Micron Guidance Resets Tech Sentiment Ahead of US PCE Print

Micron (MU) pulled markets back from the edge of a tech rout. The chipmaker's revenue guidance for fiscal Q3 2026 blew past analysts' estimates, sending MU stock sharply higher after hours. US equity index futures jumped: the Nasdaq 100 gained 2%, the S&P 500 added 0.6%. The read-through into Asia-Pacific was immediate. South Korea's KOSPI surged nearly 6%. Japan's Nikkei 225 added almost 5%, closing in on its all-time high of 72,831.

Brent crude dropped on progress in US-Iran peace talks and the reopening of the Strait of Hormuz. The benchmark slipped below its 200-day SMA at $78.36, testing pre-war levels and now on the doorstep of support at $72.36. That is a meaningful disinflationary signal heading into today's US PCE release, said Aaron Hill, chief market analyst at FP Markets. Bond yields eased off their week's highs as oil fell.

The Australian Jobs Mix and RBA Stakes

Australia's May jobs report landed overnight. Employment rose by 40,300, comfortably ahead of the 30,300 estimate. The unemployment rate ticked down to 4.4% from 4.5%, in line with expectations. The composition undercut the headline. Of that 40,300 gain, just 5,200 was full-time work. The rest came from part-time positions. That is not the kind of mix that points to firms confidently expanding permanent headcount.

Household spending data, also released today, showed a 1.3% month-on-month rise and 5.5% year-on-year growth. That print is clearly hawkish. It follows yesterday's CPI release, which showed the RBA's preferred trimmed-mean gauge ticking up to 3.6% year-on-year from 3.4%, even as headline CPI eased to 4.0% on cheaper fuel. Together, these figures keep the debate about an RBA hike alive in some corners. Hill called the picture mixed for the AUD: the jobs beat offers near-term support, the soft composition caps enthusiasm, and sticky core inflation keeps the hawkish case alive underneath.

PCE Countdown

The US May PCE data lands at 12:30 pm GMT. Economists expect year-on-year headline and core metrics of 4.1% (up from 3.8% in April) and 3.4% (up from 3.3%), respectively. Month-on-month headline and core are forecast at 0.5% and 0.3%. Hill said he is looking at a 4.2% upside surprise in the year-on-year headline and a 3.9% miss, with the year-on-year core ranging from 3.5% on the high side to 3.2% on the low side.

At the Fed's last meeting, nine of the 18 officials voted to raise the target rate this year. The market perceived the tone as hawkish. A hotter-than-expected PCE print today would reaffirm that pivot toward tighter policy. As of writing, markets price in 16 basis points of Fed tightening by year-end. That is about a 60% probability.

Hill noted that the USD has been heavily bid recently and that positioning data shows it is one of the most overstretched currencies, carrying a bullish crowded position. That opens the dollar to a downside shock if the PCE numbers come in soft or even in line, he wrote.

For traders watching the EUR/USD profile or the GBP/USD profile, the PCE release is the week's defining catalyst. A miss on core inflation could trigger a sharp unwind of dollar longs, while a beat would reinforce the hawkish Fed narrative and keep the dollar bid into month-end.