Investors await PCE amid lower liquidity

As the trading week approaches its close ahead of Easter, investors are closely monitoring developments in the United States and eagerly awaiting a crucial message from Fed Chair Powell. Meanwhile, European markets remain relatively subdued, even as Good Friday prompts closures across most markets. However, the FX and cryptocurrency sectors maintain activity, offering a semblance of continuity amidst the holiday pause, albeit with lower liquidity.

European Landscape

Preliminary CPI figures from France have fallen short of expectations, contributing to the subdued performance of the EURUSD pair. With lower liquidity on Good Friday and expectations of interest rate cuts in the first half of the year, the pair tested the 1.0770 support level.

US Focus

Powell's Speech and PCE Inflation Data: In the US, Powell's speech following the release of the Fed's crucial PCE inflation data and a slew of US income and consumption figures holds paramount importance. Despite the holiday observance, market participants eagerly anticipate insights into the inflation trajectory from the February PCE inflation report. Projections hint at a likely uptick in headline PCE, driven by rising wages, consumer spending, and fuel costs, while core PCE is expected to either decelerate or hold steady.

Precious Metals: Gold's Ascent

Gold continues its upward trajectory, edging closer to all-time highs around $2,230 per troy ounce. Market sentiment, favoring potential rate cuts by major central banks in 2024, bolsters gold's ascent. With investors eyeing three anticipated rate reductions from the US Federal Reserve in the coming months, attention shifts to the impending US PCE report for clarity on the Fed's interest rate trajectory.