PREVIOUS TRADING DAY EVENTS 26 May 2023

Announcements  

The Personal Consumption Expenditures PCE data were released on Friday at 1530 having an impact on the USD. U.S. consumer spending was higher than the previous one and more than expected in April according to the reported figures. 

This inflationrelated data could prompt the Federal Reserve to raise interest rates again next month. According to previously reported labour data and strong PMI data, the labour market is resilient enough and business activity is high, adding to the probability of one more hike in June.

Companies and consumers are in agreement that there are plenty of green shoots to like at the start of springtime and right now the economy is miles and miles away from the cliffs of recession, said Christopher Rupkey, chief economist at FWDBONDS in New York. Fed officials wont be able to pause their rate hikes, it looks like demand is picking up, not slowing down as it is supposed to do when the Fed hikes rates.

The Feds Rate Hike decision will be affected by whether an agreement is reached to raise the government borrowing cap. Aprils employment data and the NFP report expected next Friday, 2nd of June, will also have an impact.

If the debt ceiling is resolved without too much damage to sentiment, and banking troubles dont resurface, then the broad sweep of data so far could make for an interesting debate at next months meeting, though we still believe the Fed will leave rates unchanged, said…