What are the main events for today?

Today we get lots of economic data although the focus will be mainly on the US PCE report. In the European session we get the preliminary inflation data for France, Spain and Italy and while it could have a slight impact on the EUR, it shouldn’t change the market’s pricing.

Moving on to the American session, we get the Canadian GDP, the US PCE and the Final reading on the University of Michigan Consumer Sentiment survey.

14:30 GMT/08:30 ET – US May PCE

The US Headline PCE Y/Y is
expected at 2.6% vs. 2.7% prior, while the M/M measure is seen at 0.0% vs. 0.3%
prior. The Core PCE Y/Y is expected at 2.6% vs. 2.8% prior, while the M/M
reading is seen at 0.1% 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 the central bank remains in a “wait and
see” mode until September at very least.

In my opinion, a lot will depend on the next inflation data. I think the Fed will be
more dovish if we get a good inflation report in July. Then, if we get
some more good figures in August, Fed Chair Powell will likely
pre-commit to a rate cut in September at the Jackson Hole Symposium.

Central bank speakers:

• 10:00 GMT/06:00 ET – Fed’s Barkin (neutral – voter)
• 16:00 GMT/12:00 ET – Fed’s Bowman (hawk – voter)

This article was written by Giuseppe Dellamotta at www.forexlive.com.