US inflation indicators remain stable

The latest data shows that the US PCE Price Index year-over-year remained steady at 2.5%, matching both expectations and the previous figure. Meanwhile, the US Core PCE Price Index year-over-year came in at 2.6%, slightly below the expected 2.7%, but consistent with the previous reading.

In terms of consumer activity, Real Personal Consumption increased by 0.4% month-over-month, beating the expected 0.3% and improving from the previous 0.2%. Consumer spending also grew by 0.5%, aligning with expectations and up from 0.3% in the prior month. Personal Income rose by 0.3% month-over-month, exceeding the forecasted 0.2% and the prior month’s 0.2% increase.

The July PCE price index, excluding food, energy, and housing, grew by 0.1% on a monthly basis. When excluding just energy and housing, it increased by 0.2% month-over-month. Despite the solid consumer and income trends, the market reaction was muted.

Commodities

Gold prices are nearing last week's record highs but seem to be losing momentum, the expected interest rate cuts have already been factored into the market, but the high price levels appear to have tempered physical demand in China, the largest gold market. Meanwhile, silver is trading steadily around $29.50.

Crude Oil

Brent Crude prices declined by more than 2% today, influenced by reports that OPEC+ is likely to proceed with a gradual increase in oil production, possibly starting in October 2024. The plan includes an additional 180,000 barrels per day, while overall production cuts are expected to last until the end of 2025. The decrease in oil prices also reflects a potential easing of geopolitical tensions.