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Morning Market Review

EURUSD
The European currency shows fairly active growth, testing the level of 1.0075 for a breakout and updating local highs from August 26. The main factor in strengthening the positions of the instrument at the moment is the decision of the European Central Bank (ECB) on a record increase in interest rates, adopted the day before. The regulator decided to correct the value immediately by 75 basis points, bringing the final level to 1.25%. The deposit rate also rose by 75 basis points to 0.75%. In the follow-up statement, ECB representatives noted their readiness to further tighten monetary conditions if inflation rises or the pace of its decline is too slow. The forecast for Gross Domestic Product (GDP) has been revised down, but at the same time, the regulator does not expect an early recession. In 2022, the ECB predicts GDP growth of 3.1%, in 2023 it may grow by 0.9% and in 2024 it may increase by 2.3%, while inflation may return to the target level of 2.0% only by the end of 2024. Additional support for the single currency is also provided by some improvements in the energy sector. Gas prices show a rather active decline, reacting to the restrictive consumption measures that the EU countries are forced to take. Also, the market is widely discussing the prospect of introducing marginal prices for Russian energy resources.​

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GBPUSD
The British pound is trading with the uptrend, developing corrective momentum and retreating from record lows updated on Wednesday. Market participants are optimistic at the end of the week, as the European Central Bank (ECB) decided on a record increase in interest rates, despite the threat of a recession. Investors are also betting on some stabilization of the situation with energy prices. In particular, gas quotes showed a rather significant decline, reacting to an attempt by the EU and the UK to limit the consumption of "blue fuel", as well as to introduce marginal wholesale prices for energy supplies from the Russian Federation. Analysts also point to the fact that European countries managed to fill gas storage facilities ahead of schedule; in addition, negotiations are underway on alternative LNG supplies, including from the United States. However, without the resumption of the work of Nord Stream, Europe will probably have to reduce gas consumption. Meanwhile, in the UK, Prime Minister Liz Truss is delivering on campaign promises to cap domestic electricity prices for households. It is assumed that the new measures to support the population will cost the budget of the United Kingdom 130 billion pounds.​

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AUDUSD
The Australian dollar shows strong growth, quickly recovering from the local lows of July 14, updated in the middle of the week. The AUD/USD pair is testing 0.6825 for a breakout, following the main risky currencies. The uptrend impetus was given by the decision of the European Central Bank (ECB) to raise the interest rate record by 75 basis points at once, which reduced the gap with the US Federal Reserve. Meanwhile, the US regulator is also preparing for a 75 basis point correction next week. Yesterday's macroeconomic data from Australia put significant pressure on the positions of the instrument. Export volumes in July showed a sharp decline of 9.9% after an increase of 4.9% a month earlier, while Imports for the same period, on the contrary, increased markedly by 5.2% after an increase of 0.7%, which, in turn, led to a sharp decline in the Trade Surplus in July from 17.131 million Australian dollars to 8.733 million Australian dollars, well below the expected 14.500 million Australian dollars.​

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USDJPY
The US dollar shows a moderate decline, retreating from record highs, updated on Wednesday. The USD/JPY pair is testing 142.60 for a breakdown, and investors are fixing long profits. The reason for the appearance of downward dynamics was the growth in demand for risk the day before after the decision of the European Central Bank (ECB) to raise rates immediately by 75 basis points. Meanwhile, the yen was supported yesterday by optimistic macroeconomic statistics from Japan. The Gross Domestic Product (GDP) in the second quarter grew by 0.9% in quarterly terms and by 3.5% in annual terms, which turned out to be noticeably better than 0.5% QoQ and 2.2% YoY shown in the previous period, and also stronger than market forecasts at 0.7% QoQ and 2.9% YoY. The dollar was slightly supported by macroeconomic data from the United States: the number of Initial Jobless Claims for the week ended September 2 decreased from 228.0 thousand to 222.0 thousand, while forecasts assumed an increase in their number to 240.0 thousand.​

