The Core Personal Consumption Expenditure Price Index, aka Core PCE, stands at a level of 1.4% y/y in February. higher than 1.3% in January. Last week, we learned that the general Core CPI also moved up, and stands at 1.7% y/y.
While this is not steaming hot inflation in any way, it provides yet another sign that in one of the Fed’s mandates, everything is A-OK.
Month over month, Core PCE rose 0.1%, as expected and like the previous month. Personal income rose 0.4% m/m on top of an upwards revision to January’s number. Personal spending fell short with a rise of only 0.1% in February.
The US dollar was slightly stronger in the wake of the new week, especially against the yen. USD/JPY flirted with 120. The greenback is also gaining ground against the euro and the pound, but movements are move contained.
After a long losing streak of US indicators, the mix of indicators became somewhat more positive last week: with beats in inflation, new home sales and jobless claims. Nevertheless, the fall in durable goods orders is certainly worrying.
The big event of the week awaits us at the end: Non-Farm Payrolls. This is the definitive number for the Fed, that focuses more on jobs than on inflation. The publication, on Good Friday, means that movements could be extreme due to low liquidity.
More: EUR/USD: Correction Or Trend Change? – Nordea