The key developments around crypto and Bitcoin in the trading week from 10 to 14 October
- 5 minute read
In the past trading week, we saw Bitcoin recover, followed by a sharp fall on Friday. Investors in the crypto world should keep a close eye on this economic and financial data in the current trading week.
Table of Content
- Review of last week
- Fed rate hike: up to 0.75 per cent more interest rate?
- US producer price index (PPI) and FOMC meeting minutes midweek
- CPI Consumer Price Index gives new insight into US inflation
- New US retail sales figures to close the week
- Consumer confidence falls
Review of last week
In the past trading week, we saw that the crypto world was in the process of recovery. We also saw the rise in the stock market. The cause: the consolidation of the US dollar index DXY. Technology stocks in particular rose sharply, pulling the crypto sector with them. We then saw the crypto and equity markets fall after the US economic figures were released. The figures were better than expected, so we saw a sell-off in the stock market. The crypto market followed suit. In particular, figures on new jobs in the US and a sharp drop in the US unemployment rate from 3.7% to 3.5% caused prices to fall.
Enough about last week. The following topics are important for crypto this week:
- FED rate hike
- US producer price index (PPI)
- Consumer Price Index (CPI) gives new insight into US inflation
- Consumer confidence drops
Fed rate hike: up to 0.75 per cent more interest rate?
According to analysts' expectations, the interest rate hike will rise from 0.50% to 0.75% within two trading days. The interest rate step is taken by the Fed to curb inflation and ensure price stability. In addition, OPEC+ (the main producers of oil) announced that crude oil barrel production will be cut by 2 million a day. This has rekindled investor concerns, as it means high petrol and diesel prices will continue.
This makes the price stability of the crypto world very noteworthy at the moment and disappointing US inflation data may cause a clear bullish price reaction.
US producer price index (PPI) and FOMC meeting minutes midweek
Wednesday 12 October is an important day for crypto, as the producer price index (PPI) for the month of September is due to be published. Experts expect an increase of 0.2% compared to August. In August, the PPI fell 0.1% compared to July. This means that producer prices fell then, but now producer costs are expected to rise. These prices will eventually be passed on to consumers. In addition, producers face rising import prices for industrial raw materials and materials. This exacerbates inflation on the producer side.
Should the producer price index be better than expected, this would be positive for the US dollar against the euro. A continued strong dollar could lead to more selling pressure in the US equity and crypto markets.
Investors hope to gain more insight into possible monetary policy measures after the US Federal Reserve (the main central bank) publishes the minutes of the FOMC meeting at 20.00 (CET). This covers the last Fed meeting in September, where they discussed the interest rate decision for early November.
CPI Consumer Price Index gives new insight into US inflation
This Thursday, 13 October at 14:30 (CET), the latest consumer price index (CPI) for the month of September will be published, by the US Bureau of Labor Statistics. August still saw the CPI correct from 8.5% to 8.3%. This was less than expected, as experts had expected a drop to 8.1%. The crypto world may create a bullish price reaction if US inflation can still reach, or better yet exceed, 8.1%. If the CPI rises more than expected, another difficult week could arrive for the stock and crypto markets.
New US retail sales figures to close the week
To close the trading week, US retail sales for the month of September will be released on Friday, October 14 at 14:30 (CET). The figures are considered an important gauge to estimate consumer confidence. Recently, US retail sales remained slightly positive, just above the threshold of 0. So far, we have seen private household spending restraint. Market experts expect the September retail sales figure to fall from 0.3% to 0.2%. Should the decline be even firmer, the pressure on the Fed could intensify. We have seen in the past that disappointing economic data has a negative effect on the US dollar, which in turn has a positive effect on the crypto market.
Consumer confidence falls
The University of Michigan updated US consumer confidence figures. Consumer confidence is considered a measure of optimism about the US economy. In the previous month of September, consumer confidence stood at 58.6, below the 60.0 expected for September. Should consumer confidence move higher than the expected 59.0, the strength of the US dollar is likely to increase. As in recent times, this could again have a negative impact on the stock and crypto markets. Should the figures disappoint, this could again have a positive effect on the stock and crypto markets.