Fed Chair Jerome Powell’s comments on the Jackson Hole Symposium resulted in the worst weekly candle in US500 since June.
US PCE Adds Fuel to the Fire
What will happen?
The United States Bureau of Economic Analysis will release monthly Personal Consumption Expenditures (PCE) on April 29, 15:30 GMT+3. PCE Index is quite similar to Consumer Price Index (CPI). The only difference between them is that CPI excludes foods and energy. Food and energy can take up to 25% of PCE, but they are highly seasonal. Without these volatile components, investors consider PCE a more accurate inflation indicator.
Why is it important?
Traders keep a close watch on it because of the rumors that this is Fed's favorite inflation measure. Nevertheless, CPI is released about ten days earlier and tends to garner the most attention. Last month, a higher-than-planned result caused an above-average bearish movement. This time volatility may be the same (or higher) as the inflation in the US is at 40-years high.
How to trade on US PCE release?
The results will have an impact on all USD pairs.
- If it turns out to be higher than expected, the USD will rise.
- Otherwise, USD will fall.
Check the economic calendar
Instruments to trade: USDJPY, USDCAD, EURUSD.
Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
The United States will publish the Inflation Rate and Core Inflation Rate, also known as US CPI and Core CPI, on August 10 at 15:30 GMT+3.
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.