Brief analysis of the news on June 28

The market trend may be heating up, and it is expected that the safe-haven products will have limited room for decline. Whether it will immediately turn to rise will depend on tonight

1. PCE index forecast: The market predicts that the core PCE growth rate will slow to 0.1% month-on-month, while the overall PCE and core PCE year-on-year growth rates are expected to slow to 2.6%. This indicates that inflation may be slowing.

2. Personal income and expenditure forecasts: Personal income and consumer spending are expected to grow by 0.4% and 0.3% month-on-month, respectively, which may indicate that the slowdown in economic growth and consumer spending is gradual.

3. Impact on Fed policy: If the core PCE forecast comes true, it may provide a basis for the Fed to cut interest rates in September. Many economists and analysts expect that if inflation continues to fall, the Fed may cut interest rates later this year.

4. Differences between PCE and CPI: Although PCE is the Fed's main inflation target, CPI is more concerned by the market. PCE is usually lower than CPI, partly due to different housing weights.

5. Factors contributing to the decline in inflation: The pullback in gasoline prices in May, the modest increase in healthcare prices, continued price weakness in the commodity sector, and the decline in portfolio management prices and airfares are all potential reasons for the decline in inflation.

6. Fed caution: Despite the decline in inflation, Fed officials are cautious about cutting interest rates, emphasizing the need to see confidence that inflation continues to fall to target levels.

7. Market expectations: Futures markets show that the Fed is likely to cut interest rates for the first time in September and may cut interest rates again before the end of the year.

8. Gold market: Despite the uncertainty, the gold market may be supported by the weak PCE data. If the PCE data is not good, the downside for gold may be limited.

9. Technical analysis: From a technical analysis perspective, gold may be bearish in the short term, but if it can break through key technical levels, it may resume its upward trend.

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