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XAUUSD
Gold prices show a weak corrective growth. The XAU/USD pair is testing 1720.00, keeping close to the local highs of August 30. The day before, the quotes of the instrument have already made an attempt to renew their local highs; however, the speech of the Chair of the US Federal Reserve Jerome Powell again threw the "bulls" back. The official confirmed the readiness of the regulator to follow the policy of high interest rates until the situation with inflation is completely stabilized. However, Powell did not say anything new, and therefore the growth of the US currency was very limited. The next meeting of the regulator will take place on September 21, and it is expected that the value will be adjusted by 75 basis points for the third time in a row. Notable support in this decision of the Fed is provided by macroeconomic statistics, which indicate the stability of the national economy, which exceeds analysts' expectations at the beginning of the current crisis.
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Morning Market Review

EURUSD
The European currency starts a new trading week with a moderate decline. On Friday, the quotes managed to renew the local highs of August 18, but the "bullish" positions remained extremely vulnerable. The European Central Bank's (ECB) decision to adjust interest rates by a record 75.0 basis points was a key factor in changing the dynamics. Also, agency officials announced the continuation of the "hawkish" monetary policy, despite the growing risks of a recession in the EU. At the same time, analysts are sure that the regulator's measures are untimely, and the rapidly developing energy crisis makes them lose any hopes for possible economic growth. On Tuesday, Germany is to release its August CPI, and the harmonized rate is forecast to remain unchanged at 0.4% MoM and 8.8% YoY. If preliminary estimates do not implement, euro quotes may show another rally to record lows.​

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GBPUSD
The GBPUSD pair shows ambiguous trading dynamics during the morning session on September 12, consolidating near 1.1600. Investors are in no hurry to open new positions, preferring to wait for the publication of macroeconomic statistics from the UK. July's gross domestic product (GDP) data is expected to be released today, and analysts' forecasts suggest that the British economy will be able to show growth of 0.5% after declining by 0.6% in June. Also, during the day, traders will pay attention to statistics on the dynamics of industrial production, as well as preliminary estimates of inflation and August GDP from NIESR. Tomorrow a full-fledged report on the labor market for July-August will be published, and on Wednesday, statistics on inflation will be released – a key parameter for the Bank of England, which, we recall, is also set to fight high prices, despite the threat of a recession. Current forecasts suggest that the figure in August in annual terms will rise to a new record high of 10.2%.​

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XAUUSD
Gold prices practically do not change, consolidating near 1715 dollars per troy ounce. According to the results of the last week, the XAUUSD pair showed a slight increase, although, during Friday's trading, the "bulls" made active attempts to consolidate at the local highs of August 30. The pressure on the instrument's position is still exerted by the growing dollar and the increased yield of US Treasury bonds (it reached 3.339% for ten-year securities against 3.321% last Friday). Also, investors fear further tightening monetary policy by the US Federal Reserve and the Bank of England. Recall that the European Central Bank (ECB) and the Bank of Canada adjusted interest rates by 75.0 basis points last week.
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Morning Market Review

EURUSD
The European currency shows mixed trading dynamics, consolidating near 1.0125. The day before, the EUR/USD pair showed active growth and managed to update local highs from August 17, approaching the resistance at the level of 1.0200. Nevertheless, the "bulls" failed to consolidate at their positions, and in the afternoon the dollar began to quickly win back its losses. The single currency is slightly supported by the improvement of the situation in the energy markets. Against the backdrop of reports that European storage facilities are full of gas, prices for this energy resource fell below 2000 dollars per 1000 cubic meters for the first time since July. In the meantime, experts warn against premature conclusions, as the main difficulties are yet to come. Investors are analyzing August data on inflation in Germany, released today: on a monthly basis, the figure fell from 0.9% to 0.3%, and on an annual basis it corrected from 7.5% to 7.9%, justifying analysts' preliminary estimates. The Harmonized Consumer Price Index recorded at the level of 8.8%. In addition, during the day the results of a study by the ZEW Institute on Economic Sentiment in Germany and the eurozone for September will be published.​

