Top 5 Market Catalysts That Could Move Stocks and Crypto This Week

Source Beincrypto

Two weeks ago, the Federal Reserve raised interest rates. This week, five data releases will show whether it does it again in October.

The Fed’s chair says single numbers should not drive policy. Traders are still pricing the next move off this week’s data.

The Fed Raised Rates and Refused to Signal Its Next Move

On September 16, the Fed lifted its benchmark rate to a range of 3.75% to 4%. Inflation “remains elevated,” the policy statement said.

In June, BeInCrypto reported that Bank of America expected three Fed rate hikes this year, starting in September.

At his press conference, Chair Kevin Warsh refused to promise a second hike.

“Trends matter. Data points are noisy. Data point dependence is a dangerous preoccupation.”

Rate traders price roughly a 64% chance of another hike on October 28.

Target Rate Probabilities for October 28 Meeting. Source: CME FedWatch ToolTarget Rate Probabilities for October 28 Meeting. Source: CME FedWatch Tool

Higher rates make savings and bonds pay more. That pulls money away from riskier bets like tech stocks and Bitcoin (BTC). Right now, Bitcoin trades near $84,728, according to BeInCrypto data.

1. Monday, Bank of Japan Minutes

The Bank of Japan (BOJ) publishes the minutes of its July 30 to 31 meeting on Monday morning, Japan time, its calendar shows.

Minutes are the written record of what board members argued. These cover the meeting between two hikes. The BOJ raised its rate to about 1% in June, then to about 1.25% on September 18.

The bank’s September statement said it “will continue to raise the policy interest rate.” Japan’s rate still sits more than 2.5 percentage points below the Fed’s. Signs of faster hikes in Tokyo would narrow that gap, which can ripple through global bond markets.

Assets in play. Japanese government bonds, the yen, US Treasury yields, and Bitcoin.

2. Wednesday, PCE Inflation

The Personal Consumption Expenditures (PCE) index is the inflation number the Fed trusts most. It also tracks how much Americans spend. Its “core” version drops volatile food and energy prices.

Core PCE rose 3.3% in the year to July, the Bureau of Economic Analysis (BEA) said. August’s reading is forecast at 3.4%. The Fed’s target is 2%.

Spending is forecast to climb 0.5% in August. That would be the biggest monthly jump in over a year.

Assets in play. Treasury yields, the US dollar, the S&P 500, the Nasdaq, and Bitcoin.

3. Wednesday, GDP

The same morning, the BEA publishes its third and final estimate of second-quarter growth. Gross domestic product (GDP) measures everything the economy produces.

The second estimate showed growth of 1.5% at an annual rate, down from 2.1% in the first quarter, BEA data shows. A stronger revision would give the Fed more room to keep rates high.

Assets in play. Treasury yields, the US dollar, and the S&P 500.

4. Thursday, ISM Manufacturing Index

The Institute for Supply Management (ISM) surveys factory purchasing managers every month. A reading above 50 means manufacturing is growing.

August’s index came in at 54.6, down from 55.6 in July, ISM said. Its prices gauge held at 71.1, meaning factories are still paying more.

Assets in play. Industrial stocks, Treasury yields, the US dollar, and oil.

5. Friday, Payrolls

The week ends with the September jobs report. Forecasters expect about 90,000 new jobs, down from 162,000 in August. Unemployment is seen steady at 4.1%.

Hourly wages rose 0.3% in August, Bureau of Labor Statistics data shows. A strong report would show a resilient labor market and support the case for higher rates.

Bitcoin jumped after June’s weak jobs report, BeInCrypto reported.

Assets in play. Treasury yields, the US dollar, the S&P 500, the Nasdaq, gold, and Bitcoin.

What the Week Means for Treasury Yields

Together, these releases feed the Fed’s October 27 to 28 decision. They also set up the next big move in US Treasury yields, the interest rates the government pays to borrow.

The 10-year yield recently retreated from a 19-year high, BeInCrypto reported. By Friday night, the Fed will have its evidence. Whether it acts on it is the question Warsh has refused to answer.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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