By Publishing Editors USD slightly soft after tepid inflation data; yen well off session lows Market Briefs • Cooling US inflation bolsters September rate cut hopes • US June PCE Price Index MM 0.1%, 0.1% f'cast, 0.0% prev; YY 2.5%, 2.5% f'cast, 2.6% prev • US June Core PCE Price Index MM 0.2%, 0.1% f'cast, 0.1% prev; YY 2.6%, 2.5% f'cast, 2.6% prev • US June PCE Prices Ex-Food, Energy & Housing 0.2%, 0.0% prev, 0.1% r'vsd • US June PCE Services Prices Ex-Energy & Housing 0.2%, 0.1% prev, 0.2% r'vsd • US June Personal Income MM 0.2%, 0.4% f'cast, 0.5% prev, 0.4% r'vsd • US June Personal Consumption Real MM 0.2%, 0.3% prev, 0.4% r'vsd • US June Dallas Fed PCE 1.7%, 1.4% prev, 2.6% r'vsd • US July U Mich Sentiment Final 66.4, 66.0 f'cast, 66.0 prev; Conditions Final 62.7, 64.1 prev • US July U Mich 1-Year Inflation Final 2.9%, 2.9% prev; 5-Year Inflation Final 3.0%, 2.9% prev • U.S. short-term interest-rate futures edge up after inflation data; traders see July fed hold, September start to rate cuts • ECB's Schnabel: services inflation showing that last mile in inflation fight especially difficult- FAZ • Schnabel: speed of rate cuts will depend on data • ECB poll: Euro zone consumers see inflation at 2.8% in next 12 months, see inflation at 2.3% three years ahead; unchanged vs previous survey • G20 financial chiefs to flag global economic 'soft landing', warn of risks from war • First Bank of England rate cut since 2020 hangs on knife edge • New UK finance minister to outline fiscal 'mess', raising chance of tax rises • POLL-Japan June industrial output seen down on auto production suspention • Core inflation in Japan's capital perks up, demand-driven price growth soft • Japan urges G20 vigilance against excessive FX fluctuations Looking Ahead - Economic Data (GMT) • July 27 01:30 CN June Industrial profit YTD 3.4% prev Looking Ahead - Events, Other Releases (GMT) • July 28 16:30 German finance minister Lindner gives an interview to ARD Macro Themes in Play • The dollar slipped lower against most other major currencies on Friday after U.S. PCE inflation data failed to derail expectations that the Fed will cut rates by September and potentially ease three times this year. • Next week's Tuesday-Wednesday Fed meeting is a key risk on the immediate horizon, though rate futures are discounting no move, so the question is what signals polycymakers send about the September FOMC gathering, while the U.S. non-farm payrolls report on Friday could help shape expectations. • There is less certainty about the outcome of the BOJ meeting next week, though the shakeout of yen shorts appears to have settled for the moment. • Though core PCE inflation came in slightly above expectations, the overall year-over-year number eased as expected while personal income growth fell more than forecast. • University of Michigan consumer sentiment rose slightly, in contrast to the Reuters consensus forecast for a flat reading, while one-year inflation expectations were stable at 2.9% and the five-year view edged up to 3.0% from 2.9%. • U.S. Treasury yields were 4-6bp lower across maturities. • The S&P 500 rallied 0.96% by New York afternoon trade as some megacap tech and chip stocks recovered from the week's pummeling, while the largely in-line inflation readings kept bets of an early rate cut alive. • WTI fell 2.02% on declining Chinese demand and hopes of a Gaza ceasefire agreement that could ease Middle East tensions and accompanying supply concerns. • Copper eased 0.52% and was on track for a third consecutive weekly decline on concerns that a return of physical buying could be short-lived in top consumer China as the economy remains sluggish in the absence of significant stimulus. • Gold rallied 0.84%, supported by lower U.S. Treasury yields amid bolstered optimism for an interest rate cut by the Fed in September after the PCE data. • Heading toward the close: EUR/USD +0.13%, USD/JPY -0.12%, GBP/USD +0.13%, AUD/USD +0.24%, GBP/JPY +0.1%, EUR/JPY +0.04%,
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