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GBPUSD
The British pound is trading with multidirectional dynamics, holding near 1.1700 and local highs of August 30. The day before, the GBP/USD pair showed moderate growth, although the macroeconomic background from the UK turned out to be rather weak. Gross Domestic Product (GDP) in July showed an increase of only 0.2% after falling by 0.6% a month earlier. Analysts expected an increase of 0.5%. The volume of Industrial Production fell again in July by 0.3% after falling by 0.9% in June. In annual terms, the growth rate of production slowed down from 2.4% to 1.1%. Forecasts suggested an increase of the indicator by 0.4% in monthly terms and by 2.0% in annual terms. NIESR GDP Estimate in August was adjusted downward by 0.2%, which also turned out to be worse than market expectations of growth by 0.1%. Today, investors are watching the statistics on the British labor market. The Unemployment Rate in July fell from 3.8% to 3.6%; however, the Claimant Count increased by 6.3 thousand after a decrease by 14.5 thousand, which may negatively affect the quotations of the national currency.​

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XAUUSD
Gold prices show multidirectional dynamics, continuing to consolidate near 1720.00. Investors prefer to wait for new drivers to move the XAU/USD quotes. However, the latest report from the US Commodity Futures Trading Commission (CFTC) recorded an active reduction in transactions by sellers, and the trend is observed in all categories: in positions backed by money, "bulls" increased activity, reaching 1.294 thousand contracts, while "bears" reduced the volume by 4.035 thousand. At the same time, despite signs of a slowdown in consumer prices, the US Federal Reserve still expects to raise interest rates by 75 basis points for the third time in a row at a meeting to be held next week.​

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Key Releases​

The USD is growing against all world currencies – the euro, the pound and the yen.

The key event of today was the publication of the August inflation data: on a monthly basis, the indicator added 0.1%, which led to a decrease in the annual value from 8.5% to 8.3%. Despite the downward dynamics for the second month in a row, experts are disappointed with changes in the cost of goods and services, with the exception of food and energy, where the core index reached 0.6% in monthly terms and 6.3% in annual terms. Thus, there are still no prerequisites for a slowdown in the tightening of monetary policy by the US Fed.​

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The euro is strengthening against the USD and the pound but has ambiguous dynamics against the yen.

The European currency corrects upwards after the release of statistics on the level of consumer prices in Germany: in August, the indicator added 0.3% after rising by 0.9% last month, while the annual value corrected from 7.5% to 7.9%. In Spain, inflation accelerated by 0.3%, pushing the annual rate up to 10.5%. Thus, the strengthening of the European currency can be continued, at least until the publication of statistics by the rest of the eurozone states.​

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The pound is declining in pairs with the main competitors – the euro and the yen, but is growing in pair with the USD.

The British currency is strengthening its positions, and the data on the national labor market published today served as the driver of the upward dynamics. Thus, the unemployment rate in July fell to 3.6% from 3.8%, and employment reached 40.0K. The number of applications for unemployment benefits was fixed at 6.3K after -14.5K last month. Another positive signal was another increase in the average wage, including bonuses, by 5.5% from 5.2%, while the same figure without bonuses was 5.2%.​

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The yen continues to strengthen in pairs with all major world currencies – the USD, the euro and the pound.

The Japanese currency in today's trading again demonstrates a positive trend. Meanwhile, more and more experts are speaking out on the Bank of Japan's monetary policy and current support programs. Thus, according to reports, at the next meeting, which will be held on September 22, in addition to monetary policy, the issue of canceling a special program of state financing of small businesses that have come under pressure during the COVID-19 pandemic will also be discussed. The released funds will have to be used to support economic-forming enterprises. The corporate goods price index was also released today, adding 0.2% in August, up 9.0% year-on-year.​

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The Australian dollar is strengthening in pairs with major currencies – the euro, the USD and the pound, but is declining in pair with the yen.

Quotes were supported by morning data on the index of consumer sentiment from Westpac: in September, the index added 3.9% after falling by 3.0% last month. In turn, the index of business confidence from the National Bank of Australia reached 10.0 points. It should also be noted that the Nine News TV channel conducted another public opinion poll, in which it turned out that more than 60.0% of respondents believe that the country should remain a monarchy, and only 40.0% were in favor of switching to a republican form of government.​

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Oil quotes returned to the opening levels of last week, exceeding 94 dollars per barrel.

