Attention on the U.S. Core PCE Deflator?

Attention on the U.S. Core PCE Deflator?

22.12.2021

Yesterday, the three major U.S. stock indices all rebounded, creating a “risk-on” atmosphere characterized by rising stock prices, interest rates, and crude oil prices. However, since some view this as a “dead cat bounce”—a rebound following a sharp decline—it is important to closely monitor whether the stock market rally will continue.The Fear Index (VIX) has fallen by about 8% to 21.0.

In the foreign exchange market, the U.S. dollar rose slightly, and the EUR/USD pair fell from 1.130 to 1.126. During today’s Asian trading session, the EUR/USD pair has been testing lower levels, and since it is currently trading below the 20-period moving average on the 4-hour chart, traders should remain cautious about further declines.The U.S. dollar is also showing strength against the yen, with USD/JPY trading around 114.12. Furthermore, given the recent correlation between the U.S. dollar and the stock market, it is important to monitor stock price movements as well.

Today, at 16:00 European time, the UK’s third-quarter GDP (final reading),the UK’s third-quarter current account balance at 16:00 (European time), and the French Producer Price Index at 16:45; and during U.S. trading hours, the U.S. MBA Mortgage Applications Index at 21:00, the U.S. third-quarter GDP (final reading) at 22:30,U.S. personal consumption, U.S. core PCE deflator, and U.S. Chicago Fed National Activity Index; at 24:00, U.S. existing home sales and U.S. consumer confidence; and at 24:30, U.S. weekly crude oil inventories.We will monitor these economic releases closely while assessing the direction of the U.S. dollar.