Ipek Ozkardeskaya
Swissquote Bank Ltd
The S&P500 printed its 42nd record high this year yesterday on the back of a mix bag of economic and corporate news.
Due today, the Fed’s favourite gauge of inflation, the core PCE index, will determine whether the soft landing dreamers will carry the US stock rally to fresh record levels.
Elsewhere, the mix of Chinese monetary and fiscal stimulus measures continue to boost Chinese and China-related stocks. LVMH jumped 10% yesterday.
Crude oil remains under pressure on reports that Saudi Arabia will drop its price target and focus on expanding its market share. And finally, in Europe, the soft CPI reads from France and Spain will likely set a ceiling on EURUSD near 1.12, of course, if the data from the US doesn’t come with a big surprise.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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EUR/USD is recovering losses to trade near 1.1150 in European trading on Friday. The pair trims softer French and Spanish inflation data-led losses amid a cautiously optimistic market mood and a wobbly US Dollar, as US PCE inflation report looms.
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GBP/USD is off the lows but stays pressured below 1.3400 in the European session on Friday. A modest US Dollar uptick and a mixed market sentiment remain a drag on the pair. The focus now shifts to the high-impact US PCE inflation data for fresh impetus.
Gold price pulls back from record high ahead of US PCE Price Index, bullish bias remains
Gold price attracts some sellers on the last day of the week and retreats further from the all-time peak, around the $2,685-2,686 region touched on Thursday. The downtick is sponsored by the emergence of some US Dollar buying, which tends to undermine demand for the commodity.
US core PCE set to show continued disinflation trend, reinforcing Federal Reserve easing cycle
The core Personal Consumption Expenditures Price Index is seen rising 0.2% MoM and 2.7% YoY in August. Markets have already priced in near 50 bps of easing in the next two Federal Reserve meetings. A firm PCE result is unlikely to move the Fed’s stance on policy.
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