In January, the US Personal Consumption Expenditures (PCE) core rate rose by 2.6%, matching expectations. Monthly core PCE increased by 0.3%, with unrounded figures showing a rise of 0.285%.

Headline PCE also came in at 2.5% year-on-year, consistent with forecasts. Personal income saw an increase of 0.9%, surpassing the expected 0.3%, while personal spending declined by 0.2%.

Real personal spending fell by 0.5%, with the savings rate rising to 4.6% from 3.8%. Vehicle spending dropped, potentially due to adverse weather, with expectations of recovery as conditions improve.

These numbers provide a precise view of inflation and consumer behaviour at the start of the year. A 2.6% rise in core PCE suggests that price increases remain steady, aligning with what was widely anticipated. The monthly increase of 0.3%, with an unrounded 0.285%, reinforces this stability. No unexpected shifts mean the broader trend is still in place, without indications of accelerating or slowing inflation pressure beyond what was predicted.

Annual headline PCE at 2.5% confirms that general price growth remains in check, providing another piece of data in line with forecasts. While core figures strip out the more volatile food and energy components, headline numbers offer a view of overall cost changes faced by households. With both coming in as expected, there is little in this release to suggest any abrupt adjustments in economic assumptions.

Income growth stood out, rising by 0.9% when only 0.3% was expected. A result like this indicates that people earned more than originally thought, whether through wages, investments, or other means. However, personal spending dropped by 0.2%, meaning that additional earnings weren’t immediately channelled into consumption. Instead, more was set aside, as reflected by the rise in the savings rate from 3.8% to 4.6%.

A steeper drop in real personal spending, down 0.5%, points to inflation-adjusted consumption pulling back even further. Within this, vehicle purchases saw particular weakness, which may have been a result of harsh weather conditions making it difficult for buyers to visit dealerships. If weather was indeed the key reason, demand should return as conditions normalise.

For the weeks ahead, these figures offer a clear reference point. Inflation is not deviating from expectations, spending has softened slightly, and households chose to save more of their income. Each of these trends will be watched closely for confirmation or adjustment as new data emerges.

In January, wholesale inventories in the United States increased by 0.7%, surpassing the forecast of 0.1%. This growth is indicative of inventory management levels in the market.

Meanwhile, the EUR/USD currency pair is stabilising around 1.0400 following the US Personal Consumption Expenditures (PCE) inflation data. Gold has dropped to below $2,840, reflecting bearish pressure amid uncertainties regarding trade policy.

GBP/USD also remains firm above 1.2600 in response to the PCE results. The upcoming week will feature key events, including US payroll data and an ECB rate meeting, alongside a focus on tariff concerns from the Trump administration.

The uptick in wholesale inventories suggests that businesses are either stockpiling in anticipation of stronger demand or struggling with slower sales, leading to a build-up of goods. A rise of 0.7% instead of the expected 0.1% means businesses are holding onto more products than analysts had estimated. If this continues, it might indicate weaker consumer demand, which would impact future production rates. It will be key to monitor whether this trend extends into the next couple of months, as it could shape expectations for broader economic activity.

Over in currency markets, the euro’s relative steadiness suggests that traders have largely priced in the latest US inflation data. For now, the pair is showing little intention of a sharp movement in either direction. If there is a fresh development from the Federal Reserve or the European Central Bank, we might see a clearer trend emerge. Likewise, the drop in gold prices below $2,840 aligns with traders seeking safer positions elsewhere, particularly as trade policy uncertainty weighs on sentiment. Those active in such markets should keep a close eye on how the US approaches tariffs, as any unexpected moves could trigger volatility.

Looking at the pound, its stability above 1.2600 suggests that investors are comfortable with how the latest inflation figures are shaping expectations for both the Federal Reserve and the Bank of England. As we move ahead, the labour report in the US will be one of the determining factors for rate bets. If employment figures come in stronger than predicted, the dollar could regain strength, applying pressure on both the euro and the pound.

At the same time, traders need to account for the European Central Bank’s meeting later in the week. If policymakers indicate a firmer stance on policy adjustments, the euro may break out of its current range. However, if they remain cautious, we are likely to see limited movement. Other forces at play include ongoing trade discussions in Washington. This could introduce fresh shocks depending on how restrictive any proposed measures turn out to be.

For those navigating short-term trades, staying attuned to payroll data and central bank rhetoric will be key. The next few sessions could shape expectations not just for the month ahead but for broader currency and commodity trends.

The upcoming PCE report is anticipated to provide insights regarding the Federal Reserve’s ability to cut interest rates amid persistent inflation. The consensus forecast for core PCE inflation is +0.3%, with some predicting +0.27%, leading to a year-on-year figure of +2.6%. The headline forecast is +0.31% and +2.5% year-on-year.

