The PCE price index, the Fed’s favorite inflation benchmark, is expected to show a rise of 0.3% mom and 2.4% yoy in January. US Inflation is still heating up in the latest CPI & PPI figures, which point to a resilient US economy, as well as comments from several Fed officials that led market participants to push back the first pivot estimate of the year from March to June.
US stocks closed marginally lower on Wednesday (28/02/24), a day ahead of key inflation data readings that will heavily influence expectations of interest rate cut timing by the Federal Reserve. The PCE price index, the Fed’s favorite inflation benchmark, is expected to show a rise of 0.3% mom and 2.4% yoy in January.
The US reported the important ECONOMIC INDICATOR Consumer Confidence which fell to 106.7 for February, from 110.9 in the previous month; a 3-month low, with Inflation as the culprit weighing on consumer confidence.
NASDAQ led the gains in the mostly flat US major stock markets, gaining 0.4% as investors returned to targeting depreciating Technology stocks, helped by positive sentiment from retail sectors such as Macy’s and Lowe’s which reported better than expected quarterly results, ahead of this week’s important Inflation report.
Prior to Thursday’s Personal Consumption Expenditures (PCE) price index data, market participants are also looking forward to the 4th quarter US GDP released on Wednesday, which is expected to come out at 3.3% qoq, lower than 4.9% in the previous quarter; indicating that although the US economy seems to be more resilient than some other developed economies, the economic slowdown is evident.
A number of global stock indexes fell after hitting record levels last week, as investors took a pause ahead of key economic data releases from the US amid emerging US corporate earnings reports; while Crude oil prices rallied on the back of concerns over disruptions to sea shipping lanes.
US10YT is testing MA20 Support at 4.208% after starting to weaken below MA10, making 4.278% the closest Resistance at the moment.
US INFLATION will be the highlight of the week with Personal Consumption Expenditures (PCE) price index data awaited on Thursday. Economists have forecast a 0.3% rise in January after 0.2% in the previous month.
On Wall Street, the Dow Jones Industrial Average rose 0.16% and the S&P 500 gained 0.03% as both posted new closing highs, amid optimism over strong results from Nvidia, while bond yields fell as markets bet that the Federal Reserve will not cut interest rates until at least June.
