The market holds its breath for this delayed key data: September PCE will be revealed tonight. If inflation remains sticky, will it shake the market's general expectation of a rate cut by the Federal Reserve next week?
Due to the previous government shutdown, the September PCE and personal income data, originally scheduled for release at the end of October, will be published tonight at 8:30 AM Eastern Time (8:30 PM Beijing Time). At this point of high macro uncertainty, this report is undoubtedly seen as a late inflation "verdict."
In simple terms, tonight's data may guide the market toward one of the following three paths:
• In line with expectations (month-on-month 0.2%/year-on-year around 2.9%) - rate cut expectations solidified, year-end trend continues
• Below expectations - risk appetite further increases, U.S. stocks likely to test previous highs
• Above expectations - interest rate expectations repriced, the market may face a rapid correction
Amid the complex interweaving of macro signals, this delayed inflation data will substantively impact the market's judgment on the Federal Reserve's next steps - will next week's rate decision mark the beginning of a shift towards policy stability, or is it a game delayed by data?
The current market is already showing downward pressure, but a night-time rebound (after 11 PM Beijing Time) cannot be ruled out following the data release. In a volatile market, caution is needed regarding position risk and changes in market structure.