In Canada, the GDP report is expected to show a quarterly annualised growth of +1.8% for Q4. Attention will be on December’s momentum, which is projected at +0.3%.

Markets are bracing for the PCE report, as the data will shape expectations around monetary policy in the coming months. Inflation trends have remained stubborn, leaving officials with little room for immediate manoeuvre. A reading in line with forecasts will reinforce the view that price pressures are easing gradually, while any deviation—particularly to the upside—will reignite concerns that rates might need to stay elevated for longer.

Monthly figures of around 0.3% suggest inflation is proving resistant, albeit at a slowing pace. If the actual number lands closer to 0.27%, it will be seen as a small reassurance, though unlikely to change the broader outlook. However, should it exceed 0.3%, markets will reconsider their expectations for cuts, likely leading to adjustments across rate-sensitive assets. A year-on-year rate of 2.6% keeps inflation above target, reinforcing the lack of urgency for policy shifts, especially given that recent reports have shown slower progress than hoped.

The headline figure, which factors in more volatile components, will also matter. If it aligns with the 0.31% forecast, it suggests price levels remain sticky, keeping pressure on officials to remain cautious. For traders, this means keeping a close eye on any deviations from the expected numbers, as these will dictate moves in yield-sensitive instruments. Short-term volatility is likely, particularly if the data surprises on either end.

Meanwhile, the Canadian economy’s performance in Q4 will offer clues on how much resilience remains despite past rate hikes. A 1.8% annualised expansion indicates moderate growth, but the monthly figure for December holds weight, as it reflects how momentum carried into the year’s end. If the economy managed 0.3% growth in that final month, it supports the view that conditions held firm despite economic pressures. If softer, the argument for rate adjustments gains some strength.

Those watching the releases should prepare for pronounced movements in interest rate expectations. Even minor variations from forecasts will be closely scrutinised, potentially shifting positioning in rates and currencies. Caution is warranted in the early reactions, as the initial market response tends to be sharp before settling as deeper analysis comes into play.

In the fourth quarter, Canada’s annualised gross domestic product (GDP) increased by 2.6%, surpassing predictions of 1.9%. This indicates a solid performance in the country’s economy during this period.

The US Dollar’s performance has been mixed, with the EUR/USD pair stabilising near 1.0400 following January’s PCE inflation data release.

Gold prices have dipped to levels below $2,840, primarily due to uncertainties linked to ongoing trade policies and market dynamics.

GBP/USD has shown resilience, remaining above 1.2600 amidst fluctuating conditions after the PCE data was published. The upcoming week will see significant economic events, such as US payroll figures and an ECB meeting.

Canada’s economy performed well in the final quarter, growing faster than expected at 2.6% on an annualised basis. Forecasts had suggested 1.9%, making this a positive surprise. A stronger expansion like this often suggests resilient consumer spending and business investment. It also means that expectations for future monetary policy may shift slightly, since central banks tend to respond to economic performance.

Meanwhile, the US dollar has shown mixed movements. The EUR/USD pair has stabilised around 1.0400, which is not far from where it was before January’s PCE inflation data became public. This data point is one of the US Federal Reserve’s preferred inflation measures, meaning markets follow it closely when adjusting positions on currency pairs.

Gold has come under pressure, falling below $2,840. This is linked to uncertainties surrounding trade policies and other market forces. Precious metals often struggle when there is uncertainty about global commerce, particularly if investors anticipate changes in monetary policy that could affect demand for safe-haven assets.

The British pound has remained firm above 1.2600 against the US dollar, despite variable market conditions following the recent release of PCE data. When a currency remains stable or outperforms in uncertain conditions, it typically suggests confidence among traders regarding its short-term outlook.

As the coming week unfolds, key events will require attention. US payroll figures are on the horizon, and they often influence expectations for interest rate decisions. There is also an important meeting by the European Central Bank, which could refine speculation around policy directions in that region. Both developments will affect market behaviour, requiring a close watch to gauge potential shifts in trading conditions.

As the US trading session begins, traders are preparing for the US PCE data release, expected to show a 0.3% increase for both headline and core measures. The EURUSD has moved down, while the GBPUSD has increased; the USDJPY is on an upward trend.

In the equity markets, the Dow has risen by 214 points, the S&P by 15.18 points, while the Nasdaq remains close to unchanged, reflecting recent declines over the past five Fridays due to concerns regarding the upcoming weekend news.

