| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 08:00 | Eurozone | M3 money supply, adjusted y/y | March | 0.4% | 0.5% | 0.9% |
USD firms against most of its major counterparts in the European session on Friday as investors eagerly awaited the releases of the March data on the U.S. core personal consumption expenditures (PCE) price index - the Federal Reserve's preferred measure of inflation - later in the day.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.09% from the previous close to 105.70.
Yesterday’s release of the advance U.S. first-quarter GDP report, which showed weaker economic growth and faster-than-expected inflation pressures, raised stagflation concerns.
As a reminder, the report revealed the U.S. economic growth slowed to 1.6% quarter-on-quarter (QoQ) in the first quarter of 2024 from 3.4% QoQ in the fourth quarter of 2023 compared to economists’ expectations of 2.4% QoQ. Meanwhile, the core PCE inflation measure, imbedded in the report, spiked to 3.7% QoQ, accelerating from a 2.0% QoQ gain in the previous quarter. Economists had predicted the gauge to rise 3.4% QoQ.
Now investors are looking for the publication of the March data on core PCE prices growth on a month-on-month (MoM) and year-on-year (YoY) basis. Economists expect the data will show a further deceleration in the Fed’s preferred inflation measure in YoY terms - to 2.6% in March from 2.8% in February. In MoM terms, the indicator is forecast to show an increase of 0.3%, the same pace as in February.
If the core PCE price index comes hotter than anticipated this could prompt markets to scale back their rate-cut bets and expect just one 25-basis-point decrease from the Fed this year.