Inflation Obsession: Trader's guide to incoming US PCE and CPI data
Markets are still digesting the fragile US-Iran ceasefire, which Tehran claims has already been violated.
At the time of writing, major assets are paring some of yesterday's (Wed, April 8) spectacular moves:
WTI Crude Oil (USOUSD): +2.7%, recovering slightly after posting its biggest 1-day drop (16.4%) in nearly 6 yeras (April 2020 - amid Covid-19 pandemic), still sub-$100/bbl levels
Gold (XAUUSD+): -0.1%, hovering above its 100-day simple moving average (SMA) while hanging on to $4700 handle
S&P 500 futures (SP500): -0.3%, resisted at its 100-day SMA and trading slightly below 6800 psychological level
Bitcoin (BTCUSDT):Â -0.5%, holding around the $71k mark
Even as markets are tensely watching the latest geopolitical developments out of the Middle East, investors and traders are set to also contend with 2 top-tier US inflation data reports:
1) Thursday, April 9th @ 12:30 PM UTC: US February PCEÂ
(PCE = personal consumption expenditure - Fed's preferred way of measuring inflation)
Economists forecasts:
PCE month-on-month (Feb 2026 vs. Jan 2026): 0.4%
If so, 0.4% will be faster growth than January's 0.3% m/m number
PCE year-on-year (Feb 2026 vs. Feb 2025): 2.8%
If so, 2.8% would match January's y/y number
Core PCE (excludes food and energy prices, which are more volatile) month-on-month: 0.4%
If so, 0.4% would match January's core PCE m/m number
Core PCE year-on-year: 3.0%
If so, 3% would be slightly slower growth than January's 3.1% core PCE y/y number
2) Friday, April 10th @ 12:30 PM UTC: US March CPI
(CPI = consumer price index - measures headline inflation)
Economists forecasts:
Headline CPI month-on-month (March 2026 vs. Feb 2026): 0.9%
If so, 0.9% would be FAR HIGHER than February's 0.3% m/m number
Headline CPI year-on-year (March 2026 vs. March 2025): 3.4%
If so, 3.4% would be FAR HIGHER than February's 2.4% y/y number
Core CPI (excluding more volatile items such as food and energy prices) month-on-month: 0.3%
If so, 0.3% core CPI will be slightly faster than February's 0.2% m/m number
Core CPI y/y: 2.7%
If so, 2.7% will be slightly faster inflation growth than February's 2.5% core CPI y/y number
Arguably Friday's CPI carries more weight, given that it captures headline inflation data during the first month of the US-Iran war.
Potential Near-Term Scenarios
If US inflation figures come in lower-than-expected, easing fears of a US inflation spike due to soaring oil prices since the US-Iran conflict, that may boost assets like US stock indices (SP500, NAS100, DJ30, etc.), Gold, Silver, and even cryptos.
If US inflation figures come in higher-than-expected, confirming fears of a US inflation spike due to soaring oil prices since the US-Iran conflict, that may drag lower US stock indices (SP500, NAS100, DJ30, etc.), Gold, Silver, and even cryptos.
Currently, markets expect ZERO Fed rate cuts in 2026 - a far cry from the two rate cuts (50 basis points total) forecasted prior to the war.Â
Markets estimate just a 1-in-3 chance that the Fed can only trigger its next rate cut in Q1 2027, likelier (50-50 chance) only that the rate cut may arrive in mid-2027.
How are major assets expected to react?
For precious metals and commodities, the incoming PCE data is expected to be the larger volatility-trigger relative to the CPI.
Here are the % forecasts for the 6 hours after the PCE release @ 12:30 PM UTC Thursday, April 9th:
Gold (XAUUSD+): as much as 1.3% up / 0.7% down
(CPI: as much as 1.2% up / 0.4% down)
Silver (XAGUSD): as much as 2.9% up / 1.5% down
(CPI: as much as 1.6% up / 1% down)
Brent Oil (UKOUSD): as much as 1.1% up / 1.1% down
(CPI: as much as 1.1% up / 0.9% down)
WTI Crude Oil (USOUSD): as much as 1.4% up / 1.4% down
(CPI: as much as 1.1% up / 1% down)
However, for cryptos, major FX pairs, and US stock indices, the CPI is expected to be the larger volatility-trigger relative to the PCE.
Here are the % forecasts are for the 6 hours after the CPI release @ 12:30 PM UTC Friday, April 10th:
Bitcoin (BTCUSDT): as much as 2% up / 1.5% down
(PCE: as much as 0.85% up / 1.3% down)
Ethereum (ETHUSDT): as much as 4.5% up / 2.5% down
(PCE: as much as 1.7% up / 2.2% down)
Ripple (XRPUDST): as much as 2.4% up / 1.7% down
(PCE: as much as 1.9% up / 1.9% down)
Solana (SOLUDST): as much as 4.4% up / 2% down
(PCE: as much as 2.2% up / 2.3% down)
EURUSD+: as much as 0.7% up / 0.2% down
(PCE: as much as 0.2% up / 0.2% down)
GBPUSD+: as much as 0.5% up / 0.2% down
(PCE: as much as 0.3% up / 0.2% down)
USDJPY+: as much as 0.2% up / 0.6% down
(PCE: as much as 0.25% up / 0.2% down)
S&P 500 (SP500): as much as 1% up / 1.5% down
(PCE: as much as 1% up / 0.7% down)
Nasdaq 100 (NAS100): as much as 1.2% up / 1.5% down
(PCE: as much as 1.3% up / 1% down)
Still, market reactions are bound to be subservient to any major headlines about the Iran war.
NOTE: US-Iran negotiations are set to be held in Pakistan on Saturday, April 11th.