The EURUSD is currently trading near the 1.0400 to 1.04065 range, which is a significant swing level and represents 38.2% of the recent upward movement from February’s low. A move above this level indicates bullish sentiment, while a drop suggests bearish outlook.

The USDJPY has managed to surpass the 200-hour moving average and is eyeing the 150.933 level, which aligns with a 38.2% retracement from February’s peak. A breakthrough at this level may facilitate further upward traction.

In the GBPUSD, the exchange rate is testing the former 38.2% retracement level from the September high, which sits at 1.26087. If the price goes beyond this point, a cluster of moving averages between 1.2631 and 1.26395 could support further gains.

As we approach the release of the US core PCE data, market expectations remain firmly set at a 0.3% month-on-month rise. With this in mind, trading sentiment could shift quickly, particularly in currency pairs where momentum already appears to be developing. The pound, for instance, has maintained an upward push, while the euro is struggling to hold onto key technical levels. Meanwhile, the yen continues to weaken, reinforcing the broad dollar strength seen in recent sessions.

Stock markets reflect a mixed picture. While the Dow has added 214 points and the S&P has edged higher, the Nasdaq remains near flat, weighed down by broader concerns. The repeated Friday declines in recent weeks highlight nervousness as traders position cautiously ahead of weekend events that could shift sentiment when markets reopen. Given this backdrop, positioning in risk assets remains sensitive to both economic data and external developments.

In currency markets, the battle around critical technical levels continues. The euro is holding just above 1.0400, but this area is pivotal. This range coincides with a longer-term Fibonacci retracement and has acted as a key decision point in the past. If sellers gain control and push the price lower, it would reinforce the broader negative trend seen throughout the past week. A recovery above 1.04065, however, could signal that buyers are willing to step in with more conviction.

The yen, on the other hand, has maintained its climb against the dollar, with prices now testing 150.933. This area carries weight, as it represents a key retracement level from February’s peak. A move through here would likely encourage further buying pressure, particularly if momentum traders jump on board, targeting the next round of resistance. Should sellers emerge, though, the next test would be whether buyers keep defending the 200-hour moving average that was reclaimed earlier. Markets are watching closely to see how this plays out.

Sterling is also facing a moment of decision. The exchange rate has lifted towards 1.26087, which previously acted as resistance and aligns with a key retracement level from last autumn’s highs. If buyers push beyond this, the focus shifts to an area packed with moving averages between 1.2631 and 1.26395. A successful move beyond this zone would confirm building momentum. However, if momentum stalls, short-term traders may look to fade the rally and force a rotation lower.

As the data release draws closer, traders should remain aware of how these price points interact with broader market sentiment. Economic releases often act as catalysts, determining whether key technical levels break decisively or hold firm. The shifting dynamic between risk appetite, dollar strength, and economic expectations will be central to near-term positioning.

Canada’s GDP increased from 0.3% to 0.6% in the fourth quarter. This growth indicates a strengthening of economic activity compared to the previous quarter.

In financial markets, the euro is stabilising around 1.0400 after US PCE inflation data. Gold prices have fallen to below $2,840, amidst concerns over trade policies and market flows.

The GBP/USD pair is maintaining its position just above 1.2600 post-PCE data release. Upcoming economic events include US payrolls and an ECB rate meeting, with potential implications for market dynamics.

Canada’s latest GDP report provides a clearer picture of economic momentum, with quarterly growth doubling to 0.6%. This stronger performance suggests businesses and consumers are spending more, helping to counteract some concerns that had previously emerged. Greater economic expansion often influences expectations around interest rates, which in turn impacts trading strategies.

Meanwhile, the euro is holding firm near 1.0400 following the release of US PCE inflation data. This suggests that investors are absorbing the information without making abrupt shifts. Stability here implies there are no immediate shocks, but with key economic indicators due in the coming days, that could change. Traders should be prepared for movement if incoming data alters inflation expectations or central bank policy outlooks.

Gold has slipped below $2,840, reflecting ongoing concerns about trade measures and market liquidity. Shifts in trade strategies and capital flow patterns appear to be influencing sentiment. When gold retreats, it sometimes signals confidence in broader financial assets, but it can also mean investors are recalibrating their hedging positions based on new risks.

Sterling is keeping its footing just over 1.2600 after the PCE release, showing resilience. Whether it can hold that level depends on forthcoming job data from the US and the European Central Bank’s interest rate decision. These events will shape expectations around monetary policy moves, which have direct consequences for those trading in volatility-sensitive assets.

Over the next few weeks, attention will turn to employment figures and central bank decisions. Market positioning may shift quickly if wage growth surprises or policy signals deviate from expectations. When data influences interest rate outlooks, derivative traders adjust accordingly, often at speed. Those watching yields and forex movements should take a close look at whether market expectations are aligned with policymakers’ messaging.

