My Dear Readers!
Last week's non-farm payrolls report was weaker than expected. Additionally, the previous two months' job numbers were revised downward, revealing that the U.S. labor market was not as strong as previously believed. This increased expectations for rate cuts later in the month, but also signaled that the economy might be weaker than anticipated.
Quiet Start to the Week
The first half of this week is relatively quiet on the economic news front. The U.S. presidential debate on Tuesday, the 10th, is a notable event, though not directly market-related. More significant news expected later in the week with the release of CPI, PPI, and other key economic indicators.
Political Influence on the Market
The presidential debate is expected to touch on economic issues. The candidates' responses could have caused market volatility the next day. With a rate decision approaching and elections on the horizon, the debate had the potential to influence trading sentiment in the cryptomarket.
CPI and Market Reactions
The Consumer Price Index (CPI) is the first major economic release of the week, scheduled for Wednesday before the market opened. Given the anticipated rate cuts, a cooler-than-expected CPI could have led to market gains, reinforcing expectations for rate cuts. On the other hand, a hotter-than-expected CPI will trigger some selling, though it was likely to be short-lived due to the upcoming Federal Reserve meeting.
PPI Impact
Following the CPI, the Producer Price Index (PPI) is released on Thursday. Like the CPI, a cooler-than-expected PPI could have spurred market buying. Any selling due to a higher-than-expected PPI might have been muted by hopes for a Fed rate cut later in the month. Both PPI and CPI measure inflation's rate of change, so positive numbers still indicate rising prices, though at a slower pace.
Market Outlook
As the week unfolds, these economic indicators were closely watched, setting the tone for market movements. The combination of a weaker labor market, expected rate cuts, and key economic data created an uncertain but potentially volatile trading environment.
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