FX Weekly: Trive’s Week Ahead Insights
This week highlights include US Consumer Confidence, the Australian Monthly CPI, the Tokyo CPI and the US Core PCE index.
US Consumer Confidence (Tue):
The US Consumer Confidence is expected at 103.0 vs. 104.1 prior. The last report showed Consumer Confidence dropping for the second consecutive month although it remained in the range created since 2022.
Dana M. Peterson, Chief Economist at The Conference Board said: “all five components of the Index deteriorated but consumers’ assessments of the present situation experienced the largest decline. Notably, views of current labor market conditions fell for the first time since September, while assessments of business conditions weakened for the second month in a row.”
“Meanwhile, consumers were also less optimistic about future business conditions and, to a lesser extent, income. The return of pessimism about future employment prospects seen in December was confirmed in January.”
Australia Monthly CPI (Wed):
The Australian Monthly CPI Y/Y is expected at 2.5% vs. 2.5% prior. Inflation has been gradually falling towards the RBA’s target with the latest Australian Q4 CPI showing underlying inflation inside the 2-3% target band on a 6-month annualized basis.
As a reminder, the RBA cut interest rates by 25 bps as expected last week but it was accompanied by a more hawkish than expected guidance. We’ve also got the Australian Employment report and once again the data showed a solid labor market.
Tokyo CPI (Fri):
The Tokyo Core CPI Y/Y is expected at 2.3% vs. 2.5% prior. The JPY strengthened recently on more hawkish comments from BoJ officials, and solid wage growth and inflation data. Last Friday, the JPY got another boost on some risk-off moves triggered by the US stocks selloff following the weaker than expected US PMIs and long-term inflation expectations in the UMich survey jumping to a new 30-year high.
US Core PCE (Fri):
The US PCE Y/Y is expected at 2.5% vs. 2.6% prior, while the M/M measure is seen at 0.3% vs. 0.3% prior. The Core PCE Y/Y is expected at 2.6% vs. 2.8% prior, while the M/M figure is seen at 0.3% 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. Therefore, unless we see a deviation from the expected numbers, it shouldn’t affect the current market’s pricing.
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