On Wednesday of this week (November 27th), global financial market sentiment turned cautious as investors awaited the release of the US core PCE price index, initial jobless claims, and revised GDP data. The US dollar index fell to a one week low due to market concerns over Trump's tariff remarks, while precious metal prices rebounded on support, attracting buying interest again for gold. The crude oil market has experienced narrow fluctuations due to the easing of tensions in the Middle East and uncertainty before the OPEC+meeting. In addition, the European market was under pressure due to budget risks in France, with the Fadly spread hitting a new high and the EUR/USD slightly strengthening.

The following is a detailed analysis of the main varieties and market trends.

Gold and precious metals: rebound in safe haven demand drives price rebound

Spot gold prices rose 0.7% to $2649.14 per ounce, continuing the recovery trend after a sharp decline at the beginning of the week. Gold had previously been under pressure due to a cooling demand for safe haven after the ceasefire agreement between Israel and Lebanon, but the weakening of the US dollar index and market expectations of a dovish path for the Federal Reserve's interest rate hike provided support for gold prices.

Renowned analysts have stated that market expectations for the Federal Reserve's interest rate cut in December have risen to 66.5%, a significant increase from the beginning of this week. Non income assets such as gold often perform strongly in low interest rate environments. Meanwhile, the PCE price index to be released tonight may further strengthen expectations of interest rate cuts, thereby boosting gold prices.

Other precious metals such as silver, platinum, and palladium also rose with gold, with spot silver trading at $30.52 per ounce, up 0.3%; Platinum and palladium rose by 0.4% and 1% respectively. The rebound in demand for physical gold indicates a strong willingness of investors to buy on dips, further supporting market sentiment.

Crude oil market: easing situation in the Middle East and wait-and-see sentiment before OPEC+meeting

Brent crude oil is currently trading at $72.46 per barrel, with a slight decrease of 0.43% for the day; US crude oil rose slightly by 0.26% to $69.95 per barrel. The temporary easing of the situation in the Middle East has exerted some pressure on crude oil prices, but rumors that OPEC+may delay production plans have kept the market cautious.

Market analysts have pointed out that OPEC+may be inclined to postpone the originally planned production increase in January next year, in response to low demand and pressure from non OPEC oil producing countries to increase production. At the same time, news of a significant reduction of nearly 6 million barrels of crude oil inventories in the United States last week supported short-term oil prices, but considering the uncertainty of winter demand in the Northern Hemisphere, the market expects oil prices to fluctuate between $65-70.

Some analysts believe that the upcoming Trump administration's policies will have a significant impact on crude oil supply and demand, especially potential energy policy adjustments and geopolitical risk premiums.

Foreign exchange market: US dollar falls, Japanese yen performs strongly

The US dollar index fell 0.42% to 106.4294, a one week low. Trump's latest tariff remarks have made the market uneasy, and investors are concerned that this may trigger a broader trade conflict. At the same time, the demand for fund rebalancing at the end of the month has put additional pressure on the US dollar. 000

The USD/JPY rose 1.17% to 151.290, the highest point since November 6th. The increase in market bets on Japan's December interest rate hike and the decrease in geopolitical risk premium have jointly driven the appreciation of the yen. Analysts point out that if tonight's US economic data falls short of expectations, the US dollar may face the risk of further correction, while the Japanese yen is expected to continue to benefit.

The EUR/USD rose 0.32% to 1.0521, while the GBP/USD rose 0.33% to 1.2610. The European market was dragged down by budget issues in France, with the Fadly spread hitting a 12 year high of 90 basis points, but the euro has not yet been significantly negatively affected.

European bond market: French budget pressure pushes up interest rate spreads

The French treasury bond bond market is under pressure due to budget concerns. The spread of 10-year French treasury bond bonds over German treasury bond has expanded to 90 basis points, the highest level since 2012. Analysts point out that although the French coalition government may compromise on the budget issue, medium-term fiscal risks remain significant, which puts some pressure on the overall financial markets of the eurozone.

Core PCE data will reveal progress on the Federal Reserve's inflation target

The core personal consumption expenditure (PCE) price index for October is expected to increase by 0.3% month on month and 2.8% year-on-year, approaching the growth rate level of September, while overall PCE inflation may slightly rise from 2.1% to 2.3%. Although the data shows that inflation is trending towards moderation, there are still doubts in the market about whether the Federal Reserve will further cut interest rates at the next meeting.

As the core indicator for measuring inflation by the Federal Reserve, the release of PCE data will have a potential impact on the trend of the US dollar, especially when other key data such as initial jobless claims and durable goods orders are released on the same day. The market currently holds a divergent attitude towards the direction of the year-end interest rate policy, and the Federal Reserve's adjustment of the wording "making progress" on inflation has further exacerbated market uncertainty.

The impact of PCE data on the market cannot be underestimated, especially in terms of US dollar trends, bond yields, and stock market volatility. If the core PCE annual rate rises to 2.8% as expected, it will strengthen the Federal Reserve's view that inflation is "continuously under control", which may support the strengthening of the US dollar. However, if the data unexpectedly deviates from expectations, the market may have divergent interpretations of the Federal Reserve's policy path. Higher core inflation may lower investors' expectations of further interest rate cuts, thereby pushing up short-term bond yields and putting pressure on stock market valuations; Lower than expected inflation may increase market concerns about slowing economic growth and drive up demand for safe haven.

In addition, this data release coincides with the eve of Thanksgiving and is released simultaneously with multiple key economic indicators, including initial jobless claims, durable goods orders, and GDP correction values. This information intensive environment may amplify market reactions and trigger investors to readjust their positions and expectations before the Federal Reserve's December meeting. Therefore, PCE data is not only a core tool for measuring inflation, but also provides important clues for future policy directions, and its market influence deserves high attention.

Future Trends and Prospects

Overall, tonight's core PCE data will be the focus of global market attention and may significantly affect the trend of the US dollar and Federal Reserve policy expectations. If the data shows that inflation has fallen more than expected, the US dollar may further weaken, and gold is expected to continue its rebound momentum. The crude oil market needs to focus on the follow-up performance of OPEC+conference results and US inventory data.

The market may maintain a volatile pattern in the short term, and investors need to be alert to the impact of the Middle East situation, European and American monetary policies, and other potential geopolitical factors on the market.