As the North American session begins, the EUR is the strongest and the NZD is the weakest. Today key US core PCE data will be released at 8:30 AM ET. The data is a favorite measure of inflation for the Fed. The expectations are for a gain of 0.3% for the year on year to rise by 4.7%. That inflation report is a prelude for the Fed chair Powell's speech at Jackson Hole which commences at 10 AM ET.
How far will he go outside the expected boundaries of higher rates, data dependent, 50 or 75 basis points (the market is pricing in 60% chance of 75 basis points), fight inflation to the end?
Will he bang the table with his shoe? Will he bring up QT?
The EUR is the strongest despite dire prospects for energy prices in the winter. The expectation is for annual cap on typical fuel bill to be $4188 a year with higher levels to come in January with the next review. As a result, the inflation expectations in the EU which the BOE sees at 13%, is expected to be much higher (Citi sees as high as 18%).
In other markets as NA traders enter shows:
- Spot gold is trading down $13.59 or -0.78% at $1744.35.
- Spot silver down six cents or -0.33% at $19.16
- Crude oil up $1.02 at $93.54
- Bitcoin is trading down -2.06% at $21207
in the premarket for US stocks, the major indices are trading lower ahead of the Fed Powell's speech NPCA data
- Dow industrial average is trading down -40 points points after yesterday's 322.55 point rise
- S&P index down -9.8 points after yesterday's 58.35 point rise
- NASDAQ index down -45 points after yesterday's 207.74 point rise
In the European equity markets, the major indices are mixed:
- German DAX -5.16 points or -0.03%
- France's CAC -14.14 points or -0.22%
- UK's FTSE 100 +5.21 points or +0.07%
- Spain's Ibex -11.52 points were -0.14%
- Italy's FTSE MIB -155.2 or -0.69%
In the US debt market, yields are moving back to the upside:
- two year 3.382%, +1.2 basis points
- five year 3.191%, -3.4 basis points
- 10 year 3.067%, +3.7 basis points
- 30 year 3.279%, +3 point basis points
In the European debt market, the benchmark 10 year yields are also trading higher:
