US GDP and PCE inflation eyed ahead of Fed decision as dollar languishes – Forex News Preview
It's a busy few days for US data and fresh out of the oven are S&P Global’s flash PMI estimates for January. US growth stuttered towards the end of 2022 according to both the S&P and ISM surveys and it doesn’t appear that there was a dramatic improvement at the beginning of 2023 as the PMIs point to ongoing contraction in business activity, albeit at a smaller pace.
However, despite the general deterioration in the various indicators, the economy isn’t in a broad-based decline yet and therefore not quite in a recession. Durable goods numbers due on Thursday are expected to show that orders bounced back by 2.5% over the month in December after tumbling 2.1% in the prior month. More encouragingly, GDP is projected to have notched up annualized growth of 2.6% in the final three months of 2022.Weaker consumption poses a danger
However, Friday’s data on personal income and spending will be more crucial in painting a more accurate picture for what to expect for the current quarter amid signs that US consumers have finally started to feel the squeeze from soaring prices. Personal income is forecast to have risen by 0.2% m/m in December, halving from November’s rate of 0.4%, while consumption is expected to have dropped by 0.1% m/m after increasing by 0.1% previously.
If consumer spending does indeed fall in December, it would suggest that the post-pandemic spending spree has run its course and that the Fed’s series of interest rate hikes have finally started to bite. The outlook for consumers remains clouded because although inflation is falling, which should boost real wages in the coming months, job losses are on the rise, especially in the tech sector.Inflation is falling
Nevertheless, the latest PCE inflation figures should offer some relief on Friday if they support the market view that a Fed pivot is nearer than what policymakers would like to publicly acknowledge. The core PCE price index, which is favoured by the Fed, is forecast to have quickened slightly to 0.3% on a month-on-month basis, but the 12-month rate is expected to have edged further down from 4.7% to 4.4%, which would make it the lowest since October 2021.
If the downward trend in core PCE is maintained and there aren’t upside surprises in any of the other data points, particularly personal consumption, the dollar is likely to come under pressure. The greenback’s gauge against a basket of currencies is drifting near eight months lows, while the euro has scaled a nine-month peak versus its US counterpart.Can the dollar regain the front foot?
But the single currency has just reached a key technical level – the 50% Fibonacci retracement of the January 2021-September 2022 downtrend, which may prove to be a more challenging barrier to overcome. Furthermore, with the FOMC and ECB decisions due on February 1 and 2, respectively, some investors might sit on the sidelines until then.
Still, a soft set of data has the potential to lift the euro above the 50% Fibonacci of $1.0942, opening the way for the $1.11 handle. Alternatively, if inflation doesn’t slow as fast as anticipated, the euro could seek immediate support in the $1.0790 region before heading towards its 50-day moving average at $1.0590.In the bigger picture, the odds might be stacked against the dollar, as the pace of monetary policy tightening between the Fed and other central banks begins to diverge in 2023 and the US economy teeters on the brink of recession. But that doesn’t mean to say that there is cause to fall completely out of love with US assets, as this rotation out of the dollar could merely be an adjustment after investors became too optimistic about America’s growth prospects and overly pessimistic about the rest of the world.
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.