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Today we will get a lot of economic data, although the focus will mainly be on the Personal Consumption Expenditures report in the United States. In the European session we will get Preliminary inflation data For France, Spain and Italy, while it may have a slight impact on the euro, it should not change market prices.
Moving into the US session, we get Canadian GDP, US PCE and the final reading of the University of Michigan Consumer Confidence Survey.
14:30 GMT/08:30 ET – US PCE for May
The US core PCE is expected to come in at 2.6% YoY vs. 2.7% previously, while the m/m is expected to come in at 0.0% vs. 0.3% previously. The core PCE is expected to come in at 2.6% YoY vs. 2.8% previously, while the m/m is expected to come in at 0.1% vs. 0.2% previously.
Forecasters can reliably estimate PCE as soon as the CPI and PPI are released, so the market already knows what to expect. This report won’t change anything for the Fed. The central bank remains in a “wait and see” mode until at least September.
In my opinion, a lot will depend on the upcoming inflation data. I think the Fed will be more tolerant if we get a good inflation report in July. Then, if we get more good numbers in August, Fed Chairman Powell is more likely to pre-commit to a September rate cut at the Jackson Hole Symposium.
Core US CPI (YoY)
Central bank speakers:
- 10:00 GMT/06:00 EDT – Fed’s Barkin (Neutral – Voter)
- 16:00 GMT/12:00 EDT – Bowman, Fed Member (Hawk – Voter)
