Get started

Pcepriceindex

US Core PCE Price Index Analysis25th July DXY: Consolidating between 104.20 and 104.40 Needs to break 104.60 to retest 104.80 (0.2% on Core PCE) NZDUSD: Look for reaction at 0.5865, Sell 0.5855 SL 20 TP 75 AUDUSD: Sell 0.6566 SL 20 TP 70 USDJPY: Buy 154.65 SL 50 TP 100 GBPUSD: Buy 1.2880 SL 25 TP 65 EURUSD: Sell 1.0830 SL 20 TP 75 (Hesitation at 1.0810) USDCHF: Look for reaction at 0.8840 (Depends on DXY volatility) USDCAD: Middle of support & resistance level Gold: DXY strength, XAUUSD break 2365 to trade down to 2350
TVC:DXY
by JinDao_Tai
U.S Core PCE (FEDS FAVOURITE METRIC)U.S Core PCE (FEDS FAVOURITE METRIC) Rep: 2.8% ✅ Slight decrease as Expected ✅ Exp: 2.8% Prev: 2.9% U.S. Headline PCE Rep: 2.4% ✅ Notable Decrease Expected ✅ Exp: 2.4% Prev: 2.6% Both Headline & Core PCE have come in lower and as expected; ✅ Core decreased from 2.9% to 2.8% ✅ Headline PCE decreased from 2.6% to 2.4% Historical Core PCE Norms On the chart you can see that since 1990 the typical Core PCE range is between 1 - 3% (red dotted lines on chart - green area). We are slowly getting back down into this more historically moderate level. We have fallen below the 3% level and down into the historically moderate zone for PCE levels. The Federal Reserve have advised that Core PCE is expected to decline to 2.2% by 2025 & finally reach its 2% target in 2026. At this rate we might reach 2% a little sooner than that. For the full breakdown of the Core and Headline PCE and to know the differences between PCE and CPI, please review the Macro Monday I previously released which explains it all (see below link). PUKA
ECONOMICS:USCPCEPIAC
by PukaCharts
U.S Core PCE Price Index (MoM)ECONOMICS:USCPCEPIMM Core PCE prices in the US, which exclude food and energy, rose by 0.2% from the previous month in December of 2023, aligned with market estimates, and picking up slightly from the 0.1% increase in November. From the previous year, Core PCE prices edged 2.9% higher, undershooting market estimates of 3% to mark the lowest reading since February 2021. The data extended the disinflation trend in prices measured by the Federal Reserve’s preferred gauge, consistent with previous signals of rate cuts to be delivered this year. Regarding the whole national PCE that includes energy and food, prices rose by 0.2% from the prior month and 2.6% from the prior year, consistent with expectations. Prices for goods rose by less than 0.1% from 2022, while those for services remained elevated at 3.9%. source: U.S. Bureau of Economic Analysis
ECONOMICS:USCPCEPIMM
by Mr_J__fx
edges up as US inflation print fuels Fed rate cut speculation 26 January 2024, 17:04 •EUR/USD rises in North American trading, buoyed by softer US core PCE inflation data. •Fed's core PCE index fall to 2.9% raises hopes for interest rate cut, aiding EUR/USD's climb. •Mixed European signals: German consumer confidence falls, Spanish unemployment at 16-year low, ahead of Fed decision. The EUR/USD gained some 0.14% in early trading during the North American session as prices in the United States (US) remained above the US Federal Reserve’s goal but eased compared to November’s figures. The major trades at 1.0866 after diving to a low of 1.0812. The Euro got a life-line of a softer US PCE report The Fed’s preferred gauge for inflation, the Personal Consumption Expenditures (PCE), rose 2.6% in the 12 months to December, as expected on an annual basis, while core PCE dipped from 3.2% to 2.9% and below forecasts. After the data, the EUR/USD climbed sharply and clocked a daily high of 1.0885 before retreating toward current exchange rates, as the data reaffirmed investors' speculations that the Fed could begin cutting rates by the summer. The CME FedWatch Tool depicts the odds for a quarter of a percentage rate cut by the Fed at 51.4%, while 50 basis points stand at 37.8%. Nevertheless, US Treasury bond yields reversed its course, climbing higher and putting a lid on the EUR/USD rise. Meanwhile, data across the pond showed that German consumers remain pessimistic amidst economic uncertainty after the GfK Consumer Confidence for February plunged from .25.4 in January to -29.7. In Spain, the Unemployment Rate fell to levels last seen in 2007, from 11.84% to 11.76% in the last quarter of 2023, according to an INE report. Ahead of the next week, the main spotlight would be the Federal Reserve’s monetary policy decision on January 30-31. EUR/USD Price Analysis: Technical outlook Following the US data release, the EUR/USD advanced towards 1.0900 but failed to break yesterday’s high, which could pave the way for a pullback to the 200-day moving average (DMA) at 1.0843. Downside risks are seen at today’s low 1.0812, followed by the 1.0800 figure. Conversely, if buyers lift the spot prices above 1.0900, as they eye the 50-DMA at 1.0920.
