DBG Markets: Market Report for Dec 01, 2025

PCE, Fed, and Inflation Data Set the Stage:Dollar Pressure and Gold Rally？

Last week ended on a positive note, despite a mild Friday pullback, as the market digested mixed signals from the US PPI data. Although major indices recouped most of the week‘s losses, November’s overall price action shows growing pressure, with all three forming long upper wicks, indicating weakening bullish momentum.

Rate-cut expectations kept the Dollar Index under pressure, pushing it below the key 100 level and confirming that resistance remains firm for bulls. Gold held above $4,200 on dollar weakness and rising easing expectations, marking a one-month high.

Weekly Core Focus: PCE Data & Fed Comments

This week, the focus will be mainly on key PCE data and Fed comments, especially from Fed Chair Powell.

· PCE Price Index: The Feds preferred inflation gauge for September, delayed due to the US government shutdown, will be the last key data before the FOMC meeting next week.

· Fed Comments: Remarks from Powell and Bowman, the latter being a more cautious member, will provide insights into the Feds recent division in stance.

If PCE confirms the soft trend shown in PPI and retail data, it will lock in the possibility of a December rate cut and exert significant pressure on the Dollar. Meanwhile, Chair Powells speech today remains a key focus for investors seeking the latest, most authoritative guidance on the December policy path.

Asset Outlook: Dollar, Gold & US Equities

1. US Dollar: Breakout Risk Ahead

The recent US dollar remains under pressure, especially with the 100-resistance level confirmed as a critical barrier.

USD Index, H4 Chart

Technically, the US Dollar Index has moved into consolidation after finding resistance near the 100.00 mark. A double top near 100 suggests rising selling pressure. The technical structure indicates that upside potential for the dollar remains uncertain after nearly two months of rally.

2. Gold: Bulls Taken Place

Gold continues to show bullish momentum, holding above $4,200 amid dollar weakness and rising easing expectations, marking a one-month high.

XAU/USD, H4 Chart

With bullish momentum building, the $4,200 level remains a key short-term support. Fundamentally, gold is likely to stay firm on easing expectations and a weaker dollar.

Technically, gold has recently formed an ascending triangle, which could signal a potential breakout if price confirms above the $4,200–$4,240 zone.

3. US Equities Outlook

The broader US equities market remains under focus this week. Chair Powells speech and remarks from other Fed officials are key drivers, with Fed rate-cut expectations continue to provide support. However, concerns over AI valuations and overall market overvaluation may persist, keeping investor sentiment closely tied to the near-term Fed outlook.

UT100, Monthly Chart

Despite the recent recovery, November price action in the Nasdaq 100 (UT100) shows a potentially concerning signal. A hanging man candlestick has formed on the monthly chart, which is typically seen as bearish, especially near a recent high.

UT100, Day Chart

On the daily chart, the Nasdaqs recent reclaim of the 25,000 level temporarily offsets bearish pressure. However, near-term upside may remain limited. Technically, 25,000 remains a decisive level: a sustained move above it suggests further upside, while failure to hold could lead to downside risk.

Overall, Fed rate-cut expectations continue to support the Nasdaq and broader US equities. Yet, sentiment-driven pressures may remain, particularly if the Fed does not signal a clear dovish path for 2026.

BoJ & Yen: Uncertainty Dominates

Another key focuses this week is the Japanese Yen and the Bank of Japan (BoJ).

Last week‘s November Tokyo Core CPI came in at 2.8%, exceeding market expectations and confirming that inflation remains sticky and well above the BoJ’s 2% target. This immediately intensified speculation that the BoJ may be forced to tighten sooner than the previously anticipated timeline (Spring 2026).

While the Tokyo CPI supports the case for near-term tightening, the BoJs governing board has consistently signalled patience, creating a clear conflict between market pricing (for a potential December/January rate hike) and official guidance.

The market cannot rely solely on Tokyo CPI; confirmation is needed from:

· Governor Uedas Comments: Any explicit reference to the need for raising real interest rates or a revised evaluation of wage growth. (Markets need more than a reiteration of “patience.”)

· Upcoming Data: The November National CPI and Tankan business sentiment survey will be critical in confirming the broader inflation trend across Japan.

This uncertainty keeps JPY volatility elevated. If the BoJ delays normalization, the Yen is likely to weaken; if it acts, a significant unwinding of the Yen Carry Trade could occur, causing the JPY to strengthen sharply.