
PCE hype now rarely matches market moves
PCE may still matter to policymakers at the Fed, but for traders looking for a genuine volatility event, CPI has been the far more reliable release.
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PCE may still matter to policymakers at the Fed, but for traders looking for a genuine volatility event, CPI has been the far more reliable release.

Although gold has gained close to 1.5% over the last 2 trading sessions, this move does not yet appear to confirm a dominant buying bias. For now, the metal continues to show a more neutral behavior, with demand strength still failing to recover fully after the release of PPI inflation data in the United States.

US PPI came in FAR above expectations at 1.4% m/m, 6.0% y/y, with Core PPI also beating expectations - will the US Dollar play 'catch up' to Fed rate hike expectations?

USD/JPY has reversed a more than 100-pip intraday drop after SCORCHING US PPI to trade back in the middle of its recent 145.80-149.00 range

US index futures dropped after the latest inflation data showed a completely different picture to the CPI print released on Tuesday, though it is far too early to change our S&P 500 forecast to bearish. Today’s PPI data revealed a surprise rise to 3.3% y/y for July which was much higher than 2.5% expected, and that raised concerns that the impact of tariffs on inflation are finally starting to show.

The EUR/USD staged a mild bounce on Tuesday’s morning session after falling relatively sharply along with other FX majors on Monday. The slight recovery was initially likely driven by profit taking on long dollar positions given that the greenback was also weaker against other currencies. We saw a surprising weak PPI report which contributed to the dollar’s small pullback.
Data prints coming out of the US continues to drag on the Greenback as higher tariffs seem to be having a limited impact on inflation
The EUR/USD analysis is currently looking positive, and the bulls would love to see weaker US inflation data this week to inspire a potential breakout above the key 1.08 resistance level.
GBP/USD has formed a bearish reversal pattern beneath a failed breakout level, and gold looks set to retrace lower ahead of US PPI data.
Risk-appetite-sensitive assets, including commodity currencies like the Canadian and Australian dollars, are seeing strong selling pressure amidst slowing US data
Costs associated with producers will make their way to the end of the supply chain over the next few months and eventually be reflected in the CPI.
Whilst GBP/USD has dragged itself from its post-CPI lows, key resistance looms and momentum could favour further downside.
If the data continues to come out weak for the US, it could mean a move dovish Fed than expected.
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