Long
by sniper_2022
1
U.S. Core PCE Comes in Lower than Expected U.S Core PCE (FEDS FAVOURITE METRIC) Rep: 2.9% ✅ Lower Than Expected ✅ Exp: 3.0% Prev: 3.2% U.S. Headline PCE Rep: 2.6% ✅ In Line with Expectations ✅ Exp: 2.6% Prev: 2.6% Historical Core PCE Norms On the chart you can see that since 1990 the typical Core PCE range is between 1 - 3% (red dotted lines on chart). We are slowly getting back down into this more historically moderate level. We have just fallen below the 3% level and down into the historically moderate zone for PCE levels. The Federal Reserve have advised that Core PCE is expected to decline to 2.2% by 2025 & finally reach its 2% target in 2026. At this rate we might reach 2% a little sooner than that. For the full breakdown of the Core and Headline PCE and to know the differences between PCE and CPI, please review the Macro Monday I previously released which explains it all (in the comments below). PUKA
ECONOMICS:USCPCEPIAC
by PukaCharts
USD/JPY yawns after BoJ CPI slipsThe Japanese yen is showing little movement on Tuesday. In the European session, USD/JPY is trading at 142.39, down 0.04%. Japanese inflation indicators have been heading lower. Last week, Core CPI, which excludes fresh food but includes fuel costs, dropped in November from 2.9% to 2.5%. On Tuesday, the Bank of Japan's Core CPI index followed suit and declined to 2.7% in November, down from 3.0% in October. Core inflation may have dropped in November, but it has exceeded the BoJ's 2% target for well over a year and speculation is high that the central bank will shift policy and lift interest rates from negative territory, perhaps in early 2024. Such a move would mark a sea change in monetary policy, after decades of negative rates. We have seen that tweaks to the yield curve control program have triggered sharp movement from the yen, and it's a safe bet that a shift in rate policy would send the yen flying higher. BoJ policy meetings have become market-moving events and every comment from a senior BoJ official has the potential to shake up the currency markets. BoJ Governor Ueda has hinted that the economy is slowly moving towards the BoJ target, but the central bank wants to see stronger wage growth before it considers inflation to be sustainable. The BoJ has insisted that current inflation is being driven by cost-push factors and is not sustainable. On Monday, Ueda said that he would consider shifting policy if the "cycle between wages and prices intensifies" but added that there was no specific timing to changing the Bank's ultra-loose policy. The US wrapped up last week with the PCE Price Index, the Federal Reserve's preferred inflation indicator. The headline reading fell to 2.6% y/y in November, down from a downwardly revised 2.9% in October and lower than the market consensus of 2.8%. The core rate eased to 3.2%, down from a downwardly revised 3.4% and lower than the market consensus of 3.3%. The numbers are welcome news for the Fed and support the case for rate cuts next year. Fed Chair Powell has pencilled in three cuts in 2024 but the markets have priced in up to six cuts. Investors have priced in a rate cut in January at 14%, up from 8% a week ago, according to the CME's FedWatch tool. USD/JPY is putting pressure on resistance at 142.55. Above, there is resistance at 142.78 There is support at 142.34 and 142.11
by OANDA
HEADLINE/CORE PCE - Inflation dips down into to historical normsU.S. Headline PCE - Lower than Expected ✅ Actual: 2.64% Exp: 2.8% Prev: 3.0% US Core PCE - Lower than Expected ✅ Actual: 3.16% Exp: 3.4% Prev: 3.5% As highlighted on my recent Macro Monday post Core PCE is the Feds favorite metric for measuring inflation (as it excludes volatile price swings from the likes of energy and food and gives a good indication of the underlying inflation trend). PCE is also considered more comprehensive and a more consumer led report than CPI which focuses more on a lessor altered fixed basket of goods (compared month to month). CORE PCE Core PCE has come in this month lower than expected at 3.16% (expected 3.4%). This is great news for the fight against inflation. HEADLINE PCE Separately, Headline PCE has just dipped under the 3% level down to 2.64% which is getting very close to the Federal Reserves long term target of 2%. Historical Core PCE Norms On the chart you can see that since 1990 the typical Core PCE range is between 1 - 3% (red dotted lines on chart). We are slowly getting back down into this more historically moderate level. A sub 3% Core PCE next month would be ideal and demonstrate further easing of inflationary pressures. For the full breakdown of the Core and Headline PCE and to know the differences between PCE and CPI, please review this weeks Macro Monday released earlier this week. PUKA
ECONOMICS:USCPCEPIAC
by PukaCharts
