Summary:

• US core pce price index Y/Y 1.5% vs 1.5% exp
• Core durable goods orders Y/Y: 1.3% vs 2.0% exp
• USD rising after the data

With the final trading week before Christmas drawing to a close there has been some interesting data for the US with the latest inflation and consumer spending figures released. First let’s look at the inflation data which saw the PCE core price index come in inline with estimates at 1.5% Y/Y which represents an increase of 0.1% on the prior reading and extends the recent run higher. 

 The US PCE core index rose slightly as expected to 1.5% Y/Y. Source: Bloomberg

The PCE core index is closely viewed by some traders as the Fed have often referred to it when talking about inflation. The CPI number is more widely followed and as you can see below the two are fairly well correlated. Also not that both have been moving higher on the whole for the past few years. 

 The rise in PCE today supports the recent rises seen in the more widely followed CPI. Source: XTB Macrobond

As well as the inflation data there was also the release of the latest durable goods orders numbers. There was some disappointment here with the Y/Y figure coming in at 1.3% against consensus forecasts for 2.0%. The core reading is even worse with a -0.1% print well below the 0.5% expected. 

 Durable goods orders was a little bit disappointing. Source: XTB Macrobond

The EURUSD has fallen lower since the release with the market running into resistance in recent sessions around 1.1885. Possible support may be found in the region near 1.1715 should the market fall lower but a break above 1.1885 could see a run higher towards 1.20.

 The EURUSD could be reversing around prior resistance near 1.1885. Source: xStation