On Thursday, further US economic data is eyed with the release of US Retail Sales and the Producer Price Index (PPI). The Producer Price Index (PPI) is foreseen to deliver mixed readings, with core at 1.9% YoY, down from 2%, and headline at 1.1% YoY, up from 0.9%. The next Fed meeting is scheduled for March 19-20 next week.
The US labor market is cooling down despite printing solid gains in February compared to “downward revised” figures from January. After two months of net revisions, US jobs market totals were reduced by 167,000 jobs compared with initial prints, which sparked a reaction from interest rate futures traders.
According to the CME FedWatch Tool, expectations for a May rate cut remain low, having dropped to 11% from 22%. However, the odds for June stand at 64%, down from 72%.
Federal Reserve officials last week expressed that they remain data-dependent and want to feel secure that inflation is sustainably trending toward the Fed’s 2% goal. Tuesday’s inflation report was relevant as it triggered a U-turn in XAU/USD prices.
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