EUR/USD

The EUR/USD pair shows a slight growth, holding near 1.0700. Activity in the market remains quite low, after last week the single currency showed first a sharp increase, and then an equally confident decline. As a result, the "bears" managed to update the local lows of May 1, from which the instrument is now trying to rebound. Today, the market's focus is on inflation statistics in Italy: the Consumer Price Index remained at the same levels: 0.2% in monthly terms and 0.8% in annual terms, as analysts expected. Forecasts for the eurozone as a whole, which will be published on Tuesday, also call for no change from the previous 0.2% and 2.6% in monthly and annual terms, respectively. Traders are trying to gauge European Central Bank (ECB) officials' next steps on monetary policy based on inflation dynamics, but regulator officials are finding it difficult to set a time frame for new interest rate cuts, citing uncertainty about rising consumer prices: in France, the CPI fell from 0.2% to 0.1% on a monthly basis and from 2.7% to 2.6% on an annual basis. The position of the US currency, in turn, remains quite strong amid growing doubts regarding the scenario, which involves two adjustments to the US Federal Reserve's borrowing costs by the end of 2024. Official forecasts from the American regulator suggest a rate of 5.10% by the end of this year, which is one and a half full reduction by 25 basis points. Most likely, the Fed will begin the transition to "dovish" rhetoric in September.

GBP/USD

The GBP/USD pair is trading with a slight decline, trying to develop the downward dynamics formed at the end of last week, when the local lows of May 17 were updated. The instrument is testing 1.2680 for a breakdown; however, market participants are in no hurry to open new positions ahead of the publication of macroeconomic statistics from the UK. On Wednesday, May inflation data will be presented: experts expect the Consumer Price Index to slow down from 2.3% to 2.0%, and the Core CPI from 3.9% to 3.5%. In turn, the Producer Price Index Input is projected to decline by 0.3% after rising 0.6% in the previous month, and the PPI Output — from 0.2% to 0.1%, while the Retail Price Index is likely to adjust from 3.3% to 3.1%. UK inflation data will hit the market the day before the Bank of England meeting, at which interest rates could be cut by 25 basis points. Analysts at Bank of America Corp. assume that officials will keep the rate at 5.25%, fearing undesirable consequences from premature easing of the monetary rate. Tomorrow in the US, May data on Retail Sales will be published: the indicator is projected to grow by 0.3% after zero dynamics in the previous month, and sales volumes excluding cars may add another 0.2%. Today the market will receive statistics on NY Empire State Manufacturing Index, which in June may rise from –15.6 points to –13.0 points.

AUD/USD

The AUD/USD pair is showing a moderate decline, developing the corrective downward trend that formed at the end of last week. The instrument is testing 0.6600 for a breakdown, while trading participants analyze statistics from the US published last week. The market's focus was on the results of the US Federal Reserve meeting, as a result of which the interest rate was kept at 5.50%. At the same time, for the first time in three months, officials published updated forecasts for the dynamics of the indicator, according to which by the end of 2024 the cost of borrowing will be reduced from 5.50% to 5.10%, which is significantly higher than the 4.60% that was previously assumed. In the follow-up statement, the Chair of the regulator, Jerome Powell, again warned markets against excessive expectations regarding the pace of monetary easing, noting the continued risks of sticky inflation and the fairly stable overall health of the US economy. However, investors still tend to overestimate existing forecasts: for example, the main scenario assumes two full interest rate cuts of 25 basis points each to 5.00% at the end of 2024. Meanwhile, macroeconomic statistics from China had a mixed impact on the dynamics of the instrument: Industrial Production volumes in May decreased from 6.7% to 5.6% with preliminary estimates of 6.0%, and Retail Sales accelerated from 2.3% to 3.7%, significantly ahead of expectations at 3.0%.

USD/JPY

The USD/JPY pair is showing flat trading, holding close to 157.45 and the local highs of April 29, updated at the end of last week. Market activity remains subdued as investors await the release of data from Japan and the United States, and also try to predict the US Federal Reserve's next steps after last week's near-term and long-term interest rate forecasts, which put the rate at 5.10% at the end of 2024, which turned out to be significantly higher than the previous estimate of 4.60%. Trading participants still expect that the regulator may begin to soften its rhetoric during its September meeting. At the same time, the markets are counting more likely on two full-fledged reductions in the indicator of 25 basis points each, which is somewhat at odds with the official forecasts. Last week, the Bank of Japan also held a meeting: as expected, the regulator kept borrowing costs at zero, after raising them in March for the first time since 2007 (the rate remained negative since 2016). At the same time, the officials said that they would abandon targeting the yield on 10-year government bonds, and would also begin a gradual reduction in the volume of bond repurchases amounting to 38.0 billion yen per month from July. Macroeconomic statistics from Japan put moderate pressure on the yen: Industrial Production fell by 0.9% in April after –0.1% in the previous month, and in annual terms the figure dropped from –1.0% to –1.8%. Today, trading participants drew attention to a decrease in Machinery Orders in April by 2.9% after an increase of 2.9% a month earlier, and in annual terms the dynamics slowed down from 2.7% to 0.7%.

XAU/USD

The XAU/USD pair shows slight negative dynamics, retreating from local highs updated last Friday. The instrument is trading around 2325.00, awaiting the emergence of new movement drivers. Quotes are currently supported by evidence of further weakening of price pressure in the US, which could ultimately lead to lower borrowing costs. Last week, the US Federal Reserve kept the interest rate unchanged at 5.50%, and for the first time in three months published forecasts for the future vector of the indicator, according to which by the end of 2024 the rate will be reduced to 5.10% compared to 4.60% the analysts expected in March. This amounts to one and a half full-fledged reduction of the indicator by 25 basis points, but now investors are inclined to expect two adjustments before the end of the year to 5.00%, the first of which, with a probability of about 67.0%, could take place in September. A continuation of the policy of easing monetary conditions is expected from the European Central Bank (ECB) and the Bank of England, which will meet on Thursday, June 20. The weakening global demand for physical gold, particularly in India and China, also puts some pressure on quotes.