As Reuters reported today, the US strategic energy stock continues to decline at a faster rate than previously expected, and, according to yesterday's data, it amounted to 434.1M barrels, the lowest since 1984. If the dynamics continue, then by the estimated date of the end of the sales (tentatively in October), the indicator may fall to a 40-year low of 385.0M barrels.​

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Morning Market Review

EURUSD
The European currency shows a moderate increase against the US dollar, recovering from a sharp decline the day before, which again returned the EUR/USD pair to the psychological level of 1.0000. The reason for the emergence of an active "bullish" trend in the US currency on Tuesday was the publication of August data from the US on inflation. The Consumer Price Index showed an increase of 0.1%, while analysts expected a decrease by a similar amount. In annual terms, inflation slowed down from 8.5% to 8.3%, which also turned out to be worse than market expectations of a fall to 8.1%. The released data lowered the market's positive expectations regarding the effectiveness of the monetary policy pursued by the leading central banks. At the same time, the likelihood of an interest rate correction by another 75 basis points by the US Federal Reserve next week has increased. In turn, the European statistics turned out to be weak and additionally contributed to the depreciation of the single currency. According to a study by the ZEW Institute, the index of Economic Sentiment in the euro area fell from -54.9 points to -60.7 points, while analysts had expected a slight increase in the indicator to -52.0 points. The index of Economic Sentiment in Germany over the same period corrected from -55.3 points to -61.9 points, although analysts had expected a decline to -60.0 points.​

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GBPUSD
The British pound is trading with an uptrend, trying to restore its positions after a strong decline the day before, provoked by the release of data on inflation in the US: in monthly terms, the indicator added 0.1% against the forecast of -0.1%. Thus, the correction in the prices of oil and gasoline did not help to overcome the increase in the cost of food and services. In addition, the market for petroleum products remains highly volatile as the EU countries intend to impose cap prices on energy resources imported from the Russian Federation. In turn, pressure on the pound yesterday was exerted by not the most confident report on the labor market in the UK. The Claimant Count showed an increase in August by 6.3 thousand after a decrease of 14.5 thousand in the previous reporting period, while market forecasts assumed a decline of 9.2 thousand. At the same time, the Average Earnings Excluding Bonus added 5.2% 3MoY in July, although an increase of only 5.0% was expected, and the ILO Unemployment Rate corrected from 3.8% to 3.6%.​

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XAUUSD
Gold prices show a slight negative trend, consolidating near 1700.00. The day before, the XAU/USD pair showed an active decline, as traders analyzed data from the US. In particular, consumer inflation in August added 0.1% with an expected decline by a similar amount, while CPI excluding Food and Energy accelerated from 0.3% to 0.6%, which turned out to be significantly worse than neutral forecasts. In annual terms, the value adjusted from 8.5% to 8.3%. Thus, the US Federal Reserve has so far managed to only slightly slow down inflation, which raises many questions about the prospects of the current "hawkish" rate of the regulator. Currently, about 82% of analysts expect that at the September 21 meeting, the interest rate will be increased by 75 basis points to 3.00-3.25% per annum.​

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Morning Market Review


EURUSD
The European currency shows a slight decrease, consolidating near the level of 0.9965 and holding near the local lows of September 8. The EUR/USD pair, having updated local highs from August 17 at the beginning of the week, went down sharply, reacting to the US data released on Tuesday. The Consumer Price Index in August showed an increase of 0.1%, while analysts expected a decrease by a similar amount. In annual terms, inflation slowed down from 8.5% to 8.3%, which turned out to be worse than market expectations at 8.1%. CPI excluding Food and Energy in August accelerated from 0.3% to 0.6% in monthly terms and from 5.9% to 6.3% in annual terms. Additional pressure on the positions of the single currency was later exerted by data from the eurozone: Industrial Production fell 2.3% in July after rising 1.1% in the previous month, although analysts had expected only -1.0%. In annual terms, the decline in production amounted to 2.4% after rising by 2.2% in June. The market fears that with the onset of cold weather and the aggravation of the energy crisis in Europe, the rate of decline in production can only increase.​

