Anna 
Today’s economic reports in the US are set against the backdrop of Fed Governor Waller’s impactful comments, echoing the sentiment expressed by a majority of Fed officials favoring fewer rate cuts this year. While revisions to Q4 GDP are unlikely to sway the market, focus remains on next Friday’s nonfarm payroll report for insights into job market dynamics.
Despite a plethora of data including the Chicago PMI, KC Fed’s manufacturing survey, pending home sales, and University of Michigan’s consumer confidence index, attention remains fixed on Waller’s remarks and their implications for monetary policy.
Looking ahead, tomorrow’s data assumes greater significance, although most markets in Europe and North America will be closed. The spotlight will be on personal income and consumption figures, with expectations of a moderation in income growth offset by a rebound in consumption following weather-related disruptions in January.
Additionally, market participants await the release of the CPI and PPI figures, which are poised to overshadow the PCE deflators. While headline inflation is expected to edge higher, Chair Powell’s comments at the Macroeconomic and Monetary Policy Conference could offer insights into the Fed’s stance, potentially tempering expectations of rate cuts.
Meanwhile, the US dollar maintains its position near the upper end of its recent range against the Canadian dollar, with resistance seen around the CAD1.3620-25 area. On the contrary, the greenback continues to weaken against the Mexican peso, despite supportive factors such as Mexico’s lower-than-expected unemployment rate and trade deficit.
While the peso’s carry appeal remains robust, the broader strength of the US dollar has provided some support. However, initial resistance for the greenback against the peso is anticipated in the MXN16.65-67 area. With Mexican markets closed today and tomorrow, further developments in the currency pair await broader market participation.
