US PCE Index missed forecast and stabilized USD, rising commodity prices to continue boosting Australia’s exports
USD held firm on Monday after US inflation data missed expectation, which has provided investors some degree of assurance. The recently released US Personal Consumption Expenditures (PCE) price index, which excludes food and energy, increased 0.5% in May with an expectation of 0.6%. If everything goes as the Fed predicts, inflation is expected to slow down towards the year-end.
Commodity prices are still on the rise. Booming iron ore prices have boosted Australia’s export and will likely account for nearly half of its earnings this financial year. Ending in June, earnings from Australian resources exports are expected to hit the record at AUD 310 billion ($235 billion).
There are a number of key events in the week: on Wednesday we will have ADP payroll data, and on Friday we will have US non-farm payrolls and unemployment rate. The current expectation is at 675k. Moreover, for China we will have June PMI and Caixin Manufacturing PMI on Wednesday and Thursday respectively.