Macro Monday 25~The Feds Inflation Barometer – Core PCE Macro Monday 25 The Feds Favorite Inflation Barometer – Core PCE The US Core Personal Consumption Expenditures (PCE) are released this Friday 22nd December 2023. Currently Core PCE is the most important component to the Federal Reserve in making their interest rate decisions and thus it will provide a great insight into what lies ahead in terms of interest rate policy for Q1 2024. Known as the Federal Reserve’s favorite gauge for inflation, Core PCE is a crucial economic indicator that provides insights into the general trend in consumer spending (it excludes the more volatile energy & food costs). Jerome Powell “I will focus on core PCE inflation, which omits the food and energy components.” 25th Aug 2023 The Bureau of Economic Analysis (BEA) compiles and publishes the Core PCE report which is considered a more comprehensive measure of general trends in consumer spending than some other indicators, such as the Consumer Price Index (CPI). We will briefly cover the differences between CPI and PCE which will eventually lead us to why specifically the Core PCE is the preferred barometer for inflation (over headline and core CPI and over headline PCE). Stick with me here and lets have a look at CPI vs PCE first… CPI Vs PCE - Main differences? Consumer Price Index: CPI is a metric that follows a fixed basket of goods. This fixed basket of items is measured month to month providing a consistent “basket of goods” cost for the common urban consumer. This allows for the basket of items to remain relatively unchanged thus providing an indication of how costs may be increasing or decreasing for the common consumer using the said basket (the basket is updated but not a frequently as the PCE basket). Personal Consumption Expenditures: PCE includes a broader range of goods and services, and it is based on more frequent updates to the basket of goods and services that represent consumer spending, thus PCE captures more of the trend or trend changes in consumer spending. PCE includes expenditures on durable goods (e.g., cars and appliances), nondurable goods (e.g., food and clothing), and services (e.g., healthcare and education). This breakdown provides insights into which sectors of the economy are experiencing changes in consumer spending. We covered Durable Goods in a prior Macro Monday (I will link same under the published version on my TradingView). The bottom line on PCE is that it is more broader and more consumer led report thus arguably providing a more accurate indication of the wider spending habits of the consumer Headline Vs Core (for both CPI and PCE) In general Headline CPI and Headline PCE have an all-encompassing basket of goods and services included whilst Core CPI and Core PCE focus on a subset by excluding the volatile components of food and energy. Analysts and policymakers often consider both Headline and Core to gain a comprehensive understanding of inflation trends, however Core PCE in particular provides the deepest and broadest insights into consumer led spending habits and provides the true underlying inflation by removing volatile commodities (Food & Energy). Lets look at CORE PCE a more closely What is the benefit of excluding food and energy from inflation figures for Core PCE and why is this so beneficial? 1. Reduced Volatility: Energy and food prices are known to be more volatile and subject to temporary fluctuations due to factors such as weather conditions, geopolitical events, and supply chain disruptions. By excluding these components, Core PCE aims to provide a more stable measure of inflation. 2. General Inflation Trend Focus: As noted above, the short-term volatility in energy and food prices can mask the underlying aggregate trend in other goods and services, so the PCE eliminates some of this short term noise from food and energy inflation figures. 3. Captures Persistent Underlying Inflation Forces: Core PCE filters out the impact of temporary shocks to energy and food prices. This can be valuable for assessing whether inflationary pressures are becoming ingrained in the economy in the general sense. 4. Long Term Planning for the Consumer and the Fed: Understanding the underlying inflation trend is crucial to knowing the base level of the cost trend. Core PCE can provide a more reliable gauge for long-term economic planning by smoothing out short-term fluctuations.This provides investors, consumers and the Fed with a sort of long term general expenditure based moving average (the Core PCE) for the underlying inflation burden that is trending in an economy. All three participants can make the necessary adjustments to cater to this long term trajectory and thus the metric is a powerful tool for all involved. Now that we know why the PCE is such a useful metric we can have a look at the long term PCE chart and see how things have been trending. For the record CPI already came out for the month of November as CPI is typically released mid-month whilst PCE is released towards the end of the month. Remember we will have an update this Friday from the BLS on the November readings for Core and Headline PCE, so we can see how we are looking then. The Core and Headline CPI Chart This CPI chart illustrates the following: ▫️ You can clearly see how Core CPI is less volatile than Headline CPI. As discussed above, Core CPI removes the volatile food and energy expenditures to provide a more general view of underlying inflation (based on a fixed basket of goods) ▫️ It