Big week for Crypto as markets tank ahead of Fed rate decision

The US central bank is expected to start cutting interest rates this week. However, uncertainty remains as to whether it will opt for a small or large reduction.

Interest rate decisions are also due in the UK, Brazil, Norway, Turkey and South Africa. The Japanese and Chinese central banks also take center stage as announcements are expected along with decisions in Taiwan and Indonesia.

Meanwhile, crypto markets have already started to pull back hard on Monday morning, wiping out the weekend’s gains.

Economic events from September 16 to 20

Tuesday will see the retail sales report for August, which provides data on how much money consumers spend on various durable and non-durable goods.

This provides insight into consumer spending and provides a leading indicator of economic growth in the current quarter, in addition to inflationary factors.

The Industrial Production report for August will also be released on Tuesday. This information reveals the output volume of US industries such as manufacturing, mining and utilities. Although it is a much smaller portion of economic activity than services, it can still be a leading performance indicator.

The much-anticipated Federal Reserve interest rate decision and press conference is on Wednesday, September 18.

The CME Fed Watch tool currently has a 41% chance of a rate cut of 25 basis points and a 59% chance of a larger cut of 50 basis points, which could reduce rates by around 5% from the current 5.5%.

Key events this week:

1. August retail sales data – Tuesday

2. August building permit data – Wednesday

3. Fed Interest Rate Decision – Wednesday

4. Fed press conference – Wednesday

5. Philly Fed Manufacturing Index – Thursday

6. August Existing home sales data – Thursday…

— Kobeissi Letter (@KobeissiLetter) September 15, 2024

The head of financial markets strategy at Westpac Banking Corp. in Australia, Martin Whetton told Bloomberg: “At the very least, a modest cut should be expected given the data series and the policy starting point, and that should justify forward market pricing. .”

Asian markets opened cautiously on Monday morning ahead of this week’s series of data and central bank decisions that could shape the direction of markets for the rest of the year and into early 2025.

Crypto market outlook

Crypto markets fell again on Monday morning, with total market capitalization down 4.3% to $2.12 trillion, wiping out all of the weekend’s gains.

Bitcoin fell 3%, falling from above $60,000 on Sunday to below $58,500 on Monday morning. It is likely to continue, returning to support at the $58,000 level.

Ethereum was hit even harder, falling 6% to $2,275 at the time of writing, its lowest level in more than a week.

Altcoins were playing with their usual lemming tactics, following suit and pitching even harder with a sea of ​​red engulfing the top twenty cryptocurrencies.

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