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GBPUSD
The British pound is trading in different directions, consolidating near 1.1500. The day before, the GBPUSD pair attempted corrective growth, but the "bulls" managed to demonstrate only limited dynamics against the backdrop of increasing demand for the "safe" dollar and the publication of August statistics on consumer inflation in the UK. Thus, the Consumer Price Index in annual terms in August retreated from its record highs at the level of 10.1% to 9.9%, while analysts expected further growth to 10.2%, and in monthly terms, its pace slowed down from 0.6% to 0.5%. The non-seasonally adjusted Core Producer Price Index fell from 14.4% to 13.7% on an annualized basis in the same period, while the forecast was at 13.9%, and on a monthly basis the same indicator adjusted from 0.8% to 0.3%. The focus of investors today will be statistics from the US on the dynamics of Retail Sales in August. Forecasts suggest a further slowdown in the indicator dynamics against the backdrop of a reduction in Household Spending on non-essential goods. In the UK, Retail Sales data will be released on Friday.​

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XAUUSD
Gold prices show a moderate decline, testing 1700.00 for a breakdown. At the moment, the XAU/USD pair is updating local lows from July 21, retreating under pressure from the growing dollar and expectations of further tightening of the US Federal Reserve's monetary policy next week. The meeting of the regulator will be held on September 20-21 and the interest rate, as expected by most analysts, may be increased by 75 basis points for the third time in a row. In turn, the trend towards some slowdown in inflation in the US and Europe will affect the pace of tightening monetary stimulus by the leading central banks. Now the threat of a recession may come to the fore, but in the case of the American economy, there are no serious concerns for this yet. Today, the focus of investors will be statistics on the dynamics of Jobless Claims, as well as the August data on Industrial Production and Retail Sales in the US. As before, analysts expect near-zero sales dynamics in August.
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Morning Market Review


EURUSD
The European currency shows mixed trading dynamics, consolidating near 1.0000. After trying to consolidate above this level at the beginning of the current trading week, the "bulls" remain under strong pressure and prefer to wait for the publication of the US Federal Reserve's decision next week. The meeting of the American regulator will be held on September 20-21, and the interest rate can be increased in the range between 50 and 75 basis points. However, the markets have recently been actively discussing the possibility of correcting the value by 100 basis points at once, but the probability of such a scenario is estimated at about 25%. In addition, investors are waiting for the publication of European data on consumer prices for August. Current forecasts do not imply a noticeable decrease in the dynamics of inflation, which remains close to record highs at around 9.1%. Energy prices fell slightly, but this was fully offset by higher prices for food and durable goods. The day before, France reported on the dynamics of inflation in August. The Consumer Price Index, calculated according to the EU norm, slightly accelerated in August from 0.4% to 0.5% in monthly terms and from 6.5% to 6.6% in annual terms, which turned out to be worse than the analysts' neutral forecasts.​

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GBPUSD
The British pound is trading with multidirectional dynamics, consolidating near the local lows of September 7. The GBPUSD pair is testing 1.1460 for a breakdown, preparing to end the trading session of the current week with a moderate decline. The positions of the pound remain under pressure amid the deterioration of the outlook for the British economy, suffering from high inflation rates. Wednesday's macroeconomic statistics reflected a slight decline in the Consumer Price Index in August from 10.1% to 9.9%, but this is still a high level, given the active "hawkish" policy on the part of the Bank of England. In addition, according to the forecasts of the regulator itself, the economy is one step away from a recession that could last the whole next year. Adding uncertainty to the market is the arrival of a new Prime Minister, Liz Truss, who will have to find a way out of an acute energy crisis and find additional funds to subsidize soaring utility bills. The next meeting of the Bank of England will be held next week. It was previously supposed to take place on September 15, but due to the death of Queen Elizabeth II, it was decided to postpone it for a week. It is assumed that the interest rate will be increased by 50 basis points to 2.25%.​

