Today US PCE core inflation is due for release and we expect the PCE core toincrease to 1.5% y/y in May from 1.4% y/y in April. The figure is of particularinterest as it is the FOMC’s preferred inflation measure and therefore crucial toindicate when we might expect a hike in the feds fund rate. PCE inflation has beenlow for quite a while but has shown slight improvements in the past couple of months.
US initial jobless claims are expected to continue lower, thus confirming a robustlabour market. Last week the four-week average declined to 312K, which is close tothe cycle lows.
In the UK, the Bank of England’s Carney will speak on the Financial StabilityReport. UK housing has attracted a lot of attention recently and today focus will beon whether the Financial Policy Committee deems whether the risks stemming fromthe housing market pose a threat to the financial stability.
EU leaders start their two-day Summit in Brussels. The discussion includes whowill be the next president of the European Commission. Fiscal austerity measures arealso on the agenda. The situation in Ukraine will get attention, see Bloomberg.
In the Scandi markets, Norwegian LFS unemployment figures for April are duefor release, see more on page two.
Read the full report: FX Daily