No surprises in the Core PCE Price Index. Month over month, we have a slip of 0.1% as expected. Year over year, it stands at 1.6%, also as predicted. However, this is a drop from 1.8% seen beforehand. 

The other data points are disappointing: personal income is up 0.2% instead of 0.3% expected. In addition, the previous number was revised to the downside. Consumption is flat against projections for +0.2%. And also here, we have a downside revision.

All in all, the data is not so good. The US dollar is sliding. EUR/USD is extending its gains and reaches 1.0914.

Here is how it looks on the EUR/USD chart:

Low expectations and apparently a lower outcome

The US core PCE Price Index was expected to drop by 0.1% in March after a rise of 0.2% in February. This indicator is the favorite measure of inflation by the Federal Reserve. Personal income was predicted to rise by 0.3% after 0.4% beforehand. Consumption carried expectations of +0.2% against 0.1% seen beforehand.

The US dollar was cooling off from previous gains. The greenback enjoyed the news about a deal in Washington – a move to avert a government shutdown. Trading volume is relatively thin due to May Day celebrations in most of the world.

Busy week with the Fed and the NFP

This is a very busy week for markets. We will later get the ISM Manufacturing PMI, the first hint towards Friday’s Non-Farm Payrolls. On Wednesday, the ADP NFP and the ISM Non-Manufacturing PMI will provide further hints, but the big event of the day is the Fed decision. And on Friday, it’s jobs day.

Markets will also be eyeing the second round of the French elections. The most recent Opinionway poll is a relief for markets: Macron is extending his gain.