Core PCE data is set to be released today at 8:30 AM US Eastern Time. The expected month-on-month increase ranges from 0.1% to 0.2%, while the year-on-year figure is anticipated to be between 2.7% and 2.9%.

The consensus mid-point for these figures will provide a benchmark for economic assessments. Market reactions may be influenced by how the actual data aligns with these projections.

If the figures meet expectations, financial markets may react with stability, as the data would indicate that inflationary pressures remain within a predictable range. A reading on the lower end of projections could strengthen the argument for monetary policymakers to consider adjustments in favour of looser financial conditions. Conversely, if the figures come in higher, it could reinforce concerns that inflation remains persistent, which might lead to shifts in interest rate expectations.

Given that Jerome and his colleagues have emphasised the importance of incoming data in shaping future decisions, today’s release carries weight. A number at the high end of forecasts or exceeding them altogether might lead traders to reassess the possibility of policy staying restrictive for a longer period. If that happens, short-term interest rate markets could see heightened adjustments, with pricing expectations moving accordingly.

Yesterday, John highlighted that labour market resilience remains a factor in their broader assessment of inflation dynamics. If today’s data indicates inflation is still running warmer than many anticipate, it could align with concerns that wage growth may still be feeding into price pressures. That would make upcoming employment figures even more relevant for shaping near-term expectations.

At the same time, Sarah pointed out that consumer spending trends will play a role in assessing the sustainability of disinflation. Should the core reading register at the lower end of the forecast range, alongside signs of softer demand, it would reinforce the notion that price pressures are easing. Such an outcome might affect positioning in rate-sensitive assets accordingly.

Given these potential outcomes, attention will not only be on the raw percentage changes but also on whether prior months’ numbers are revised. If last month’s figure is adjusted higher, that could alter broader interpretations even if today’s report falls in line with forecasts.

With markets already pricing in expectations around policy shifts, any deviation from estimates may have an immediate effect on short-term rate markets, treasury yields, and broader asset pricing. Those who focus on volatility may see opportunities depending on the extent of any surprise in the release.

As we assess the period ahead, what stands out is that each new data point contributes to the broader picture of inflation momentum. Whether today’s reading strengthens or weakens the prevailing sentiment will depend not just on its absolute value but on how it compares to expectations and the response from policymakers in future remarks.

The EUR/JPY pair reached near 157.00 as the Japanese Yen weakened following the release of Tokyo’s soft CPI data. February’s Tokyo headline CPI dropped to 2.9% from 3.4% in January, with core CPI rising by 2.2%, below expectations.

Despite potential tariff issues posed by US trade policies, the Euro has maintained strength against its peers. In Germany, HICP rose by 2.8%, exceeding the anticipated 2.7%, suggesting further ECB easing may still occur.

The EUR/JPY pair has recovered from a seven-month low, but the outlook remains bearish, with bearish momentum conditions noted. A movement above 157.30 could lead to further gains towards 158.00, while dropping below 154.80 may expose lower support levels.

The Japanese Yen is influenced by the Bank of Japan’s monetary policy and international bond yield differentials. Historically, the BoJ’s loose policies have led to Yen depreciation, but recent policy shifts have bolstered its value amid changing global interest rates. The Yen is also perceived as a safe haven during market uncertainties.

With the Japanese Yen weakening on the back of softer-than-expected Tokyo CPI data, we have seen the EUR/JPY pair push towards the 157.00 mark. February’s headline figure came in lower at 2.9%, down from January’s 3.4%, and while core inflation rose by 2.2%, it still missed estimates. With signs of slowing inflation in Japan’s capital, traders are likely considering the extent to which the Bank of Japan will maintain its cautious approach to policy adjustments.

Despite uncertainties around trade policies, the Euro remains relatively firm. In Germany, the latest HICP measure advanced to 2.8%, edging past the forecast of 2.7%. This keeps the discussion open on the European Central Bank’s next steps. Even though price growth has slowed, inflation remains above target, so policymakers may continue evaluating rate adjustments rather than rushing into cuts.

Right now, the EUR/JPY pair is recovering from its seven-month low, but overall conditions still lean towards a bearish view. If buyers manage to clear 157.30 with conviction, the door opens for a move towards 158.00. On the other hand, losing ground at 154.80 could bring deeper selling pressure, potentially exposing further downside levels.

