The PCE inflation print will affect the Fed’s thinking on the timing of rate cuts
US stocks were little changed on Thursday as investors were indecisive ahead of a key inflation report. The S&P 500 added just 0.1%, climbing back toward an all-time high. The Dow Jones Industrial Average gained about 0.1% as well, while the tech-heavy Nasdaq Composite led the gains, advancing 0.3%. On the data front, initial weekly jobless claims came in at 233,000, a decrease of 6,000 from the previous week. Real GDP, meanwhile, increased at an annual rate of 1.4% in the first quarter to come in slightly higher than the prior estimate of 1.3%. Now, investors await the PCE inflation print that will affect the Fed’s thinking on the timing of rate cuts.
Asian stocks rose on Friday, finishing the month with solid gains, with Chinese shares lagging their regional peers in June amid persisting doubts over an economic recovery. Japan’s Nikkei 225 rose 0.64% after a mixed consumer price index inflation reading from Tokyo, where headline CPI increased, while underlying inflation remained close to 1.5-year lows. The Nikkei added 3.2% in June. China’s Shanghai Composite index rose 0.73% on Friday, but lost around 3% in June. Hong Kong’s Hang Seng index finished unchanged and was trading up over 1% for the month.
In Europe, stocks were slightly higher on Friday as market participants await key inflation data from the US. The pan-European Stoxx 600 was up 0.17% in early trade, with majority of sectors in the green. London’s FTSE 100 was in positive territory, adding 0.33% in early deals following a UK GDP print which showed the economy had grown at a faster rate than previously estimated in the first quarter. The economy expanded 0.7% versus the previous estimate for growth of 0.6%, while most economists had expected no revision.
Meanwhile, the US dollar is back in the green after yesterday’s slide. The USD index keeps treading water around the 106.00 figure, thus staying in the area of early-May highs. Should the upcoming PCE report surprise on the upside, the greenback will rally across the board. Otherwise, the index would retreat from the upper end of the trading range. At the current levels, the dollar looks set to finish the fourth bullish week in a row. On the upside, the immediate target arrives at the 106.13 figure that has been capping gains this week.
