On Tuesday, November 10, at 16:30 MSK, the US will publish October inflation data. Economists expect an acceleration to 3.9%. The same week brings earnings from AI equipment makers on Thursday and producer prices on Friday.
What these numbers are. CPI is the average price level for goods and services for the population. PPI is the prices at the output of businesses themselves. Based on these, the market calculates whether the Fed will raise the rate in December.
Why this matters to a trader. Both crypto and tech stocks are already sliding ahead of these three data blocks. BTC is trading around $74,322, down 1.85% over the day.
What will inflation show?
The data is released by the US Bureau of Labor Statistics (BLS). The economists' forecast is cited by Associated Press.
- 3.9% - expected annual inflation for October
- 3.7% - the September figure
- above 3% - inflation has held since March
Why have the odds of a hike risen?
- September. The Fed raised the rate for the first time in three years.
- October 28. The 3.75-4.00% range was left unchanged.
- Friday's jobs report. It came in strong, and the market recalculated December.
- The result. The probability of a quarter-point hike at the December 9 meeting, per CME FedWatch, rose to 80.5% from 70.7% a week earlier.
CME FedWatch is a service that calculates the odds from rate futures. The meeting itself is in the economic calendar.
What is pressuring BTC besides the rate?
The second source of pressure is tech stocks. The Nasdaq Composite entered correction territory on November 5. Since the start of the month, the index has lost 5.52% on the decline in chipmaker shares.
- CoreWeave - the cloud provider's report comes out after the close on Tuesday, options price in a share move of up to 20.7%
- Cisco - report on November 12, quarterly revenue forecast of $18-18.2 billion
- Applied Materials - report on November 12, forecast of $10.25 billion with a $500 million margin, conference call at 00:30 MSK
What does this mean for a trader?
- Scenario A: 3.9% or higher. The Fed's hard line toward December is confirmed. Ranges on the dollar, gold, BTC and indices widen.
- Scenario B: the figure comes in below forecast. December odds will be recalculated quickly, and the move will be just as sharp, only in the opposite direction.
The main thing: in both scenarios the market moves wider than usual, and stops get hit more often. For a week like this, it's easier to pick your instrument and size in the calculator.
What's next?
The week doesn't end on Tuesday. After CPI, the market gets two more data points.
- November 13 - PPI, the producer price index
- December 9 - the Fed meeting, where they decide on the quarter point
Waiting for Tuesday with a position in BTC?
Weeks like this are recognizable right away. You hold a position and you're counting dollars now, not percentages. A 4% move in BTC on a two-thousand-dollar account gives you eighty dollars, even if you guessed inflation to the tenth. In prop trading, the trading notional is provided by the company: you pay for the selection, work within its loss limits, and take a share of the profit under the contract. There's time before Tuesday to work out how this scheme is structured.