The global financial markets have been relatively stable during the European trading session. The US dollar is holding steady after a brief strengthening attributed to better-than-expected economic data. Investors are now turning their attention to the upcoming PCE inflation data from the US set to be released tonight.
The PCE index is in the spotlight as it serves as the Federal Reserve’s (The Fed) preferred inflation measure, which can significantly influence future monetary policy directions.
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Here are the details from Trading Central:
- US PCE inflation data YoY at 19:30 WIB: forecasted at 2.8% compared to the previous 2.6%
GOLD
Gold prices are seeing a slight increase during the European session at $3,755, although it faced some resistance from the strong dollar earlier. The market is awaiting the PCE inflation results to determine the next direction. Should the actual figures exceed predictions, the likelihood of The Fed delaying interest rate cuts increases, which could exert downward pressure on Gold.
OIL
Oil prices have declined to $64.80 per barrel due to profit-taking trades. However, concerns about supply disruptions, particularly relating to Russian oil amid the Ukraine-Russia conflict, could limit the extent of price declines. Over the medium term, Oil remains bullish if supply risks continue to rise.
EURUSD
Following a sharp drop, EURUSD rebounded to 1.1688 in the European session. However, this increase is expected to be limited as the US dollar could regain strength if tonight’s PCE inflation data comes in higher than expected. Persistently high inflation might prompt The Fed to adopt a more cautious approach towards interest rate cuts, thus leaving EURUSD vulnerable to further declines.
GBPUSD
GBPUSD has shown a slight gain this afternoon, although it has not managed to recover from previous session losses. Investor focus is now shifted towards tonight’s PCE inflation data. If the results exceed forecasts, selling pressure on GBPUSD may rise again.
USDJPY
The sale of yen during the European session has pushed USDJPY up to 149.955. The US dollar could benefit positively from the PCE inflation data set to be released tonight. Should the figures indicate higher results, USDJPY might continue its upward trend alongside a strengthening dollar.
NASDAQ
NASDAQ remains under pressure in the European trading session, mainly due to weakness in tech stocks. This pressure could persist if US inflation remains elevated, as The Fed may keep interest rates unchanged for a longer period. Such conditions could have a negative impact on NASDAQ.
