Over the past week, the dollar has managed to improve its positions, somewhat thanks in part to the text of the minutes of the meeting of the Federal Commission for Open Market Operations. The regulator once again expressed its commitment to further gradual tightening of monetary policy. True, without specifics regarding the rate of increase in the refinancing rate. In any case, it is clear that the rate will be raised further. However, the strengthening of the dollar was limited to US macroeconomic statistics, which is beginning to raise more and more questions. So, home sales in the secondary market declined by 3.2%, from 5.57 million to 5.38 million, which once again indicates a decrease in consumer activity. However, in itself, the decline in activity still does not say anything, but, given other indicators, such as inventories and the growth rates of industrial production, certain signs of the beginning of the crisis of overproduction are visible. Nevertheless, it is too early to make any forward-reaching conclusions, especially since the number of applications for unemployment benefits decreased, primary from 229 thousand to 222 thousand, and secondary, from 1,948 thousand to 1,875 thousand.
In addition to the text of the minutes of the meeting of the Federal Commission for open market operations, the text of the minutes of the ECB meeting on monetary policy was published. Its content was so faceless that the market simply ignored the event. In the text, not only that there was nothing new, so also, no word was being said about further plans of the regulator. But, in addition, in Europe there were data on inflation, which showed its slowdown from 1.4% to 1.3%. It turns out that inflation has slowed for the second month in a row. Naturally, in such conditions, the ECB will not even stutter about any tightening of monetary policy. Another bad news for the single European currency were the data on the construction sector, whose growth rates slowed from 2.7% to 0.5%.
The pound looked a little better, as it was supported by a series of data. In particular, the number of applications for unemployment benefits fell by 7.2 thousand. Although the unemployment rate rose from 4.3% to 4.4%. However, this was offset by a further increase in wages, whose growth rate accelerated from 2.3% to 2.5%. Also, public sector borrowing declined by 11.6 billion pounds. However, the pound was greatly hampered by GDP data for the second quarter, and although this was only the second estimate, they showed that economic growth rates slowed from 1.8% to 1.4%.
Best of all looked like a ruble, which almost did not budge. Although the week started with the fact that the unemployment rate rose from 5.1% to 5.2%, and the growth rate of retail sales slowed from 3.1% to 2.8%. Despite all this, the ruble remained extremely stable. This is largely due to the continued interest in OFZ, as seen from the yield of ten-year bonds. Even taking into account the fact that the economy is not doing well and many external factors are imposed on it, the yield of OFZ is not much higher than historical lows. Consequently, the cost of borrowing for the Ministry of Finance is extremely low, so there are no problems with financing a budget deficit. The interest itself is preserved due to the fact that the size of the public debt is lower than all available reserves.
This week will begin with the publication of data on sales of new homes in the US, which may grow by 3.2%. But orders for durable goods may be reduced by 2.2%, which will cause even more worries about consumer activity. The deceleration of housing prices is also expected to slow down from 6.4% to 6.3%, although this will be compensated by the growth in sales of new houses. The next assessment of GDP growth for the fourth quarter should confirm the fact of accelerating economic growth from 2.3% to 2.5%. However, at the very end of the week, the personal income is expected to grow by 0.3%, and expenses by 0.2%. Revenues are not the first month growing faster than costs, which makes thinking about the risks in the US economy even more.
Despite the fact that US statistics may be more negative for the dollar, the single European currency does not have much chance of strengthening. On the one hand, the growth rate of consumer lending may grow from 2.8% to 2.9%, while the unemployment rate remains at around 8.7%. Nevertheless, inflation should slow from 1.3% to 1.2%. If this is confirmed, then no tightening of the ECB monetary policy before the end of the year can not be dreamed of.
The United Kingdom has already released data on approved applications for mortgages from the BBA, the number of which increased from 36,085 to 40,117. Similar data from the Bank of England should show growth from 61,039 to 62,000. But on this, good news for the pound end. The volume of consumer lending should reach 1.4 billion pounds against 1.5 billion pounds last month. The rate of growth in housing prices may slow from 3.2% to 2.6%, and given the importance of the real estate market, from the point of view of the investment attractiveness of the UK economy, this does not promise the pound anything good.
In Russia, there is no significant data, so everything depends on the state of affairs in the debt market. Investors already appreciated the news that by the size of the gold reserve, Russia rose to the fifth place in the world, ahead of China. This further increases the reliability of investments in OFZ. Following this, the Bank of Russia's international reserves are expected to grow from 447.7 billion dollars to 453.8 billion dollars. Thus, if there is not another political scandal actively being exaggerated in the Western media, the ruble can even strengthen.
By the end of the week, the euro / dollar pair may fall to 1.2225, and the pound / dollar to 1.3900. The dollar / ruble pair will also decline, which means the ruble is strengthening to about 55.5000. However, after this, it will gradually lose its positions.
