Fed minutes: Inflation expected to rise to 2% target in 2019

Federal Reserve members continued to view the recent slowdown in inflation as transitory and insisted that it would rise to the central bank’s target of 2% over the longer-term, according FOMC minutes released on Wednesday. The minutes showed that the recent slowdown in inflation didn’t deter the Federal Reserve from its stance of raising rates gradually, as most members expect that inflation will rise to central bank’s target of 2% in 2019.

US Factory Orders down by 0.8%

New orders for U.S.-made goods fell more than expected in May, but orders for capital equipment were a bit stronger than previously reported, suggesting the manufacturing sector remained on a moderate growth path. Factory goods orders dropped 0.8 percent, the Commerce Department said on Wednesday after a revised 0.3 percent decline in April. It was the second straight monthly decrease in orders.

US Manufacturing PMI rose more than expected

The June PMI registered 57.8 percent, an increase of 2.9 percentage points from the May reading of 54.9 percent. The New Orders Index registered 63.5 percent, an increase of 4 percentage points from the May reading of 59.5 percent. The Production Index registered 62.4 percent, a 5.3 percentage point increase compared to the May reading of 57.1 percent. The Employment Index registered 57.2 percent, an increase of 3.7 percentage points from the May reading of 53.5 percent. The Supplier Deliveries index registered 57 percent, a 3.9 percentage point increase from the May reading of 53.1 percent.

USD - Major events in the week ahead

Events that marked the week:

On Monday Durable Goods Orders figures were published. Orders for non-military capital goods excluding aircraft fell 0.2% (est. 0.4% gain) after 0.2% increase in prior month. Shipments of those goods, which are used to calculate gross domestic product, fell 0.2% after 0.1% gain. Bookings for all durable goods fell 1.1% (est. 0.6% drop) following 0.9% decline; excluding transportation-equipment demand, which is volatile, orders rose 0.1% (est. 0.4% gain).