Market Watch: Expectations Ahead Of Core U.S. PCE Data

Later today at 4:30 PM (GMT+4), markets await the release of consumer spending data in the United States. Forecasts indicate a reading of 0.3% compared to a previous 0.4%. This metric is considered the Fed's preferred indicator for measuring inflation, given that it represents basic consumption prices for goods and services targeting individuals and consumers.


These expectations indicate an incoming decline in the index after rising last month to its highest levels since June 2023. This would provide an opportunity for the Fed to start lowering interest rates if the data presents a significant decline in inflationary pressures. This reading will be of great interest at a time when stock and metal prices continue to rise due to investor optimism around the start of lower interest rates.


Expectations among analysts indicate that the Dollar Index may decline if the actual reading is lower than expected. According to analysts, this could also be positive for stocks and metals. If the real reading comes in higher than expected, this will raise the likelihood that the Federal Reserve will maintain interest rates at its next meeting in May. Analysts explain that this would positively impact the dollar and negatively impact stocks and metals, especially since Fed Chairman Jerome Powell will also speak today, which usually directly impacts price movements.


The release of today's data is likely to be accompanied by fluctuations in the financial markets. Remember that the initial market reaction, regardless of the nature of the actual reading, may be sharp and volatile at the beginning before the market begins to stabilize. Therefore, it should be noted that traders have different ideas and beliefs about how they interpret the information issued, and thus, prices cannot move 100% according to that information.




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