The reports released today showed no revision in Q4 GDP, unchanged at 0.6% while core PCE prices also held steady for the quarter at 2.7%. However, weekly jobless claims jumped higher to 373k, versus 349k from a week earlier – highlighting continued weakness in the US labor market and shifting focus to next week’s jobs data. Consensus estimates call for the February unemployment rate to creep back up to 5.0% while non-farm payrolls are forecasted to reverse last month’s 17k contraction, instead improving by 35k.
Economic data slated for release tomorrow will see January PCE, personal consumption, personal income, February Chicago PMI and the February University of Michigan sentiment survey. The Fed’s preferred gauge on inflation, the personal consumption expenditures (PCE) price index is likely to remain buoyed in January, highlighting the predicament facing the FOMC in maneuvering monetary policy. Meanwhile, Chicago PMI in February is expected to fall below the key 50-level, dropping to 49.7 from 51.5 in January. The University of Michigan sentiment survey is forecasted to fall to 70.0 in February versus 78.4 a month earlier. However, the risk for a sharper decline remains given the unexpected plunge to 5-year lows in the Conference Board’s consumer confidence survey earlier in the week.
The US data being released continue to bode poorly for the economic outlook, and consequently, for the dollar – which remains mired in a downward spiral across the board. The greenback’s losses against the euro accelerated after breaching the 1.50-level yesterday plunging further to near 1.52 and slumping to a new 24-year versus the Australian dollar around 0.95. Burgeoning fears of an imminent recession and the increased scope for additional aggressive monetary policy easing from the FOMC have given traders the greenlight to dump dollars – plunging to new all-time lows against the euro and Swiss franc.
No comments:
Post a Comment