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The Core PCE Price Index rose 0.2% exactly as expected. Also year over year, we have absolutely no surprise with 1.6% which was also the previous figure.  

This  should not materially change the picture for the Fed and the dollar is slow to react, with only the Canadian dollar standing out with a drop, but that is due to a miss on Canadian GDP:

Canada reported -0.2% m/m instead of -0.1%,, +0.6% q/q, 1.1% y/y and annualized 2.4% instead of 2.8% expected. This is miss on all figures and USD/CAD rises within the  1.30 to 1.3080 range. OPEC meetings today should not change the picture.

The US reported a bulk of figures with the most important one being the  Federal Reserve’s most important inflation figure: the Core PCE Price Index.

The US dollar  was stable with only the Australian dollar standing out with gain against the greenback. At the same time, Canada released its monthly and quarterly GDP update.

Data (updated)

  • Core PCE Price Index: previous +0.1%, expected: 0.2%, actual: +0.2%.
  • Core PCE y/y: 1.6% as expected. Also the deflator data is bang on expectations.
  • Personal Income: prev. +0.4%, exp. +0.4%,  actual: +0.4%.
  • Personal consumption: prev. +0.1%, exp. +0.7%, actual: +1%. – only significant surprise.
  • Canadian GDP m/m: prev. -0.1%, exp. -0.1%, actual: -0.2%.

We later have consumer sentiment and the Chicago PMI. The last day of the month usually results in erratic market movements.  The month of May was quite good for the USD and the GBP.

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