Personal Consumption Expenditures (PCE)

Asian shares mostly declined as oil prices slipped, with major indices like the Hang Seng and Kospi dropping significantly. Economic concerns center on US inflation remaining above 3% and rising bond yields creating worries about higher borrowing costs. Investors are focused on the U.S.'s personal consumption expenditures (PCE) report and key speeches scheduled for Jackson Hole.

U.S. wholesale inflation fell 0.3% in June due to plunging energy prices, but rising tensions with Iran are creating uncertainty. Year-over-year wholesale prices increased 5.5%, down from 6% in May, while core wholesale prices rose 4.7% compared to June 2025. Producer prices dropped alongside consumer prices, easing pressure on the Federal Reserve to raise interest rates, though inflation remains above its 2% target.

U.S. markets showed divergent performance this week due to conflicting factors: falling oil prices from a tentative Iran ceasefire deal boosted the Dow and S&P 500, while rising inflation data and concerns over AI stock valuations caused the Nasdaq to drop. Inflation metrics, including a 4.1% annualized rise in headline PCE and 3.4% core PCE, reinforced expectations that the Federal Reserve will delay rate cuts. The first-quarter GDP estimate was revised upward to 2.1%, but analysts caution growth remains narrow.

Annual inflation reached 4.1 percent in May, the highest level in three years, with prices rising 0.7 percent in the month alone. The data was released by the Commerce Department, measured through the personal consumption expenditures (PCE) index.

The upcoming release of PCE inflation data, jobless claims, and housing figures will influence expectations for Federal Reserve rate cuts, with implications for cryptocurrency markets. The data will test investor confidence in potential monetary policy easing.