Weekly Market Focus: US PCE vs Eurozone CPI

Weekly Market Focus: US PCE vs Eurozone CPI

Economic Events:


The economic calendar will start from Tuesday with the Conference Board measure of consumer confidence data. Which is likely to be lower from the previous reading at 105.50 compared to 106.10.

Focus also will remain on some housing numbers, which will include new home sales for August, as well as the September consumer confidence index.

Durable goods orders are out on Wednesday. The data is foreseen -0.5% compared to previous -5.5%.

On Thursday, Fed Chair Powell Speaks will bring clutter for the market. On the same day, Other important data releases will be US jobless claims with forecasts of minor increase. Final estimates of Q2 GDP numbers are lined up with forecasts of minor gains at 2.3% from 2.1%.

US Core Personal Consumption Expenditure (US PCE) Price Index, the Fed’s preferred measure of consumer inflation will be released on Friday. In the core US PCE inflation is expected to remain unchanged at 0.2% m/m as in August while headline inflation is expected to increase to 0.4% m/m from 0.2% m/m.

On the same day, the market will react strongly to August personal income and spending report, set to release on Friday. After a strong July, the data is expected to decrease, especially in real terms, with higher gasoline prices responsible for much of the increase in nominal spending on goods, based on what we saw in the retail sales report. The reading expects to come at 0.4% compared to 0.8%. personal income expected to be higher by 0.5% compared to previous 0.2%.


From the Eurozone, the main data will be the inflation numbers. As higher energy prices may pose a problem for the European Central Bank and could determine whether rates stay on hold for the foreseeable future or rise further. Unlike the Fed, the ECB has to factor in a much weaker economy into its decision making, hence, the bar for a further hike is higher.

For the moment at least, Eurozone inflation is set to release on Friday. Expect a drop both in headline and core on the back of base effects, but the higher oil price will have a limiting effect on energy inflation.

 Data expected to further decline by 4.5% compared to previous 5.3% in price pressures as expected, the outlook might brighten a little amid ongoing recession risks.  

Adding to this, ECB President Lagarde Speaks on Monday and ECB President Lagarde Speaks on Friday will have a volatile impact.


Market may react strongly to the Canadian Gross Domestic Product (GDP) for July due on Friday. Numbers expected to remain negative at 0.1% compared to previous contraction of 0.2%.


On Saturday, China released a purchasing managers index which will give an update on the strength of the manufacturing sector as the post-COVID economic recovery in the world’s second-largest economy falters.

The data is expected to increase by 50.2 from the 49.7 previous reading. Non-Manufacturing PMI with forecast of 51.5 from previous 51.00, which likely gives support for base metals prices.

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