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Markets weigh US PCE and US-Iran deal hopes ahead of Jackson Hole

Core PCE is expected to hold steady at 3.3% year over year, while the market is pricing a 60.0% chance the September FOMC keeps interest rates unchanged.

Reported · Written up by our desk · FX Futures

In the European session, Forexlive said attention is likely to stay on US-Iran developments, as expectations for a deal grew stronger after several positive reports. The outlet noted there are few major catalysts, with only lower-tier releases such as the Swiss economic sentiment index and UK CBI distributive trades, which are expected to have limited impact on central banks and muted market reaction.

In the American session, the key data on the calendar is the US PCE price index, along with the second estimate of US Q2 GDP. Forexlive said PCE data typically is not a large market mover because it is calculated from CPI and PPI data already known in advance.

For the PCE outlook, the outlet cited expectations for Core PCE at 3.3% year over year, unchanged from the prior reading, and 0.2% month over month versus 0.1% prior. Forexlive added that the market is currently pricing a 60.0% chance of no change in interest rates at the September FOMC meeting, with that pricing also influenced by the potential US-Iran deal, the Jackson Hole event, and the next CPI report.

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