May housing market data were generally weak: the number of building permits issued fell from 1.423 million to 1.419 million, compared with expectations of 1.413 million, while new home sales declined from 626.0 thousand to 580.0 thousand instead of the expected 638.0 thousand. Nevertheless, the sector remains stable despite the economic crisis. Yesterday, Treasury Secretary Scott Bessent urged investors to stop forecasting Federal Reserve actions based on “dot plot models,” arguing that they are often inaccurate. The official was likely seeking to calm market participants expecting monetary tightening in September after eight of nineteen members of the Federal Open Market Committee (FOMC) warned at the previous meeting that interest rates could be raised this year. Meanwhile, President Donald Trump said he had instructed the Department of Justice to launch an investigation into several fuel companies, including Chevron Corp., Exxon Mobil Corp., Shell Plc., and BP Plc., alleging that they were deliberately keeping gasoline prices high despite the decline in crude oil prices. Experts have described the accusations as absurd, noting that these products cannot move in complete synchrony because their prices depend on different factors.
Eurozone
The euro is weakening against the pound and the US dollar, while showing mixed dynamics against the yen.
Germany’s July data from GfK Group were published today: the consumer climate index rose from –29.7 points to –29.2 points, missing expectations of –27.8 points; the economic expectations sub-index improved from –11.2 points to –8.7 points; expected income rose from –13.0 points to –12.2 points; while the willingness-to-save indicator remained unchanged at 13.9 points. Commenting on the figures, GfK expert Rolf Bürkl said that consumer sentiment had stabilised but remained negative. Meanwhile, European Central Bank Executive Board member Isabel Schnabel stated that the regulator could continue tightening monetary policy because fuel prices remain elevated and a ceasefire in the Middle East is not a reason to abandon a cautious approach.
United Kingdom
The pound is weakening against the US dollar, while showing mixed dynamics against the euro and yen.
June retail sales data from the Confederation of British Industry (CBI) were published today: the retail sales volume balance fell from –46.0 points to –54.0 points instead of rising to the expected –41.0 points, signalling a slowdown in the recovery of the UK economy. Experts note that negative dynamics were recorded across a wide range of goods, with the largest decline in demand seen in the automotive sector. Consumer confidence could be supported by political stabilisation in the country and government measures aimed at assisting households.
Japan
The yen is weakening against the US dollar and showing mixed dynamics against the euro and pound.
Recent comments by Bank of Japan Board member Naoki Tamura are worth noting. He stated that the regulator should raise interest rates every few months and be prepared to accelerate the pace of monetary tightening. The official added that companies are now passing rising import costs on to consumers much faster and on a larger scale than at the beginning of the Russia–Ukraine conflict. At the same time, the core Consumer Price Index has reached 2.0%, while inflation expectations in the economy remain elevated.
Australia
The Australian dollar is strengthening against the euro and yen, while showing mixed dynamics against the US dollar and pound.
Investors are focused on May labour market data: the unemployment rate declined as expected from 4.5% to 4.4%; total employment increased by 40.3 thousand after falling by 40.7 thousand a month earlier; while full-time employment rose by 5.2 thousand after a decline of 21.7 thousand. The sector is therefore showing resilience, which, combined with elevated inflation — the trimmed mean Consumer Price Index stood at 4.0% in May — increases the likelihood of monetary tightening by the Reserve Bank of Australia in the medium term.
Oil
Oil prices are trading within narrow sideways ranges amid conflicting factors.
Progress in US-Iran peace negotiations is putting pressure on prices, as traffic through the Strait of Hormuz has resumed. US Energy Secretary Chris Wright said that at least 20.0 million barrels of crude oil had been transported over the past day alone. However, in his view, a return to volumes seen before the escalation of the conflict will take at least several weeks. On the other hand, prices are supported by data from the US Energy Information Administration (EIA), which showed a 6.088 million-barrel decline in fuel inventories, exceeding forecasts of 3.900 million barrels, although gasoline stocks rose by 2.064 million barrels and distillate inventories increased by 3.064 million barrels.