is clear that we are not at the Federal Reserves target of 2% which is also outlined on the chart (purple line). It is critical to understand that we are still not at or below the target 2% level regardless of the FOMC’s determination of a likely hold on interest rates and reductions to interest rates in 2024. Lets see can the target be met first. ▫️ You can see that since 2002 Core CPI has fluctuated one standard deviation above and below the 2% inflation level between 1% and 3%. It is clear that we are not back into this standardized zone between 1 – 3%. The Core and Headline PCE Chart (SUBJECT CHART AT TOP PROVIDED TODAY) (will be updated this with newly released figures this Friday 22nd Dec) This CPI chart illustrates many of the same findings from the CPI chart above: ▫️ Core PCE provides the deepest and broadest insights into consumer led spending habits versus a more fixed and stringent basket of goods for CPI, making Core PCE the Feds favorite inflation barometer to watch. ▫️ You can clearly see how Core PCE is less volatile than Headline PCE. As discussed above, Core PCE removes the volatile food and energy expenditures to provide a more general view of underlying inflation (based on a fixed basket of goods). ▫️ It is clear that we are not at the Federal Reserve’s target of 2% which is also outlined on the chart (purple line). The Federal Reserve have advised that Core PCE is expected to decline to 2.2% by 2025 & finally reach its 2% target in 2026. Anything that happens to interfere with this between now and then will need to be addressed by the fed. ▫️ You can see that since 1991 Core PCE has fluctuated one standard deviation above and below the 2% inflation level between 1% and 3%. It is clear that we are not back into this standardized zone between 1 – 3%. Summary You can visualize on the charts why the Core CPI and Core PCE is more important to Chair Powell, both Core metrics on the charts are almost like a slower moving average providing an indication of the longer term inflation trend. Right now Headline metrics are diving down past the Core metrics and the Federal Reserve cannot just take that volatile headline figure to make long term decisions. The Core PCE/CPI provides the long term trend trajectory whilst the Headline can offer early/lead signals of the direction of inflation, however core must be observed to determine the resilience of the long term trend. Furthermore, Core PCE is perceived by the FED as having more value as it has its finger on the pulse of the consumers spending habits by covering a broader range of expenditures whilst also accounting for consumer led spending trends. The CPI basket of goods in more fixed/restricted in terms of the goods it accounts for. This is why the FED values Core PCE so highly as a versatile and all encompassing gauge of inflation. Hopefully you’ve come away today with a greater understanding of why the Core CPI and PCE data is preferred by the Fed ahead of headline inflation and also why the Core PCE comes out ahead as the chosen long term inflation gauge. Any questions or observations, please throw them into the comments and I will be onto them as quickly as possible, Thanks for reading, PUKA
ECONOMICS:USCPCEPIAC
by PukaCharts
GBP/USD shrugs after mixed UK dataThe British pound is drifting on Friday. In the European session, GBP/USD is trading at 1.2701, up 0.08%. UK retail sales jumped 1.3% in November m/m, bouncing back from 0% in October and beating the consensus estimate of 0.4%. This was the sharpest pace of growth since January and the increase was felt in all sub-sectors. Yearly, retail sales edged up 0.1%, after a downwardly revised decline of 2.5% in October and above the market consensus of -1.3%. The GDP report was less cheery, as second-estimate GDP for Q3 came in at -0.1%, compared to 0% in the preliminary estimate. This has raised concerns that the weak UK economy could tip into a recession, as negative growth in the fourth quarter would officially be considered a technical recession. GDP for the second quarter was revised downwards to no growth, compared to the initial estimate of 0.2%. The Bank of England will have to decide what to do with this mixed bag of data. The weak GDP could put pressure on the BoE to cut interest rates, but the sharp rebound in retail sales supports the central bank continuing its 'higher for longer' stance. The BoE has maintained the cash rate at 5.25% for three consecutive times. In the US, Federal Reserve members have been pushing back this week against market expectations for rate cuts next year. The markets have priced in up to six cuts in 2024, but the Fed members have said that the markets are getting ahead of themselves and Atlanta Fed President Raphael Bostic said he expected two rate cuts in the second half of 2024. On Friday, the Fed will get a look at the PCE Price Index, the central bank's preferred inflation indicator. The headline and core readings are expected to remain unchanged in November, at 0.2% and 0%, respectively. GBP/USD is putting pressure on resistance at 1.2720. The next resistance line is 1.2750 1.2636 and 1.2582 are providing support
by OANDA
