In a week filled with noteworthy economic data releases and market shifts, the United States saw several significant developments. The Personal Consumption Expenditures (PCE) Price Index is anticipated to rise by 0.3% on a monthly basis and 2.5% from the previous year. Meanwhile, Initial Jobless Claims increased to 242,000 for the week ending February 22, surpassing the forecast of 221,000. In other news, the US confirmed its annualized Q4 Gross Domestic Product (GDP) at 2.3% in its second estimate. This summary offers a detailed look into these economic indicators and their implications.
The PCE Price Index is set to be published on Friday, with expectations pointing to a 0.3% monthly increase and a 2.5% rise from the same time last year. This index is closely watched as an inflation gauge by the Federal Reserve. Concurrently, the Core PCE prices have climbed to 2.7%, up from the previous 2.5%, highlighting continuous inflationary pressures. The Quarterly Personal Consumption Expenditures Prices also saw an uptick, reaching 2.4% from an earlier estimate of 2.3%.
In employment news, Initial Jobless Claims have risen to 242,000, exceeding the anticipated 221,000 for the week ending February 22. This unexpected increase may raise concerns about the resilience of the labor market amid ongoing economic fluctuations. Additionally, pending home sales experienced a significant drop of 4.6% in January, a steeper decline than the predicted -1.3%, suggesting potential challenges in the housing market.
The US economy's growth rate in the fourth quarter has been confirmed at an annualized pace of 2.3%. This figure reflects moderate economic expansion as businesses and consumers navigate through various headwinds. On a related note, Durable Goods Orders surged by 3.1% in January, outperforming expectations set at 2%. This positive development indicates robust demand for long-lasting manufactured goods.
In financial markets, spot gold experienced a downturn on Thursday, trading near a fresh weekly low of $2,867.76. The daily chart for the XAU/USD pair suggests increased bearish momentum as it breaks below the bullish 20 Simple Moving Average (SMA). Despite this bearish sentiment, the pair remains well above the bullish 100 and 200 SMAs. Technical indicators continue to project a bearish outlook.
The foreign exchange market also witnessed a tariff-driven upswing in the US Dollar, which pressured the EUR/USD further into daily losses. This movement aligns with US President Donald Trump’s rectified tariffs set to take effect on March 4, potentially influencing currency dynamics and international trade relations.
Meanwhile, Bitcoin (BTC) made a slight recovery, trading around $86,000 on Thursday. This rebound comes amid fluctuations in cryptocurrency markets as investors weigh regulatory developments and technological advancements.
In Europe, inflation appears to have eased in February, with France experiencing a notable reduction in regulated electricity prices. This decrease may contribute to a broader trend of moderating inflation across the Eurozone, impacting monetary policy considerations for European central banks.