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  • 10-year US Treasury bond yield stays little changed on Friday.  
  • US Dollar Index clings to daily gains near mid-98s.
  • US annual core PCE Price Index is expected to remain unchanged at 1.6% in July.

After closing the previous two days in the positive territory supported by risk-on flows, the USD/JPY pair had gone into a consolidation phase and been having a tough time setting its next short-term direction ahead of key macroeconomic data releases from the United States. As of writing, the pair was down 0.14% on the day at 106.33.

The upbeat market sentiment in the second half of the week amid rising hopes of the US-China continuing talks without escalating the trade conflict any further made it difficult for safe-havens to find demand. The 30-year US Treasury bond yield, which slumped to a record low earlier in the week, stage a decisive recovery and major global equity indexes posted strong gains. As of writing, the S&P 500 Futures was up 0.6% on the day, suggesting that Wall Street will extend its rally into a third day on Friday.

Eyes on key US data

Meanwhile, ahead of today’s key macroeconomic data releases, the US Dollar Index is staying quiet near the multi-week highs that it set at 98.61 earlier in the day.

The US Bureau of Economic ANalysis (BEA) today will release the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation. Markets expect the core version of the data to remain unchanged at 1.6% in July. A stronger-than-expected reading could weigh on expectations of the Fed opting out for an aggressive rate cut in July and provide a boost to the Greenback. Personal spending, personal income, and consumer confidence data will also be featured in the US economic docket on Friday.

Technical levels to watch for