Economic Data: US PCE and China PMI To Drive Volatility?

The economic data for the week is in. This week, markets reacted to January’s US personal consumption expenditure (PCE) data, a key piece of US inflation data. This report is likely to increase volatility and possibly change sentiment, so traders should be prepared for wild price swings to better respond to sudden changes in market conditions.

Recent economic data, including consumer price, producer price and employment reports, showed that the US economy is still healthy despite a long period of increased interest rates. strong.

That prompted investors to shift bets on a Fed rate cut later in the year.

The Economic Data of the Week – Could these drive market volatility?

Tuesday – US Consumer Confidence

The economic calendar also includes data on durable goods orders, the ISM PMI, new and unfinished home sales, and reports from the Conference Board and the University of Michigan on consumer confidence.

Orders of durable goods m/m are expected to decrease by 4.7%, compared to 0.0% and CB Consumer Confidence data is expected to be 114.7 from 114.8 previously. The data could weigh negatively on the dollar.

Wednesday – US GDP

 US will release Prelim GDP q/q which is foreseen at 3.6% compared to previous 3.4%, the data might have a positive impact on the currency.

Further, G20 Meetings will be being which will also to be focus.

Thursday – US Core PCE

German preliminary CPI m/m figures are released. The data is expected to be slightly higher than previous readings of 0.5% and 0.2%. The numbers have a neutral impact on the euro and the precious metal.

The US releases January PCE core data, which is expected to have risen 0.4%, bringing the annual reading slightly up from 0.2%. However, this could be positive for the dollar index.

In addition, US jobless claims will be published on the same day, with the data expected to be 209k compared to 201k last week, which could be neutral for the dollar.

Friday- Eurozone Inflation, US China PMI

China will be released manufacturing PMI data. The number is estimated to be 49.1 from 49.2 previously. and the non-manufacturing PMI, which may increase to 50.8 from 50.7 previously.

Chinese authorities have stepped up efforts to support a fragile economic recovery that has led to the biggest drop-in mortgage rates on record and increased regulatory pressure to revive struggling stock markets.

PMI data on Friday will give some indication of how successful these measures have been.

Economists are expecting official PMI data to show that the manufacturing sector remains in contraction territory, while the Caixin manufacturing index is expected to hold steady.

The Eurozone is to release what will be closely watched inflation data on Friday, the last such reading before the upcoming European Central Bank meeting on March 7.

Consumer price inflation slipped to 2.9% in January from 3.3% in December, showing signs of moving back towards the ECB’s 2% target after soaring to double digits in 2022.

Economists are expecting an annual reading of 2.5% for February.

From the US front, ISM Manufacturing PMI and Revised UoM Consumer Sentiment are due to release Both number might have a positive impact on the dollar, as its foreseen modestly higher.

Commodity Samachar
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