Core PCE Seen at 3.4% as October Hike Hinges on the Data
U.S. markets are closed for the weekend. Trading resumes Monday, September 28, at 9:30 a.m. ET (4:30 p.m. in Istanbul).
The week's direction will be set by August core PCE, due Wednesday at 8:30 a.m. ET (3:30 p.m. in Istanbul). Consensus is 3.4% year over year, up from 3.3% in July. The monthly gain is expected at 0.3%.
This is the Fed's preferred inflation gauge. Fed funds futures put the odds of an October hike between 62% and 67%, depending on the source. On Friday morning they were near 70%.
A hike is still the base case. It is not locked in.
Two things happened on the Iran front after our Saturday brief. Trump confirmed the report that broke after Friday's close: "I'm rejecting their deal."
On Sunday morning, Iranian Foreign Minister Abbas Araghchi did not back down on his conditions. He said Tehran is waiting for mediators to relay the definitive U.S. position and will decide based on it.
Brent closed Friday down 2.1% at $104.32, before the rejection. Oil futures reopen Sunday at 6 p.m. ET (1 a.m. Monday in Istanbul).
The week's key earnings report comes from Micron after Wednesday's close. Consensus calls for EPS of $31.50 on revenue of about $51B. A year ago, those figures were $3.03 and $11.3B.