<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-january-pce-core-inflation-47-vs-43-expected-20230224/“>US January PCE core inflation 4.7% vs 4.3% expected.</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-january-new-home-sales-670k-vs-620k-expected-20230224/“>US January new home sales 670K vs 620K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/umichigan-consumer-sentiment-for-february-670-versus-649-last-month-664-preliminary-20230224/“>UMichigan consumer sentiment for February 67.0 versus 64.9 last month (66.4 preliminary)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-mester-inflation-risks-still-tilted-to-the-upside-20230224/“>Fed’s Mester: Inflation risks still tilted to the upside</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/mester-fed-will-need-to-go-above-5-and-stay-there-for-awhile-20230224/“>Mester: Fed will need to go above 5% and stay there for awhile</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-mester-still-think-we-need-to-be-somewhat-above-5-20230224/“>Feds Mester: Still think we need to be somewhat above 5%. Inflation is still too high.</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-collins-recenf-us-data-confirm-case-for-more-rate-hikes-20230224/“>Fed’s Collins: Recenf US data confirm case for more rate hikes</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-bullard-the-current-situation-may-fall-under-rubric-of-credible-disinflation-20230224/“>Fed’s Bullard: The current situation may fall under rubric of ‚credible‘ disinflation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-jefferson-wage-growth-is-running-too-high-to-be-consistent-with-2-inflation-20230224/“>Feds Jefferson: Wage growth is running too high to be consistent with 2% inflation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/dallas-fed-january-trimmed-mean-pce-price-idnex-63-vs-40-prior-20230224/“>Dallas Fed January trimmed mean PCE price idnex +6.3% vs +4.0% prior</a></li></ul><p>Markets:</p><ul><li>S&P 500 down 44 points to 3975</li><li>US 10-year yields up 6.6 bps to 3.95%</li><li>WTI crude oil up $1.19 to $76.58</li><li>Gold down $11 to $1811</li><li>USD leads, JPY lags</li></ul><p>Friday’s PCE inflation report certainly didn’t cool worries about rising prices as all the main numbers in the report aside from income ran hot. The market reaction was more of what we’ve been seeing lately — US dollar strength. </p><p>The data helped the dollar break through some resistance levels as it climbed to the highs of the year on most fronts (with GBP as a notable exception). AUD/USD broke through the 200-day moving average and fell to 0.6726, closing near the lows of the day and at the worst levels since early January.</p><p>USD/JPY continued to run and has now nearly filled in the December gap from the BOJ surprise. What’s interesting is that despite the rout in stocks, the yen was the worst performer today. That’s an indication the market is pricing in better global growth and higher rates everywhere. That’s a theme to watch in the week ahead as the calendar turns.</p><p>EUR/USD fell for the fourth consecutive day and is approaching the early-January low of 1.0479. The dollar is getting a broad lift from chatter about higher Fed rates. The derivatives market hinted at 5.41%, which is a decent chance of 5.50-5.75% this year while US 2s hit 4.81%, which is the highest close since 2007 and an enticing risk-free parking spot for two years.</p><p>It wasn’t a complete whitewash for the dollar though, as USD/CAD fell 60 pips from the highs as oil prices climbed to finish the week unchanged. We’re at the point where commodities and other growth-sensitive assets have to make a decision about whether to cheer a better near-term outlook or cower at the thought of higher central bank rates and a potentially recession in 2024.</p><p>Have a wonderful weekend.</p>

This article was written by Adam Button at www.forexlive.com.

<p>On the day:</p><ul><li>S&P 500 -1.0%</li><li>DJIA -1.1%</li><li>Nasdaq Comp -1.7%</li><li>Russell 2000 -1.2%</li><li>Toronto TSX -0.3%</li></ul><p>On the week:</p><ul><li>S&P 500 -2.7% — worst since Dec</li><li>Nasdaq Comp -3.3% — worst since Dec</li><li>Russell 2000 -3.1%</li><li>Toronto TSX -1.7%</li></ul><p>It was a rough one for US stocks but not as bad as it looked midday. The S&P 500 fell 45 points to 3974 after falling as low as 3947. There were a series of higher lows throughout the day, indicating that dip buyers are still lurking. The 200-day moving average held today on the first challenge.</p><p>The bigger story is the bond market with US 2s closing at 4.81%, which is the highest since 2007.</p>

This article was written by Adam Button at www.forexlive.com.

<p>When you zoom out and look at the weekly oil chart, all the volatility seems to spill away. There have been plenty of whippy moves in the past few months but it’s all taken place in a range of $70-85.</p><p>This week, oil bounced around again but closed almost perfectly flat on the week after a 99-cent gain today.</p><p>The bears are worried about inventories building in the US and muddling signs from China’s reopening. The bulls are encouraged by better global growth and Russian supplies stumbling.</p><p>Ultimately though, we’re right in the middle of the range and waiting for a break on one side or the other. At this point, I can’t imagine either side holding a great deal of conviction.</p>

This article was written by Adam Button at www.forexlive.com.