A true barometer of risky markets for weeks, inflation has fallen more in the United States. Which allowed Bitcoin to jump above $18,000. More generally, the news boosts all risk markets.
US inflation is falling more sharply than expected!
Announced at 7.3%, US inflation over the last 12 months was only 7.1%. In the land of Uncle Sam, these figures can validating a fifth consecutive month of decline after the peak reached last June (9.1%). A level not seen in 40 years. Even better, since October, the rate of decline appears to be accelerating to fall from 8.2 to 7.7% between September and October and from 7.7% to 7.1% between October and November. This is also the lowest percentage seen since December 2021.
Good to know: These details are those of the CPI indexan index that measures changes in the price of goods and services consumed by households.
If we consider inflation over a rolling month, the prices of goods and services increased by 0.1% between October and November 2022. Between September and October, the increase was much higher (+0.4%).
A strong influence on the crypto market!
For Bitcoin and the rest of the crypto market, it didn’t take long to jump. As not once customized, the publication of the inflation figures allowed the crypto market to take its shoot volatility. As soon as the figures were announced, Bitcoin broke the $18,000 mark, before correcting down a bit. Anyway, in the last 24 hours, the mother of cryptocurrencies is up 4.8%. Same observation for Ethereum which shows an increase of more than 6%. The main altcoins are showing increases between 3 and 8% on this 24 hour horizon.
In a crisis since yesterday after the opening of an investigation by the American justice system, the BNB also benefited from the rise. Binance ecosystem token has recovered almost all losses suffered the previous day. According to data from the Coinmarketcap platform, the crypto market has grown between 3 and 4% in recent times. To flirt again with the 900 billion dollars capitalized. Many believe that “Christmas effect” could allow the markets to go back above the symbolic threshold of 1,000 billion.
On the stock market, the news also made its way. The S&P 500 rose nearly 2% at the open, well emulated by the Nasdaq 100 (+2.85%) and the Dow Jones (+1.15%). In Europe, the news was also greeted with enthusiasm. The CAC 40 thus rose by 2.32% and the German DAX showed an increase of similar proportions (+2.28%)
Approaching the FED meeting tomorrow!
As mentioned earlier this week, the economic calendar is very busy this week. Tomorrow, the markets will turn to the announcements of the FED and the speech of its director general Jérôme Powell.
But the publication of the figures appears to be hopeful and has reassured the market and economic actors. While 75% thought the next US central bank rate hike would be limited to 50 basis points, 80% now consider this the most likely outcome. It is also a safe bet that that percentage will increase by tomorrow’s meeting.
A study of future contracts also suggests an increase of 25 basis points for The next FOMC meeting is scheduled for February 1st. In fact, the consensus shows that this outcome is the most likely (58%). But beware, because the FED instead relies on the CTP index to gauge the power of inflation. The figures for this indicator are due to be published on 23 December.