Growth Remains On Pace With Little Sign of Overheating

Wells Fargo Research Team Wells Fargo

U.S. Review

Growth Remains On Pace With Little Sign of Overheating

The inflation data took center stage this week. The CPI and PPI both came in slightly below expectations and inflation expectations remain well anchored. Import prices also fell more than expected during the month.
The NFIB Small Business Optimism Index rose to an all-time high in August, climbing 0.9 points to 108.8.
Retail sales rose less than expected in August, rising just 0.1% overall. The prior month’s data were revised higher, however, and consumer spending remains solidly on pace with our forecast for the third quarter.

Global Review

ECB Leaves Rates Unchanged, EM Remains in Focus

Several central bank announcements were slated for release this week, including the European Central Bank (ECB), which left policy unchanged. We look for the ECB to maintain a slowand-steady approach to removing policy accommodation, as inflationary pressures remain muted.
Economic data released in China this week showed steady retail and firmer industrial activity growth, as that country’s central bank pauses along its deleveraging path.
Turkey’s central bank notably raised interest rates 625 bps to 24%, higher than consensus estimates, in an attempt to curb rampant inflation and rapid depreciation of the Turkish lira.

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Wells Fargo Research Team

Wells Fargo

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.