Title:
US PCE Data Keeps Fed Rate Cut Hopes Alive as Inflation Nears 2% Target
Content:
Last week, the US data kept Fed rate cut hopes on track as inflation continued its path towards the 2% target. Consumer spending remains robust, signaling a potential 50 bps cut. However, the upcoming Jobs report could change the conversation if the US economy delivers a weak jobs print.
Heading into the Labour Day weekend, the rate hike probability for the September 18 meeting has been adjusted once more. The likelihood of a 50 bps cut has decreased as strong US data gave investors something to consider. The CME chart shows the probability of a 50-bps cut declining from 36% to 30% last week.
Commodity prices fluctuated during the week due to geopolitical fears and OPEC+ production plans. Oil prices surrendered early week gains after news of OPEC+ planning to increase output. Gold prices struggled within a tight range, influenced by the expected rate cuts by the Federal Reserve already being priced in.
Despite the positive end to August for Wall Street indexes, with the S&P 500 down 0.03% and the Dow Jones up 1.5% for the month, caution is advised moving forward. Market sentiment shifted during August, as shown by the change in volatility through the month.
Looking ahead, the US jobs data is expected to be a key market-moving event. The debate now centers on the size of the initial cut expected on September 18, with a 25 bps cut leading the race. A softer jobs report could impact the Fed rate cut decision and rally risk assets.
In Asia, key data releases from Australia, China, and Japan will be closely watched. Australia’s GDP print will be crucial for the Reserve Bank of Australia, potentially alleviating concerns of further rate hikes. China’s official PMI numbers are expected to remain steady, while Japanese data indicates an economic recovery, supporting continued rate hikes by the Bank of Japan.
In Europe and the US, the week is data-heavy. The US markets will be closed on Monday for Labor Day, with a focus on the upcoming US jobs data and its impact on the Fed rate cut decision.
Analysis:
In summary, the US PCE data and upcoming jobs report are crucial factors influencing the Fed rate cut decision. Commodity prices, market sentiment, and global economic data also play a significant role in shaping market movements. Investors should stay informed about key data releases from major economies like Australia, China, and Japan, as they can impact global financial markets. Understanding these factors can help individuals make informed decisions about their investments and financial planning. Title: US Dollar Index (DXY) Outlook: NFP Jobs Data to Impact Fed Rate Cut Expectations
As the new week begins, the UK and Euro Area will see major economic data releases, while all eyes are on the US for the NFP and jobs report. The US Dollar Index (DXY) is at a critical point, with potential for a recovery or further decline depending on the upcoming data. Investors will be closely watching for any signs of a 50 bps rate cut by the Fed. The technical analysis suggests key resistance levels for the DXY, with implications for the broader financial markets. Stay tuned for the latest updates and analysis on the DXY and its impact on global currencies and markets.
Analysis:
The article discusses the upcoming major economic data releases in the UK, Euro Area, and US, with a focus on the impact on the US Dollar Index (DXY). The US jobs report is expected to be a key driver for market sentiment, with potential implications for Fed rate cut expectations. The technical analysis of the DXY suggests key resistance levels to watch for, which could have significant implications for the broader financial markets. Investors should pay close attention to the upcoming data releases and their impact on the DXY and global currencies.