This will be important for Bitcoin and Co. in this week

Despite another 0.75 percentage point increase in interest rates by the US Federal Reserve and hawkish statements from Fed Chairman Powell in the middle of the week, as a result of which the US stock indices fell significantly, the key crypto currency Bitcoin (BTC), the psychological price tag of 20,000 Defend USD again. Bitcoin ended the week’s final trading day on the classic financial market at a new seven-week high of $21,478, rising in value in opposition to tech heavyweights Amazon, Apple and Alphabet, which all fell six percentage points in value. Although the BTC price also consolidated back below USD 21,000 shortly before the week on Sunday evening, the previous weeks outperformance continues so far. Meanwhile, a new stress test for Bitcoin and the crypto market as a whole threatens a threatened sale of FTX coins (FTT) from billionaire and FTX founder Sam Bankman Fried’s FTX exchange by competitor CZ, the founder of Binance, announced late Sunday evening, November 6, that the world’s largest crypto exchange would divest its entire holdings of FTT coins. As a result, the entire crypto market turned south in an initial reaction, and there was increased profit-taking for some altcoins. The reason for this sudden selling decision by Binance can be found in the recent regulatory proposals of the FTX founder’s DeFi sector, which triggered clear criticism from competitors.

Mid-term elections in the US in focus for investors

Tuesday, November 8, 2022: In this trading week, which has little economic data from the classic financial market, investors are primarily looking at the US midterm elections this week. In addition to the House of Representatives, 30 percent of the Senate will be re-elected. Should US President Joe Biden’s Democrats suffer an electoral defeat here, there is a risk of two years of political deadlock due to the Republicans’ blockade policy, as was the case during Barack Obama’s second term in office. Urgently needed reforms, such as the change in energy policy, are likely to be short-lived. Biden could then only enforce any changes to the law by decree. Since the US stock market has historically been able to rise much stronger when the Republicans were in power, paradoxically, US investors should nevertheless take a positive initial reaction to a possible defeat for the Democrats.

Consumer prices in China midweek

Wednesday 9 November 2022: At 02:30 (CET), the People’s Republic will publish updated inflation data for the month of October. In a monthly comparison compared to September, a small increase in consumer prices is expected from 0.3 percent to 0.4 percent. Should consumer prices in China again exceed forecasts, the Chinese central bank PBOC will also have to consider raising the key interest rate. However, since the representatives of the Middle Kingdom are reluctant to let their maps be seen, the figures presented should be treated with caution. Going forward, further increases in consumer prices should also put the PBOC under further pressure to act.

CPI consumer price index provides new insight into US inflation

Wednesday 9 November: At 14:30 (CET) the US Bureau of Labor Statistics publishes the latest inflation data for the latest month of October. Compared to September, the core rate, which does not take energy and food prices into account, is expected to fall slightly by 0.6 percentage points to 0.5 percent. For the same period, experts expect the consumer price index including energy and food to rise from 0.4 percent in September to 0.7 percent in October. If market analysts’ forecasts are confirmed, the US central bank will have to take further steps since it made its last interest rate decision in December. As a result, the US dollar should continue to gain strength and generate additional selling pressure in the stock market and thus possibly in the crypto sector as well. However, a lower-than-expected increase should ease pressure on these asset classes and give the Fed more leeway when it comes to interest rate decisions in December. The experts have recently paid less attention to the comparative figures for the previous year, as these can be distorting due to the significant increase in inflation in October and November of the previous year and reflect the development of consumer prices less accurately.

US consumer confidence at the end of the week

Friday 11 November: At 16:00 (CET), market participants finally look at the University of Michigan’s latest forecasts for US household consumer confidence for the month of November. Consumer confidence reflects the level of consumer optimism about economic development in the United States. When it was last released in late October, household confidence was at 56.2. For the first forecast this November, the expert estimate of 56.0 is slightly below the final figures for the previous month. If November’s initial consumer confidence figures come in above assumed estimates after stabilizing at last published values, the US dollar should be able to benefit from an initial reaction and appreciation. As before, this could have a negative effect on the stock market and Bitcoin price. However, if consumer confidence falls back below the expected level of 56.0, it could have a stabilizing effect on stocks and cryptocurrencies.

On the other hand, declining job growth has a negative impact on future consumption and further exacerbates the economic slowdown. The forecast for the month of October is 200,000 employees. Compared to the previous month (288,000), the forecasts for October are further down. Weak NFP figures may reinforce the US dollar correction, which should have a stabilizing effect on the Bitcoin price. In addition, the Fed could take this into account at the last central bank meeting in December and possibly raise the policy rate less sharply

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