Analysts expect rising energy prices to push headline CPI year over year from 3.4% to 3.7%, while core CPI month over month may slow from 0.3% to 0.2%. This combination is crucial.
Oil prices are pushing up headline inflation, while core inflation is cooling. If core inflation really does slow, that would suggest price pressures haven’t spread, strengthening the market’s expectation that rate hikes will be paused.
But officials aren’t backing down. On October 12, the president of the Cleveland Fed said clearly that inflationary pressures remain broad-based and that he supports further rate hikes. According to CME data, the market sees about a 79.5% chance that rates will remain unchanged in October. The sharp divide between officials’ hawkish stance and the market’s expectation of a pause is what will drive volatility tomorrow night.
If headline CPI comes in hot but core CPI cools, the market may lean toward expecting a pause, sending the dollar and Treasury yields lower and giving BTC a chance to rebound and test 83,500 to 84,500. If both headline and core CPI exceed expectations, the odds of an October rate hike will rise again, putting pressure on BTC. Support lies at 81,500 to 82,000; if that breaks, 80,000 is next.
BTC is currently around 82,000, up 0.8%. There are many buyers defending the 80,000 level, providing short-term support, but the direction is still unclear. Don’t bet heavily before tomorrow night’s data comes out. $BTC
#BTC #CPI #Cryptocurrency
Oil prices are pushing up headline inflation, while core inflation is cooling. If core inflation really does slow, that would suggest price pressures haven’t spread, strengthening the market’s expectation that rate hikes will be paused.
But officials aren’t backing down. On October 12, the president of the Cleveland Fed said clearly that inflationary pressures remain broad-based and that he supports further rate hikes. According to CME data, the market sees about a 79.5% chance that rates will remain unchanged in October. The sharp divide between officials’ hawkish stance and the market’s expectation of a pause is what will drive volatility tomorrow night.
If headline CPI comes in hot but core CPI cools, the market may lean toward expecting a pause, sending the dollar and Treasury yields lower and giving BTC a chance to rebound and test 83,500 to 84,500. If both headline and core CPI exceed expectations, the odds of an October rate hike will rise again, putting pressure on BTC. Support lies at 81,500 to 82,000; if that breaks, 80,000 is next.
BTC is currently around 82,000, up 0.8%. There are many buyers defending the 80,000 level, providing short-term support, but the direction is still unclear. Don’t bet heavily before tomorrow night’s data comes out. $BTC
#BTC #CPI #Cryptocurrency