The current market logic is actually quite clear: the main focus remains on the December rate cut expectations. Risk asset sentiment is indeed somewhat optimistic, but the momentum from the earlier rate cut benefits has mostly been exhausted, and now new data is urgently needed to give the market a boost.

Tonight at 23:00 Beijing time, the September PCE data will be released, marking a key point. Several indicators to watch: PCE annual rate expected at 2.9%, unchanged from the previous value; PCE monthly rate at 0.3%, noticeably lower than the previous; income monthly rate at 0.3%, slightly below the previous; and expenditure monthly rate at only 0.1%, significantly lower than the previous.

If the data meets expectations, it can generally be interpreted as September inflation still sticky but with clearly slowed pressure. Slowing wage growth and declining consumer capacity—these signals are actually positive for rate cuts. In other words, the lower the inflation, the more room for policy maneuvering; the weaker the consumption data, the more justified the central bank’s easing stance.

If this set of data performs even better, expectations for rapid rate easing could continue to heat up. However, the current issue is that US stocks, after rebounding to high levels, are starting to hesitate, as they are just a small distance from all-time highs, and traders’ sentiment has become particularly cautious. At this point, data is especially needed to break the deadlock.

Bitcoin’s recent pullback is actually closely related to the US stock market’s indecision. Frankly, the watershed for tonight’s market is at that 23:00 data release. According to CME probability data, the market assigns an 87.2% high probability to a December rate cut, but whether this expectation can truly drive subsequent trends depends on whether this set of PCE data can meet market psychological expectations.