence in the government weakens and the yen continues to depreciate, food price inflation could accelerate, placing additional pressure on household spending.
Australia
The Australian dollar is strengthening against the pound but weakening versus the yen and the US dollar, while showing mixed dynamics against the euro.
Investors and forex traders are focused on the release of minutes from the Reserve Bank of Australia’s (RBA) latest monetary policy meeting, at which the regulator raised the interest rate by 25 basis points to 3.85%. According to the document, officials concluded that inflation will remain too high at least until 2028, requiring immediate measures to contain it. However, they are not yet certain whether further rate hikes will be needed in the medium term; currently, most market participants expect borrowing costs to rise again by a minimal amount at the May meeting.
Oil
Oil prices are showing mixed dynamics, with the market in a state of uncertainty as investors monitor trilateral consultations between Russia, the United States, and Ukraine, as well as negotiations over a renewed nuclear deal between Iran and the US.
Market participants hope for a compromise, as a direct US–Iran confrontation would likely lead to the closure of the Strait of Hormuz and a reduction in crude supplies from the Middle East. Notably, representatives of Iran’s armed forces have indicated that such a scenario remains plausible, and reports have already emerged of a temporary closure of the waterway for military exercises. As a result, oil market movements will largely depend on incoming diplomatic signals.
