Is data adjustment useful? From the short-term market reaction, it is useful, but can it really solve the crisis? We still need to wait and see the market response.
After the significant downward revision of the PCE data calibration tonight, the market reacted well. #Bitcoin took the lead, breaking through 85,000 on the 1-hour chart, US stocks rose, and US Treasury yields for 2Y, 10Y, and 30Y all declined simultaneously.
In the short term, modifying the data calibration is useful. Although I think it is false, it doesn't matter. A lie told for a lifetime becomes the truth. Since the market now believes it, this proves that the data revision is effective.
However, whether the market fully believes it cannot be concluded at this time. The data calibration revision has reduced the probability of a rate hike in October, lowering it to 34.9%, but it has not completely dispelled the expectation of a rate hike in December. Currently, the probability of a December rate hike has increased to 59.4%, which is a success.
Secondly, the good performance of US stocks and other risk assets indicates that the data has a short-term effect on boosting the market. The collective decline in bond yields also has an effect. However, it can be seen that the 2Y yield declined more significantly, while the long-term bonds, 10Y and 30Y, fell shortly after the data release but then continued to rise.
From the perspective of suppressing long-term bond sell-offs alone, tonight's data revision clearly has limited effect. The long-term bond market still lacks confidence in endogenous inflation and is mixed with key issues such as fiscal supply. If the long-term bond market cannot slow down the sell-off, potential market risks still exist! This is something to be cautious about! #10月加息预期回落，今晚PCE成关键
Disclaimer: OKX Orbit content is provided for informational purposes only. Learn more
