Core PCE inflation disappoints +0.1% m/m

The Fed can remain in no rush to raise rates: its favorite inflation measure is not going anywhere fast: only 0.1% m/m. The upside is that y/y, the figure remains unchanged at 1.7%. This is still below the 2% target but not too terrible.

Personal income rises 0.2%, slightly better than expected, and personal spending is up 0.1%, as expected, but on top of a significant downwards revision. The goods trade balance comes out at a deficit of 62.9 billion, as expected.

The US dollar ticks a few pips down. It is important to remember that the trading volume is still low due to the  Easter holiday in many markets.

The US released a bulk of figures: the core PCE price index, which is the Federal Reserve’s most important inflation measure, was expected to rise by 0.2% m/m in February, slower than 0.3% in January. Year over year, we had 1.7% last time. Both  personal income and personal spending carried expectations for +0.1% m/m after 0.5% beforehand, before revisions.

Currencies hardly moved before the publication, as many traders still enjoy the Easter holiday.

Just before the weekend, and as many traders were already away, the US released the final read of Q4 GDP. It beat expectations with 1.4%, better than 1% previously estimated and expected. However, the downside is that with slow growth in Q1 2016, it  is becoming harder to see the momentum in the world’s No. 1 economy.

We will later hear some news about the housing sector: pending home sales are due.