The dollar value showed little change against most major currencies on Wednesday with the dollar index (USDX) ending the session around 0.12% on Wednesday, however those gains were reversed early on Thursday, ahead of key inflation data that could determine the course of interest rates in the coming FOMC meetings. The core PCE price index is forecast to rise by 0.4% for the month, and 2.8% on the year.
According to the CME Fedwatch tool, the possibility that the first rate cut in 2024 will take place in the May FOMC meeting rose from 20.7% to 22.2% while the same possibility for a rate hike taking place in June is at 49.4%.
Wall Street’s continues to lose momentum on Wednesday, with all three main stock indices moving further away from recently reached all-time ahead of the upcoming PCE price index data. In company news, Beyond Meat Inc rose by almost 30% after reporting better-than-expected quarterly revenue, and also forecasting improved margins in the second half of the year amid a turnaround plan. According to Beyond Meat CEO the plan includes taking steps to steeply reduce operating expense and cash use. Several big market players announce their Q4 earnings reports today among which are GoodRx, ACI, Best Buy, Autodesk, Zscaler and Dell Technologies.
On the energy front, the two main crude benchmarks WTI and Brent both extended their declines from the previous session as a larger-than-expected increase in U.S. crude inventories raised concerns over slowing global demand. Another factor possibly adding pressure on prices is the prospect of a possible Israel Hamas truce.
For today, investors focus would most likely shift towards the core PCE price index data to give further clues on when the Federal Reserve is likely to begin cutting rates. Those expectations have been pushed to June, from May, on strong economic growth, stable inflation and discouraging commentary from Fed officials. Some price action could also be observed upon the release of quarterly GDP numbers from Canada as well as US data on jobless claims, personal income, personal spending, pending home sales, the Chicago PMI and a speech by FOMC Member Mester.