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Fed favorite inflation measure remains at 1.3% y/y

Core PCE Price Index, the Federal Reserve’s preferred measure of inflation, was expected to tick up 0.1% m/m in January and came out bang on expectations. December’s year over year rise was 1.3% and the fresh data for January is also +1.3%.

The US dollar was somewhat stronger against many currencies towards this publication, but not against the euro which enjoyed stronger than expected data.

Update:  ISM Manufacturing PMI slips to 52.9 – below expectations  

More data:

  • Personal income was expected to rise 0.4%. The actual number is +0.3%.
  • Personal spending carried expectations for dip of 0.1%. The actual number is -0.2%.
  • The non-core PCE rose 0.2% m/m.

All in all, the data is not very impressive, but the most important takeaway is that there is no reason to worry about core inflation, which is part of the Fed’s mandate.

Later we have the ISM manufacturing PMI, which includes a first hint towards Friday’s Non-Farm Payrolls: the internal employment component.

More:  Get Ready For The Next Leg Lower In EUR/USD Coming Weeks

In this week’s podcast, we cover  Yellen & the hike, AUD & CAD rate previews, Jobless claims vs. USD & Greek back burner

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.