SPXE - Will The PCE Deflator Really Contain New Information?

2024-06-28 07:15:00 ET

Summary

• The US dollar is narrowly mixed as North American participants prepare to return for the last session of the first half.
• The large bourses, but India, rose in the Asia Pacific region.
• Benchmark 10-year yields are 1-4 bps higher in Europe, and the 10-year US Treasury yield is up a couple of basis points to 4.30%.

Overview

The US dollar ([[DXY]], [[USDOLLAR]]) is narrowly mixed as North American participants prepare to return for the last session of the first half. Despite firmer-than-expected Tokyo CPI and stronger-than-expected industrial output, the market lifted the greenback around JPY161.25 before profit-taking pressures brought it back toward session lows near JPY160.65 in Europe. President Biden is thought to have lost last night's debate with Trump, but it does not appear to be much of a market factor. The immediate focus is on today's PCE deflator, which we suggest below may not have a lasting impact as the signal has already been given from the CPI and PPI, and there will be another batch of inflation readings before the Fed meets again. The outcome of Sunday's French election remains a source of investor anxiety, and the French 10-year premium over Germany has widened further today to the most since 2012. Most emerging market currencies enjoy a firmer tone against the dollar today, including the Chinese yuan. The PBOC fixed the dollar lower today for the first time in eight sessions....

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