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XAUUSD
Gold prices practically do not change, consolidating near 1660. . The XAUUSD pair is holding near the record lows of April 2020, remaining under pressure from expectations about the tightening of monetary policy by the US Federal Reserve. At the meeting of the regulator, which will be held next week, the interest rate may be increased by 75 basis points. Moreover, given the inflation data released this week, some analysts believe that the Fed may decide to correct the value by 100 basis points at once. Recall that the Consumer Price Index in the US in August fell from 8.5% to 8.3%, while forecasts suggested a decline to 8.1%.
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Morning Market Review

EURUSD
The European currency shows mixed trading dynamics, consolidating near 1.0000. Market activity at the beginning of the week remains low, as market participants await the publication of the minutes of the US Federal Reserve meeting, which begins tomorrow. Current forecasts suggest an interest rate hike of at least 75 basis points. About 16% of analysts expect that the value will be corrected by 100 basis points at once, citing last week's macroeconomic statistics on inflation, which slowed down from 8.5% to 8.3% in August, which turned out to be worse than the expected decline to 8.1%. In turn, data released in the eurozone showed that consumer price growth accelerated to a new record high of 9.1%, although fuel prices have been declining recently. The European Central Bank (ECB) is also hastily raising interest rates, which, however, so far only affects the risks of a recession in the region.​

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GBPUSD
The British pound is trading with multidirectional dynamics, testing the level of 1.1400 for a breakdown. At the end of last week, the GBP/USD pair renewed record lows of 1985, retreating after the publication of unsuccessful macroeconomic statistics from the UK, as well as under pressure from the US dollar, the demand for which remains stable. Friday's data showed a sharp drop in Retail Sales of 1.6% after increasing by 0.4% a month earlier, while analysts had expected only -0.5%. In annual terms, the decline in the indicator accelerated from -3.2% to -5.4%, which also turned out to be worse than the -4.2% expected by analysts. On Thursday, investors will focus on the results of the Bank of England meeting. Forecasts suggest another increase in interest rates by 50 basis points to 2.25%. Earlier, representatives of the regulator made it clear that they would continue to tighten monetary policy until the inflation dynamics stabilized. At the same time, the Bank of England expects that the economy will go into recession in the fourth quarter.​

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XAUUSD
Quotes of the XAUUSD pair start the week with a moderate decline, returning to the "bearish" dynamics after a weak attempt at corrective growth at the end of last week, again testing 1665 for a breakdown and remaining under pressure from the prospects for further growth in interest rates by the world's leading financial regulators. This week, meetings will be held at the Bank of Japan, the Bank of England, and the US Federal Reserve. If the Japanese regulator still does not dare to raise the interest rate, the British and the American ones are steadily following the course of tightening monetary policy, discussing only the rate of increase in value. Current forecasts suggest that the US Federal Reserve will adjust the interest rate by 75 basis points, while the Bank of England will stop at 50 basis points, expecting a recession in the British economy in the fourth quarter, which, according to experts, can be overcome no earlier than 2024. Demand for "safe" gold is receiving little support from the worsening energy crisis in Europe, but the downward trend continues.
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Morning Market Review

EURUSD
The EUR/USD pair is testing 1.002 for a breakout; however, investors prefer to wait for new drivers to appear on the market. In particular, the speech of the President of the European Central Bank (ECB) Christine Lagarde will take place today, in which market participants expect to hear hints on the pace of further increase in interest rates by the regulator. In addition, traders will evaluate recession forecasts in the region. At the moment, the threat of a two-quarter decline in the euro area is estimated at about 80%. Also today begins a two-day meeting of the US Federal Reserve, according to the results of which the markets expect another increase in interest rates by 75 basis points. Last week, analysts for the first time spoke about a possible correction of the value by 100 basis points at once, but this probability does not exceed 15-17%. Moderate support for the single currency is also provided by the gradual decline in gas prices, which, in turn, react to growing optimism that Europe will still be able to survive the winter without Russian "blue fuel". However, it should be noted that optimism does not negate the subsidizing of payments, as well as the introduction of rationing of energy consumption.


