HYCM | Mar 29, 2021 05:39AM ET
Last week’s US consumer and inflation data was broadly in line with market expectations. Following surges in both income and spending in January, the consensus was for declines in February.
The US core PCE price index came in just 0.1% higher month-over-month, as expected, while the year-over-year reading at 1.4% was just slightly lower than the market’s 1.5% estimate. Personal spending dropped by 1%, slightly higher than analyst predictions of a 0.8% drop, and personal income was down by 7.1%, beating market expectations of a 7.3% decline.
A revised reading of the University of Michigan’s Consumer sentiment survey revealed a US consumer that’s now highly confident of a recovery. Friday’s revised reading came in at 84.9, up from the flash reading of 83 earlier in the month. This is a sharp improvement from February’s 76.8 figure, and also bested analyst expectations at 83.6.
US markets have been reading the data as tentatively positive, particularly the inflation data, which had 10-year yields easing a touch off their highs and equities rebounding. 10-year yields were rejected from the 1.68 level on Friday and are now heading down to test the 20-day MA at around 1.62 as support. Below this, we have the crucial 1.588 level, the break of which will be the first lower-low since mid-March.
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