US July core PCE +2.6% y/y vs +2.7% expected

• Prior was +2.6%
• PCE core +0.2% m/m vs +0.2% expected (unrounded +0.161%)
• Prior m/m +0.2%
• Headline inflation PCE +2.5% y/y vs +2.6% expected (Prior +2.5%)
• Deflator +0.2% m/m vs +0.2% expected (prior was +0.1%)
• Unrounded m/m +0.155%

Consumer spending and income for July:

• Personal income +0.3% vs +0.2% expected. Prior month +0.2%
• Personal spending +0.5% vs +0.5% expected. Prior month +0.3%
• Real personal spending +0.4% vs +0.2% prior

These numbers are a tad dovish and the US dollar edged down on a couple fronts but the moves were minimal. Overall, this report shows continued progress on inflation and is a green light for the Fed cut cut rates. The probability of 50 bps is at 30%, which is a tad lower than yesterday but will hinge on next Friday’s non-farm payrolls report.

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