Calmer Markets Shift Focus to US PCE Inflation Data
| Action Insight Daily Report 7-26-24 |
Calmer Markets Shift Focus to US PCE Inflation Data |
The forex markets have calmed down considerably in Asian session after a week of significant wild ride. Despite the pause, the risk-averse sentiment persists. Yen, which has led the charge this week, is starting to take a breather. It remains the runaway leader, followed by Swiss Franc and then Dollar. Meanwhile, New Zealand Dollar has overtaken Australian Dollar as the worst performer, with Canadian Dollar trailing as a distant third. Euro and Sterling are trading in the middle of the pack, with Euro showing a slight edge. Today's spotlight is on US PCE inflation report. Both the headline and core PCE are anticipated to decrease to 2.5% in June, mirroring the CPI report's indication of ongoing disinflation. A 25bps rate cut by Fed in September is fully priced in by the markets. The primary question has shifted to whether Fed will implement two or three rate cuts this year. Fed fund futures currently suggest there is a 60% chance that the federal funds rate will end the year at 4.50-4.75%, a reduction of 0.75% from the current level. |
EUR/JPY Daily Outlook Daily Pivots: (S1) 165.33; (P) 166.46; (R1) 168.09; More... A temporary low should be in place at 164.81 with current recovery. Intraday bias in EUR/JPY is turned neutral first. But risk will stay on the downside as long as 169.98 support turned resistance holds. On the downside, decisive break of 164.29 support turned resistance will indicate that larger scale correction is underway for 155.91 fibonacci level. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:30 | JPY | Tokyo CPI Y/Y Jul | 2.20% | 2.30% | | 23:30 | JPY | Tokyo CPI Core Y/Y Jul | 2.20% | 2.20% | 2.10% | | 23:30 | JPY | Tokyo CPI Core-Core Y/Y Jul | 1.50% | 1.80% | | 12:30 | USD | Personal Income M/M Jun | 0.40% | 0.50% | | 12:30 | USD | Personal Spending Jun | 0.30% | 0.20% | | 12:30 | USD | PCE Price Index M/M Jun | 0.10% | 0.00% | | 12:30 | USD | PCE Price Index Y/Y Jun | 2.50% | 2.60% | | 12:30 | USD | Core PCE Price Index M/M Jun | 0.20% | 0.10% | | 12:30 | USD | Core PCE Price Index Y/Y Jun | 2.50% | 2.60% | | 14:00 | USD | Michigan Consumer Sentiment Jul F | 66 | 66 |
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