All eyes on PCE as inflation test looms for U.S. markets
U.S. markets are likely to stay focused on inflation ahead of the May Personal Consumption Expenditures (PCE) report due tomorrow night, which is the Federal Reserve’s preferred inflation gauge. Consensus expectations point to headline PCE rising 4.1% year-on-year (YoY), up from 3.8% in April and marking the highest reading since April 2023, while monthly PCE is forecast at +0.5% month-on-month (MoM). Core PCE is expected at +0.4% MoM and 3.3% YoY.
The anticipated increase is largely attributed to elevated energy prices, with economists describing inflation as remaining sticky in the near term despite expectations that price pressures could ease later this year as oil prices moderate and tariff-related effects fade.
Investors will be watching the PCE release closely for clues on the Fed's policy path. While the central bank has indicated a meeting-by-meeting approach, economists are increasingly discussing the possibility of interest-rate hikes later this year should inflation remain persistent (Morningstar, 23 June)
With markets likely to react sharply to tomorrow's PCE data and any implications for Fed policy, investors expecting heightened volatility in U.S. equities may consider using warrants to express a directional view on key U.S. indices. Warrants offer leveraged exposure to market movements, allowing investors to potentially capitalise on short-term opportunities around major macroeconomic events such as the PCE inflation release.
See how Macquarie's warrants tracking US indices move alongside the underlying futures!
S&P call $S&P 7800MBeCW260918(TDRW.SI)$: https://warrants.com.sg/tools/livematrix/TDRW
S&P put $S&P 7000MBePW260918(IYUW.SI)$: https://warrants.com.sg/tools/livematrix/IYUW
Nasdaq call $NASDAQ 31000MBeCW260918(EFKW.SI)$: https://warrants.com.sg/tools/livematrix/EFKW
Nasdaq put $NASDAQ 26000MBePW260918(YVJW.SI)$: https://warrants.com.sg/tools/livematrix/YVJW
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
