Today is the busiest day of the week in terms of data releases but unfortunately they are unlikely to change much in the bigger picture. In the European session we get the Eurozone Flash CPI and the Unemployment Rate, while in the American session we have the Canadian GDP and the US PCE report. There will also be the Chicago PMI and the Final UMich Consumer Sentiment report but they are rarely market moving.
09:00 GMT - Eurozone August Flash CPI
The Eurozone CPI Y/Y is expected at 2.2% vs. 2.6% prior, while the Core CPI Y/Y is seen at 2.8% vs. 2.9% prior. This report won’t change anything for the ECB and the market reaction might be subdued unless we get a big deviation from the expected figures.
12:30 GMT/08:30 ET - US August PCE
The US PCE Y/Y is expected at 2.6% vs. 2.5% prior, while the M/M figure is seen at 0.2% vs. 0.1% prior. The Core PCE Y/Y is expected at 2.7% vs. 2.6% prior, while the M/M reading is seen at 0.2% vs. 0.2% prior. Forecasters can reliably estimate the PCE once the CPI and PPI are out, so the market already knows what to expect.
This report won’t change anything for the Fed as they will cut rates in September no matter what. The Fed is now focused on the labour market and the next NFP report is going to decide whether the FOMC will cut by 25 or 50 bps at the upcoming decision on the 18th of September.
