The Fed on the other hand is not going to be achieving consumer expenditure led growth. This is due to recent data showing personal income (Actual: 0.2%, Forecast: 0.3%, Previous: 0.5%, 29/08/2014) and personal expenditure (Actual: -0.1%, Forecast: 0.2%, Previous: 0.4%, 29/08/2014) declining, whilst durable goods and non-durables goods have remained constant, price-wise (Core PCE price index m/m, Actual: 1.6%, Previous: 1.6%, 29/08/2014). This could hurt the recovery significantly. This is well below the 2% benchmark inflation rate set out by the Fed. Hence we will not be seeing a rate hike until mid-2015. If the Fed increases the interest rate any earlier then the US economy could face huge problems. This week will tell us if there still exists any slack in the labour market as ADP Non-Farm Employment Change (Forecast: 216K, Previous: 218K, 04/09/2014) and Non-Farm Employment Change (Forecast: 222K, Previous: 209K, 05/09/2014) data is to be released later this week.
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Editors’ Picks
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GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.