USD/JPY, EUR/USD flows: Latest core PCE prices as expected but data generally quite 'hot'
US data mixed and includes as-expected latest core PCE
However, general story is still a bit 'hot', US2s up around 4bp and dollar a touch firmer
Out of the latest US data batch, eyes will be initially drawn to the July core PCE print and here the moderate 0.2%m/m is in line with market, as is the yr/yr so no shock there. Headline is 0.1pp above.
Personal spending and especially income slightly above market, latter 0.4% vs mkt 0.2%, so slightly positive.
Durable goods also firm on the headline although that on transport and this time missing on the non def ex air at 0.2%, though that in part offset by the upward revision to the prior month to 1.7% from 1.2% so largely awash. GDP unrevised though you can't help notice skimming the headlines a GDP deflator running at 6.4% (mkt 6.2%). With core PCE prices also revised up in that quarter.
Net result is, even with the as-expected latest core PCE print, still generally quite a ‘hot’ story overall through some of the mixed prints. US2s bouncing 4bp, if within the recent session range, and dollar only marginally supported.