The closer the Fed meeting is, which until recently was considered as a key event for the whole year, the more nervousness there is in the markets since the incoming information is not only contradictory, but also essentially allows us to develop any strategy, both towards the normalization of monetary policy, and side of additional mitigation. Each of these extremes can be easily and convincingly justified as the only correct strategy.

Great Britain:

On Wednesday, data on producer prices and consumer inflation for August were published, absolutely all indicators show an excess of both data for July and forecasts.

The base index reached a value of 3.1%, against 1.8% a month earlier. In the old days, the Bank of England would have reacted instantly by raising rates, and this decision would have been made unanimously since it would have been obvious. But now, everything is different – any actions will be taken only after the Fed presents its strategy.

The Office for National Statistics has published a summary table of forecasts for the UK economy, which were presented by 19 major banks. There is an improvement in unemployment forecasts, higher inflation than previously expected, and stable GDP growth in both 2021 and 2022.

It is clear that such optimism should be supported in the financial markets. However, the strange thing is that the yield of 10-year UK T-bills averaged 0.790% on Tuesday morning, and today, it is 0.775%. That is, players are buying in response to the optimistic data on the economy, and not selling bonds. They buy a protective instrument in response to improving prospects.

The head of the Bank of England recently told parliament that he is one of 4 Cabinet members who believe that the necessary conditions for a tighter monetary policy have already been achieved. Another confirmation has been received, but yields are falling, that is, the market believes that a rate increase will not happen in the near future anyway.

This oddity gives us reason to assume that the predicted surge in activity and rapid recovery of the global economy will not happen, and financial markets will be under the threat of sales anytime soon. It is unclear what will be the cause of this, the delta strain, or some other reason, but the probability of GBP/USD moving upward amid good data is low. It is more likely that trading will continue in the range of 1.3720-1.3890 waiting for the results of the Fed meeting.

Australia and New Zealand:

New Zealand's GDP growth exceeded forecasts. There is an improvement in all components of the calculation, including a 3.4% increase in disposable income, which automatically improves forecasts for consumer demand and, accordingly, inflation. After the failure a year ago, the pace of recovery is the highest in 20 years.

But the story with yields is exactly the same as in the UK. Despite the optimistic data that allows us to count on a rate increase in October due to the threat of overheating of the economy, the yield of 10-year bonds on Thursday morning is 1.793%, while it reached 1.905% at the opening of the week.

Similarly, the Australian data – consumer price inflation expectations rose to 4.4% in September against 3.3% a month earlier, but there is no growth in profitability either. There is also a negative report on the labor market in the country, which showed a decrease in the level of employment (analogue of Nonfarms), so the absence of growth in profitability is still supported by statistics.

It can be assumed that NZD/USD pair will remain close to the current levels, and movement to the local high of 0.7314 may be postponed at least until the middle of next week. The AUD/USD pair remains under pressure. The target of 0.7108 is still relevant. Meanwhile, the NZD/AUD cross-pair does not show any signs of a reversal.

The general conclusion is that commodity currencies are under pressure, despite both the increase in oil prices and decent statistics. Oil prices may have a short-term impact, as the current growth is largely due to production disruptions due to the recent storm.