Causes and FX

Among the rich dataflow of last week in the US, the market focused squarely on the higher-than-expected print for core inflation. As of last Friday, only one-and-a-half rate cuts by the Fed remain priced in for this year. The details of the PCE release brought no more relief than the overall number: services inflation rose again, while manufactured
goods inflation moved back in positive territory, on a 3-month annualised basis, for the first time since June of last year.