USD/CHF rises as Swiss retail sales fall, Swiss CPI nextThe Swiss franc has lost ground on Thursday. In the North American session, USD/CHF is trading at 0.8835, up 0.59%. Thursday's Swiss retail sales for July looked awful, falling 2.3% m/m. This follows a revised gain of 1.5% in June. Market attention has now shifted to Swiss inflation, which will be released on Friday. Swiss inflation dropped to 1.6% in July, the lowest level since July 2022. The downtrend is expected to continue in August with a consensus estimate of 1.5%. Policy makers at the Swiss National Bank have to be pleased with the inflation rate. Switzerland boasts the lowest inflation rate in the developed world and both headline and core inflation are comfortably nestled in the central bank's inflation target range of 0%-2%. Still, the SNB remains wary about inflation, with concerns that increases in rents and electricity prices could push inflation back up to 2%. Food inflation remains high and rose from 5.1% to 5.3% in July. Unlike other major central banks, the SNB meets quarterly, which magnifies the significance of each rate decision. At the June meeting, the central bank raised rates to 1.75% from 1.50% and hinted that further hikes were coming. The SNB has projected inflation will hit 2.2% in 2023 and 2024, above its target. That means the SNB expects to have to continue raising rates, although, as is the case with many other central banks, the peak rate appears to be close at hand. In the US, unemployment claims dropped to 228,000 last week, down from a revised 232,000 and below the estimate of 236,000. All eyes will be on Friday's job report, with nonfarm payrolls expected to dip to 170,000, down from 187,000. The Fed's favourite inflation gauge, the PCE Price Index, increased in July by 0.2% for a second straight month, lower than the estimate of 0.3%. On an annualized basis, the PCE Price Index climbed 3.3% in July, up from 3.0% in June. Service prices rose by 0.4% in July, up from 0.3% from the previous month. The numbers indicate that the Fed's battle with inflation is far from over, and the final phase of pushing inflation down to 2% may prove the most difficult. USD/CHF is testing resistance at 0.8827. Above, there is resistance at 0.8895 0.8779 and 0.8711 are providing support
by OANDA
Eightcap: USDCAD Analysis Today's focus: USDCAD Pattern – Support hold, retracement Support – 1.3517 Resistance – 1.3597, 1.3640 • USDCAD price sits at a junction. • USDCAD failed at its latest key resistance test. Hi, and thanks for checking out our latest market update. Today, we have run over the USDCAD on the daily chart and discussed oil and the USD index, as well as upcoming news that could influence the current picture. Price could be seen in a small squeeze at the moment. Will we see short-term support hold and potentially feed a new shot at key resistance? Or do we see support break and price make a new move back towards the main trendline? Data to watch today: US unemployment claims and core PCE price index. Tomorrow, US employment data. Have a great day and good trading.
by Eightcap
GBP/USD steady, BoE's Mann has warning about core inflationThe British pound continues to rally and is up for a fourth straight day. BoE member Mann said on Wednesday that the Bank of England will have a difficult time setting monetary policy due to inflation. The US releases the Core PCE Price Index, a key inflation measure, on Friday. In the European session, GBP/USD is trading at 1.2346, up 0.23%. The pound is poised to record a fourth-straight winning week and has jumped 2.69% in March. The Bank of England has its hands full with high inflation, with no peak in sight. The BoE was not pleased to see inflation accelerate in February to 10.4%, up from 10.1% prior. BoE member Catherine Mann had a sobering message on Wednesday, saying that the drop in energy prices would lower headline inflation, but core inflation was trending higher, which would make it difficult for the BoE to set monetary policy during the year. The BoE's target of 2% is based on headline inflation, but the core rate, which removes the more volatile components in the headline figure, is considered a better gauge of inflation. Governor Bailey weighed in on inflation earlier this week, saying that the "path of inflation would not be entirely smooth" but that he expected inflation to fall sharply in the summer. The banking crisis may prove to be a blessing in disguise for the BoE if it dampens economic activity and lowers inflation, which the BoE has not been able to contain despite raising rates to 4.25%. The banking crisis has eased somewhat, with no further contagion in the banking system since the collapse of several US banks and Credit Suisse. The markets are waiting for the Core PCE Price Index on Friday. This is the Fed's preferred inflation indicator and it could provide clues about the Fed's future rate path. The Fed meets next on May 3rd and the markets have priced in a 61% chance of a pause in hikes, with a 39% chance of a 25-basis point increase. GBP/USD continues to test resistance at 1.2329. The next resistance line is 1.2425 There is support at 1.2248 and 1.2152
by OANDA