EconoTicker

• Pending Home Sales (MoM, Aug): +4.0% (expected +0.2%, prior -0.3%).
• Pending Home Sales Index (Aug): 74.7 (prior 71.8).

Market impact: Positive for USD, as the rebound in pending sales suggests resilience in housing demand despite elevated mortgage rates.

Historical context: The index climbed to its highest level since mid-2023, marking a sharp turnaround after months of housing sector weakness.

• GDPNow (Q3): +3.9% (vs. +3.3% expected, +3.3% prior)

Market impact: Positive for USD, as the stronger projection points to resilient U.S. growth momentum heading into Q3.

Historical context: The latest estimate marks the highest forecast since early summer, with the model reflecting robust consumer spending and business investment despite tighter financial conditions.

• Michigan 1-Year Inflation Expectations: 4.7% (vs. 4.8% expected, 4.8% prior)
• Michigan 5-Year Inflation Expectations: 3.7% (vs. 3.9% expected, 3.5% prior)
• Michigan Consumer Expectations: 51.7 (vs. 51.8 expected, 55.9 prior)
• Michigan Consumer Sentiment: 55.1 (vs. 55.4 expected, 58.2 prior)
• Michigan Current Conditions: 60.4 (vs. 61.2 expected, 61.7 prior)

Market impact: Slightly negative for USD, as softer sentiment reflects consumer caution, though lower inflation expectations may support the Fed’s disinflation goals.

Historical context: Sentiment fell to a four-month low, dragged by weaker household outlook, while long-term inflation expectations eased from recent highs, reinforcing signs of moderating price pressures.

• Core PCE Price Index (MoM, Aug): +0.2% (vs. +0.2% expected, +0.2% prior)
• Core PCE Price Index (YoY, Aug): +2.9% (vs. +2.9% expected, +2.9% prior)
• PCE Price Index (YoY, Aug): +2.7% (vs. +2.7% expected, +2.6% prior)
• PCE Price Index (MoM, Aug): +0.3% (vs. +0.3% expected, +0.2% prior)
• Personal Income (MoM, Aug): +0.4% (vs. +0.3% expected, +0.4% prior)
• Personal Spending (MoM, Aug): +0.6% (vs. +0.5% expected, +0.5% prior)
• Real Personal Consumption (MoM, Aug): +0.4% (vs. +0.4% prior)

Market impact: Positive for USD, as steady inflation coupled with stronger income and spending suggests resilient demand and supports the case for keeping Fed policy restrictive.

Historical context: Core PCE, the Fed’s preferred inflation gauge, held at 2.9% YoY for a fourth straight month, while real consumption growth accelerated, signaling households remain willing to spend despite high rates.

• Fed’s Balance Sheet: $6.608T (vs. $6.609T prior)
• Reserve Balances with Federal Reserve Banks: $3.000T (vs. $3.020T prior)

Market impact: Neutral for USD, as the Fed’s balance sheet remained broadly unchanged while reserve balances dipped slightly, reflecting stable liquidity conditions.

Historical context: The balance sheet has hovered near $6.6T for months, with gradual declines from pandemic-era highs, while reserves remain elevated compared to pre-2020 levels, showing sustained system liquidity.

• 4-Week Bill Auction: 4.080% (vs. 4.040% prior)
• 8-Week Bill Auction: 4.000% (vs. 3.965% prior)
• 7-Year Note Auction: 3.953% (vs. 3.925% prior)

Market impact: Neutral for USD, as the modest uptick in yields reflects steady investor demand amid stable rate expectations.

Historical context: Yields edged higher across all maturities, with the 7-year note auction reaching its highest level in nearly two months, aligning with broader Treasury market adjustments ahead of Fed policy guidance.

• KC Fed Composite Index (Sep): 4 (vs. 1 prior)
• KC Fed Manufacturing Index (Sep): 4 (vs. 0 prior)

Market impact: Slightly positive for USD, as regional activity strengthened, signaling improving momentum in the Midwest manufacturing sector.

Historical context: September marked the highest readings since early 2023, with both composite and manufacturing indices moving firmly into positive territory after months of stagnation.

• Natural Gas Storage: +75B cubic feet (vs. +90B prior, +76B expected)

Market impact: Positive for natural gas prices, as a smaller-than-expected build signals tighter supply-demand balance.

Historical context: The injection slowed sharply from the prior week’s 90B build, keeping inventories slightly below seasonal norms heading into the winter heating season.

• Existing Home Sales (Aug): 4.00M (vs. 4.01M prior, 3.96M expected)
• Existing Home Sales MoM (Aug): -0.2% (vs. +2.0% prior)

Market impact: Neutral for USD, as sales slightly missed the prior level but came in above expectations, reflecting a housing market still constrained by affordability and supply issues.

Historical context: August’s decline was modest, marking the first drop in three months, with sales continuing to hover near multi-year lows under pressure from high mortgage rates.

• Retail Inventories ex-Auto (Aug): +0.3% (vs. +0.2% prior)
• Wholesale Inventories (MoM, Aug): -0.2% (vs. +0.1% prior, +0.2% expected)

Market impact: Slightly negative for USD, as weaker wholesale inventories may drag on Q3 GDP, even as retail inventories showed modest growth.

Historical context: The decline in wholesale inventories was the first in three months, reflecting cautious restocking, while retail inventories continued to expand steadily, underpinned by consumer demand.

• Core PCE Prices (Q2): +2.6% (vs. +2.5% prior, +3.5% expected)
• PCE Prices (Q2): +2.1% (vs. +2.0% prior, +3.7% expected)
• Real Consumer Spending (Q2): +2.5% (vs. +1.6% prior, +0.5% expected)

Market impact: Positive for USD, as softer inflation aligns with Fed targets, while stronger spending underscores resilience in household demand.

Historical context: Core PCE inflation continued its gradual decline from 2023 highs, while consumer spending posted its strongest quarterly gain in over a year, supporting GDP growth momentum.

• GDP (QoQ, Q2): +3.8% (vs. +3.3% prior, -0.5% expected)
• GDP Price Index (QoQ, Q2): +2.1% (vs. +2.0% prior, +3.8% expected)
• GDP Sales (Q2): +7.5% (vs. +6.8% prior, -3.1% expected)
• Goods Trade Balance (Aug): -$85.5B (vs. -$95.7B prior, -$103.6B expected)

Market impact: Positive for USD, as stronger-than-expected growth and an improved trade balance signal resilience in the U.S. economy.

Historical context: Q2 GDP marked the strongest expansion in nearly two years, with sales rebounding sharply from last quarter’s contraction. The August trade gap narrowed to its smallest since early 2022, reflecting stronger exports and softer imports.