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1:00 PM · 30 September 2022

💲Dollar strengthens ahead of PCE

Today at 1:30 pm BST investors will be served with PCE inflation data, the preferred measure by the Federal Reserve. Of course, today's readings will not change much in terms of Fed's plans for this year, but data may possibly fuel market hopes for another Pivot if inflation curbs.

Core PCE inflation is, however, expected to accelerate to 4.7% YoY from 4.6% YoY. It is worth noting that this is a very delayed measure as it concerns August. The core PCE inflation is expected to increase by 0.5% MoM from the previous reading of 0.1% MoM. Market attention will also be focused on reading the entire PCE inflation, which recently rose by 6.3% YoY in July, and in August it may drop to 6.0% YoY. Apart from that, the market will be looking at spending, the consensus of which indicates an increase of 0.2% MoM, while Americans' incomes are to increase by 0.3% MoM.

EURUSD is clearly retreating before the publication. Contracts also reduce gains. If today's reading indicated a decline in inflation, then it could raise hopes for a more dovish approach from central banks. However, if core inflation rises as expected, then the Fed will have another reason to raise interest rates. Source: xStation5

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