Key developments for crypto - Trading Week from 31 October to 4 November
- 5 minute read
The price of BTC is up over 7% from a week ago. The ongoing correction of the US dollar index DXY provided a positive price development for the crypto sector. Elon Musk's acquisition of Twitter resulted in a sharp rise in Dogecoin's share price. The coin managed to rise 150% in five days.
This trading week, inflation and interest rate decisions from the US Federal Reserve (FED) and the Bank of England (BOE) are important developments to take into account.
Table of Contents
- Consumer prices in Europe on Monday morning
- US purchasing managers indices on display
- Federal Reserve interest rate decision and press conference
- The BOE's interest rate decision and the US service sector purchasing managers index.
- Labour market report and unemployment figures to close the week
Consumer prices in Europe on Monday morning
At 11am CET, the consumer price index (CPI) for the eurozone was published. Inflation was above expectations at 9.9% last month. At that time, inflation was expected to be 9.6%. For October, experts expect inflation of 10.2%. If inflation is again above expectations, the ECB will come under pressure at the next interest rate decision. A lower-than-expected CPI could trigger a positive price reaction in the crypto market.
US purchasing managers indices on display
This coming Tuesday, 1 November, investors are watching the release of the ISM manufacturing purchasing managers' index at 15:00 CET in the US. Experts expect a reading of 49.9 for the month of October. This would mean it will fall below expectations made a month earlier. In September, the index still showed a value of 50.9. Weak numbers can be positive for the crypto market, as weak numbers often have a negative effect on the US dollar exchange rate. So Tuesday could theoretically be an important day for Bitcoin and the altcoins.
Federal Reserve interest rate decision and press conference
The financial world is watching the Federal Reserve's interest rate decision at 19:00 CET on Wednesday 2 November. Market experts expect the Fed to raise the interest rate by 0.75% to 4.0%. The expectation is underpinned by the fact that core US inflation at +0.5% was again above the expectation of +0.4%. The Fed will therefore feel compelled to raise interest rates.
Interest rate hikes of 0.75% or higher could lead to a further sell-off in the stock market. How Bitcoin and the rest of the crypto market will react to this is hard to say.
The BOE's interest rate decision and the US service sector purchasing managers index.
Market experts watch the Bank of England's interest rate decisions on Thursday 3 November at 13:00 CET. Inflation is huge in the UK and again a rise of another 0.75% is expected.Should expectations come true, this could consolidate the US dollar index DXY in the short term. A huge volatility in the GBP-USD trading pair could be the effect.
Two hours later, the US Institute for Supply Management presents its results for the services sector purchasing managers index. A drop to 55.5 after a September reading of 56.9 is expected. The crypto market may benefit from this, as it usually has a negative effect on the US dollar exchange rate.
Labour market report and unemployment figures to close the week
On the last day of the trading week, the latest US non-vocational employment figures for the month of October will be published at 13:30 CET. The figures provide insight on the monthly change in the number of jobs minus the number of people employed in agriculture. Rising job growth is seen as an improvement in the labour market, which in turn leads to more consumer spending. However, negative numbers can lead to increasing problems in the labour market.
Falling job growth in turn results in falling consumer spending figures, which is negative for economic developments The forecast for the month of October is 200,000 jobs. Compared to the previous month (288,000), a further decline is expected for October. Should the forecast come true, this will have a negative impact on the US dollar. This in turn could be positive for the crypto market.
In the Fed's last meeting in December, declining figures have been factored in and the key interest rate may be lowered to avoid further stifling the labour market yet.
At the same time at 13:30 (CET), US October unemployment figures are also released. A small rise from 3.5% to 3.6% is expected. Despite an increase, the figures are still relatively low.