US INFLATION: Post-PPI PCE Expectations Center Around Mid-0.20s% M/M
As anticipated given the downside surprises in key PCE-related components of the January PPI report, analysts are downgrading their expectations for the core PCE print due out Feb 28.
- Attention turns to import price data Friday to round out the January core PCE estimates, which following CPI and PPI look centered in the mid-0.20s% M/M. That would mark an uptick from 0.16% prior but would still translate into a slowdown in the Y/Y rate to 2.6% from 2.8%, and of course would be well below the 0.45% M/M core CPI print.
January core PCE %M/M (plus any notable revisions):
- Citi: 0.22% (vs 0.33% pre-PPI 0.31% pre-CPI)
- JPMorgan: 0.24% (vs 0.27% pre-PPI)
- Nomura: 0.29% (vs 0.351% pre-PPI 0.28% pre-CPI) Oct and Dec likely each be revised by 1bp, while Nov likely revised down by 1.7bp.
- Morgan Stanley: 0.30%, with Dec revised about 1bp higher. They are tracking core services ex-housing at 0.25%.
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USDJPY TECHS: Bullish Outlook
- RES 4: 160.00 Round number resistance
- RES 3: 159.45 High Jul 12
- RES 2: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
- RES 1: 158.87 High Jan 10
- PRICE: 157.91 @ 20:30 GMT Jan 14
- SUP 1: 156.78/02 20-day EMA / Low Dec 31
- SUP 2: 154.71 50-day EMA
- SUP 3: 154.44 Low Dec 19
- SUP 4: 153.16 Low Dec 17
The trend condition in USDJPY remains bullish and the pair is holding on to the bulk of its recent gains. Last week’s fresh cycle high, reinforces the bullish theme. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and opens 159.45, the Jul 12 ‘24 high. Moving average studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support is 156.78, the 20-day EMA.
US TSY OPTIONS: Late Mar'25 10Y Put Sale
- -29,500 TYH5 106 puts, 25 vs. 107-11.5/0.28%
AUSSIE 3-YEAR TECHS: (H5) Trend Needle Points South
- RES 3: 97.190 - High May 5 2023
- RES 2: 96.730/932 - High Sep 17 / 76.4% of Mar-Nov ‘23 bear leg
- RES 1: 96.190/360 High Dec 31 / High Dec 11
- PRICE: 95.940 @ 19:50 GMT Jan 14
- SUP 1: 95.830 - 1.000 proj of the Dec 11 - 20 - 31 price swing
- SUP 2: 95.760 - Low 14 Nov ‘24
- SUP 3: 95.480 - Low Jan 11 2023 and a major support
A bear cycle in Aussie 3-yr futures remains intact. The latest move down reinforces the bear theme and the contract has traded through the December low. A deeper sell-off would refocus attention on 95.760, the 14 Nov ‘24 low. On the upside, a reversal higher would instead signal scope for an extension towards 96.360, the Dec 11 high. Further out, the key resistance is at 96.730, the Sep 17 high.