The fate of the Yen isn’t just tied to the domestic inflation story. Japan’s currency has long been sensitive to the gap between global bond yields and the BoJ’s stance. Historically, ultra-loose policy from Tokyo has led to depreciation, as low yields drive investors towards higher-return assets elsewhere. However, recent tweaks in monetary settings have provided some support, particularly as global interest rates shift. The Yen also tends to attract demand when external risks rise, as it is often seen as a defensive asset in times of uncertainty.

Traders should remain attentive to interest rate expectations on both sides, as well as upcoming economic releases that could shake up sentiment. Keeping an eye on liquidity and price momentum will be important when determining whether near-term moves have strength or are likely to fade.

Germany’s February preliminary Consumer Price Index (CPI) showed an increase of 2.3% year-on-year, matching expectations. Month-on-month, CPI rose by 0.4%, consistent with forecasts, recovering from a prior decline of 0.2%.

The Harmonised Index of Consumer Prices (HICP) reported a year-on-year increase of 2.8%, above the anticipated 2.7%. Month-on-month, HICP grew by 0.6%, surpassing the expected 0.5% after a previous drop.

Core annual inflation for February is estimated at 2.6%, showing a decrease from January’s 2.9% and down from 3.3% at the end of the previous year.

These inflation figures offer a reliable gauge of price pressures within Europe’s largest economy and set the stage for expectations regarding broader eurozone data. The fact that headline inflation met projections while HICP came in slightly above forecast suggests that underlying pricing dynamics remain firm, despite the ongoing disinflationary trend in core measures. With core inflation continuing its steady descent from late last year, markets may interpret this as an indication that underlying cost pressures are gradually easing.

Month-on-month movements help provide context to these broader trends. A return to positive territory in CPI after January’s decline aligns with normal seasonal patterns, but February’s increase carries additional weight considering the broader economic environment. The acceleration in HICP, exceeding forecasts, hints at resilience in certain areas of the economy despite tightening financial conditions. Energy, services, and food prices likely played varying roles, with their relative influence shaping future inflation expectations.

For those monitoring monetary policy signals, this data reinforces a measured approach. The European Central Bank (ECB) will factor in these figures alongside the upcoming eurozone-wide inflation release to assess whether the downtrend in core inflation is persistent enough to justify a shift in stance. Given that core annual inflation has now receded for a second consecutive month, policymakers may find confidence in the notion that underlying pressures are softening, albeit at a measured pace.

Market response to these numbers should be viewed in the context of broader rate expectations. If upcoming data confirms similar patterns across other eurozone economies, it could further solidify sentiment around possible rate adjustments later in the year. However, if upward pressure on headline or harmonised figures persists, sentiment could shift, influencing rate expectations.

Individuals engaged in derivatives will want to assess the extent to which this inflation path aligns with market pricing for central bank decisions. With momentum in core readings showing a downward trend but broader measures maintaining some firmness, short-term reassessments may be in order. The next wave of inflation reports will be pivotal in determining whether this path remains intact.

Pound Sterling (GBP) leads the G10 currencies this week but remains down 0.3% versus the US dollar. PM Starmer’s recent visit to Washington fostered agreements on security and trade, moving away from tariffs toward dialogue.

The GBP/USD spot price fluctuates around the 100-day moving average at 1.2628. Intraday losses may be stabilising near short-term support levels at 1.2555/65, with resistance expected at 1.2610/20 and further at 1.2690/00.

Trade and monetary policy risks could increase pressure on the EUR/GBP, positioning the major support level at 0.82 for potential challenge in the coming weeks.

Sterling’s current outperformance among the G10 currencies suggests investor confidence, yet a decline of 0.3% against the dollar highlights persistent headwinds. Keir’s diplomatic outreach in Washington indicates a shift in strategy, favouring cooperation over trade barriers. This approach could foster a more stable international framework, though market participants will watch for concrete policy progress before adjusting their positions.

The pound’s movements against the dollar reflect a balance between technical markers and broader sentiment. With price action hovering around the 100-day moving average of 1.2628, traders may see the 1.2555/1.2565 range as an area where losses could steady. However, failure to hold above this level might prompt further declines. Conversely, resistance remains at 1.2610/20, with the next test near 1.2690/1.2700. A move beyond these levels would require stronger catalysts, potentially in the form of economic surprises or policy shifts from rate-setters.

Against the euro, the balance of risks could weigh on the single currency. The 0.82 support level is likely to become more relevant, particularly as monetary policy expectations influence price movements. With shifts in economic projections and inflation outlooks, market participants should consider how euro-area dynamics may introduce further volatility.

In the near term, traders should focus on price action around these key levels while monitoring scheduled economic releases and policy developments. The coming weeks could bring moments of heightened market reaction, making risk management a priority.