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The Week Ahead: US Treasury auctions, Q4 GDP, PCE inflation

The Week Ahead: CMC Markets' pick of the key upcoming economic and company events.

Welcome to Michael Kramer’s pick of the top three market events to watch in the week beginning Monday, 26 February. 

The coming week’s key economic event arrives on Thursday in the form of the January reading of the core personal consumption expenditures (PCE) price index, said to be the US Federal Reserve’s preferred inflation measure. Markets will scrutinise the data for insights into the future direction of US monetary policy. We’ll also get a revised estimate of US fourth-quarter GDP and Treasury auctions of two-, five- and seven-year notes. All of these events will have a bearing on the Fed’s next interest rate decision on 20 March. They are also likely to indirectly impact currency pairs and, to a lesser extent, equities.

Seven-year US Treasury auction

Tuesday 27 February: Treasury auctions will occur throughout the week, with the two-year auction scheduled for Monday, 26 February at 4.30pm (UK time) and the five-year auction set for the same day at 6pm (UK time). The seven-year auction will take place on Tuesday at 6pm (UK time). These auctions are significant as a single poorly received auction could lead to higher rates across the entire yield curve.

The seven-year rate is particularly noteworthy among the Treasury notes. Its yield stands at 4.35%, about the same as the 10-year Treasury yield, and is encountering resistance in the zone from 4.35% to 4.37% that dates back to the highs of October 2022. A weak Treasury auction could push the seven-year rate above this resistance level, potentially towards 4.55%.


Wednesday 28 February: While the revised estimate of US fourth-quarter economic output might not be the most critical data point of the week, it is still significant. The US economy grew 3.3% in Q4, based on the initial estimate on 25 January. Economists expect the revised estimate to be unchanged at 3.3%, though personal consumption growth is expected to decrease slightly to 2.7% from 2.8%. Any upward revisions could give the dollar a reason to rally as they would indicate that the US economy has further distanced itself from the slowing growth observed in Europe.

The euro has recently strengthened against the dollar, reaching resistance on 22 February at $1.0890 before pulling back. If EUR/USD breaks above resistance at $1.089, its rally could extend to $1.10. Conversely, if the euro fails to maintain its momentum and pulls back on stronger US data, it could fall back to support around $1.0725.

US PCE inflation 

Thursday 29 February: The week's focal point will be the PCE inflation report, slated for release on Thursday morning in the US. The main personal consumption expenditures price index is projected to have risen 2.4% in the year to January, easing from 2.6% in December. The core PCE price index, which excludes volatile food and energy prices, is expected to have increased 2.8% year-on-year in January, down from 2.9% in December.

The unexpectedly high readings in the recent consumer and producer price inflation reports are likely factored into the above estimates, suggesting that any upward surprise could be significant. The PCE figures are eagerly anticipated by the market, particularly for their impact on 10-year Treasury rates, which have been hovering just below the resistance level of around 4.35% since the CPI report was released on 13 February. A break above 4.35% could propel the rate to 4.5%. The ongoing consolidation at the 4.35% level has formed an ascending triangle pattern on the charts, indicating a potential bullish continuation of the recent upward trend in rates. Meanwhile, the relative strength index is trending higher, suggesting that momentum is pointing to rates moving higher.

Key economic and company events

Here’s our rundown of notable economic announcements and company reports scheduled for the coming week:


• Japan: January consumer price index (CPI)
• US: Two-year, five-year Treasury note auctions
• Results: Berkshire Hathaway (Q4), Bunzl (FY), Zoom Video Communications (Q4)


• US: Seven-year Treasury note auction, February consumer confidence
• Results: Abrdn (FY), Ebay (Q4), Unite Group (FY)


• Australia: January CPI
• Eurozone: February consumer confidence, business climate index
• New Zealand: Interest rate decision
• US: Q4 GDP revised estimate 
• Results: Reckitt Benckiser (FY), Taylor Wimpey (FY), TJX Companies (Q4)


• Australia: January retail sales
• Eurozone: January retail sales
• Germany: February CPI
• US: January PCE inflation report
• Results: Best Buy (Q4), Dell (Q4), Hammerson (FY), International Consolidated Airlines (FY), London Stock Exchange Group (FY), Serco (FY), Snowflake (Q4)


• China: February manufacturing and services purchasing managers’ indexes (PMI)
• Eurozone: February CPI
• US: February Institute of Supply Management manufacturing PMI
• Results: IMI (FY), Pearson (FY), Rightmove (FY)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

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