Fed’s Dovish Surprise: Will PCE Amplify Further Next Week?

Tuesday, 26 March 2024, 14:30 – U.S Durable Goods Orders (MoM) (Feb)

In January, the U.S durable goods orders have fell 6.1% vs -4.5% expected, marking the largest decrease in nearly four years, while business investment in equipment appeared to have eased, indicating a decrease in economic momentum at the beginning of the year. Nevertheless, there are indications of recovery in the industrial sector of the economy recently, and the potential for lower interest rates later in the year could contribute to an increase in demand as the Fed recently hinted at further rate cuts. Consequently, orders may rebound and show improvement.

Thursday, 28 March 2024, 08:00 – UK GDP (QoQ)

The UK’s Gross Domestic Product (GDP) experienced a contraction of -0.3% in Q4, worse than the expected decline of -0.1%. This downturn was attributed to declines across all primary sectors and caused the UK to enter a technical recession. However, recent developments suggest that the UK is on track to emerge from a minor recession within months with official figures indicating that there was a modest growth of 0.2% in January. The upcoming data is expected to have a better result next week.

Thursday,28 March 2024, 14:30 – US GDP (QoQ) (Q4)

The GDP growth in the largest economy globally was adjusted to an annual rate of 3.2 percent in the last quarter of 2023 during preliminary release, down slightly from the initial estimate of 3.3 percent released the previous month due mainly to a downward revision to business investment. Despite predictions of weakening consumer spending due to reduced pandemic savings and high borrowing costs, consumption has remained surprisingly resilient. The market anticipates that growth will slow but remain positive in the upcoming quarters.

Friday,29 March 2024, 14:30 – US Core PCE Price Index (MoM) (Feb)

The Federal Reserve’s favored measure, the personal consumption expenditures price index excluding food and energy, rose by 0.4% in January, in line with economists’ predictions. Despite a rise in prices, particularly in services such as housing and finance, the annual inflation rate was the lowest in three years. With the Fed suggesting additional rate cuts, investors are now closely monitoring this upcoming data that could influence the Fed’s decision-making.