It’s a rare PCE report into a holiday-thinned market

It’s Good Friday and that means that equities, bonds and futures are closed. Of course, the FX market isn’t but it’s thinned out in a big way, which means the PCE report at the bottom of the hour will land in a strange place.

It’s an important report and could help to confirm or push-back on the sticky inflation thesis. Fed officials will certainly be taking this one into a account.

Also note this comment from Powell at the most-recent FOMC:

“I want to start by being, saying, I always try to be careful about
dismissing data that we don’t like. So, you need to check yourself on that and I’ll do that, but so I would say the January number, which was very high, the January CPI and PCE numbers were quite high, there’s reason to think that there could be seasonal affects there. But nonetheless, we don’t want to be completely dismissive of it. The February number was high, higher than expectations, but we have it at currently well below 30 basis points core PCE, which is not terribly high. So it’s not like the January number. But I take the two of them together and I think they haven’t really changed the overall story which is that of inflation moving down gradually on a sometimes-bumpy road toward two percent. I don’t think that story has changed.”

The consensus on Core PCE today is +0.3%.

This article was written by Adam Button at www.forexlive.com.