GBPUSD
The British pound is trading with multidirectional dynamics, consolidating near 1.1430. The GBP/USD pair has been trying to recover since the record lows were updated at the end of last week, but the "bulls" are reluctant to act and expect new growth drivers, one of which may be the decision of the Bank of England to raise interest rates. At the next meeting of the British regulator, which will be held on Thursday, the rate may be adjusted by 50 basis points to 2.25%. In addition, traders are going to evaluate the effectiveness of the measures already taken and receive new inflation forecasts for the near future. Investors are also worried about a possible downturn in the economy. Bank of England officials warned of significant risks of a recession as early as the fourth quarter, which could be overcome no earlier than 2024. Finally, the fiscal policy of the country's new Prime Minister, Liz Truss, adds uncertainty to the market, as tax cuts figured as Truss's election theses.


XAUUSD
Gold prices are slightly declining, consolidating near 1670.00. The pressure on the XAUUSD pair remains ahead of the meetings of the US Federal Reserve and the Bank of England, at which decisions can be made on further tightening of monetary policy. In particular, the US regulator may raise interest rates by 75 basis points, while the British one is likely to limit itself to a correction of 50 basis points. In addition, traders expect to receive updated recession forecasts. The Bank of England still expects that the national economy will go into recession in the fourth quarter, and will be able to get out of it no earlier than 2024. In turn, the demand for gold is supported by expanding economic and geopolitical risks, as the conflict in Eastern Europe does not weaken, and the consequences of the energy crisis increasingly affect economic activity.
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Morning Market Review


EURUSD
The European currency shows mixed trading dynamics, consolidating near 0.9950. Investors are in no hurry to open new trading positions, preferring to wait for the publication of the US Federal Reserve decision on interest rates. However, the euro still traded mainly with a downtrend, which again led to the consolidation of the instrument below the psychological level of 1.0000. Some pressure on the EUR/USD pair was exerted by the deteriorating prospects for the region's economy, in connection with which the authorities are taking decisive action to curb inflation. In particular, the President of the European Central Bank (ECB), Christine Lagarde, spoke the day before, saying that in order to curb a sharp rise in prices, it may be necessary to raise interest rates to levels that will limit economic growth altogether. The current inflation rate in the eurozone is above 9.0% and is unlikely to fall anytime soon. Macroeconomic data released yesterday in Germany pointed to a sharp rise in producer prices. In August, the Producer Price Index rose by 7.9% after rising by 5.3% a month earlier, while analysts expected a slowdown to 1.5%, and in annual terms, the index accelerated from 37.2% to 45.8%, which also turned out to be higher than the estimated 37.5%.


GBPUSD
The British pound is trading with a weak downtrend, testing the level of 1.1370 for a breakdown. The GBP/USD pair is holding just one step away from its record lows, reacting to the prospect of further economic slowdown amid continued high inflation. However, traders prefer to stay out of the market until new drivers are released. Today, the US Federal Reserve will announce its decision on interest rates. It is expected that the US regulator will go for another increase in the value of 75 basis points, bringing it to 3.25%. At the same time, agency officials may signal the continuation of the current course of tightening monetary policy for the near future, given that the pace of slowdown in consumer prices is clearly insufficient. Tomorrow there will be meetings of the Bank of Japan, the Bank of England and the National Bank of Switzerland. The British regulator is also expected to take steps aimed at tightening monetary policy; in addition, officials have repeatedly announced significant risks of a recession in the national economy already in the fourth quarter. Current forecasts suggest that the Bank of England will raise the rate by 50 basis points to 2.25%.


XAUUSD
Gold prices show a slight decline, developing a weak downward momentum formed the day before. The XAU/USD pair is testing 1660.00 for a breakdown, waiting for the publication of new drivers on the market. The focus of investors' attention on Wednesday is the publication of the decision of the US Federal Reserve on interest rates. Investors have already included a 75 basis point increase in current quotes, but it is possible that the regulator will adjust the cost of borrowing immediately by 1.0%. Either way, gold remains under pressure as global central banks hike interest rates. This week, similar steps are also expected from the Bank of England and the National Bank of Switzerland, and the day before the Bank of Sweden raised the value immediately by 100 basis points. In turn, the growing geopolitical risks, as well as the threat of a recession in the global economy, provide moderate support to the precious metal.
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