Market movers today
Today US PCE core inflation is due for release and we expect the PCE core to
increase to 1.5% y/y in May from 1.4% y/y in April. The figure is of particular
interest as it is the FOMC’s preferred inflation measure and therefore crucial to
indicate when we might expect a hike in the feds fund rate. PCE inflation has been
low 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 robust
labour market. Last week the four-week average declined to 312K, which is close to
the cycle lows.
In the UK, the Bank of England’s Carney will speak on the Financial Stability
Report. UK housing has attracted a lot of attention recently and today focus will be
on whether the Financial Policy Committee deems whether the risks stemming from
the housing market pose a threat to the financial stability.
EU leaders start their two-day Summit in Brussels. The discussion includes who
will be the next president of the European Commission. Fiscal austerity measures are
also on the agenda. The situation in Ukraine will get attention, see Bloomberg.
