• Crypto investors must watch out for the economic and financial data scheduled to be released this week.
• Crypto traders should expect a further sell-off in the market should the fed increase rates aggressively as it did last month.

As in the week before, the Bitcoin price and the US stock indices were bullish again and ended the trading week within the range of their weekly highs. In the current trading week, the market players will primarily look at the inflation figures in the Eurozone this Monday morning and the critical interest rate decisions of the US Federal Reserve (FED) and the Bank of England (BOE) in the middle of the week.

Consumer price index data for Europe

The trading week starts with the release of the consumer price index (CPI) for the eurozone. After the inflation rate of 9.9 percent in the previous month, which was above the expectation of 9.6 percent, experts expect an inflation rate of 10.2 percentage points for the trading month of October. If consumer prices continue to be above the forecasts, the ECB (European Central Bank) will be under pressure to decide its next interest rate.

However, if the consumer price index turns out to be lower than forecast, at least an initial bullish reaction on the stock and crypto market is possible. Nevertheless, the pressure on the ECB will likely remain high.

US purchasing managers’ indices in focus

On Tuesday, investors will look to the release of the ISM Manufacturing Purchasing Managers’ Index (PMI) for the US. The analysts forecast a value of 49.9 for the final figures in October. Again, the expectations are below those of the previous month. In September, the index still showed a value of 50.9. Another weak purchasing manager indices would be positive for Bitcoin and the crypto market. Usually, a strong PMI hurts the exchange rate of the US dollar. As a result, the crypto sector could continue to gain ground on Tuesday. Whether the Fed will then deviate from its rumored interest rate hike of 0.75 percent will become apparent at the Fed meeting on the following day.

Interest rate decision and press conference by the US Federal Reserve

On Wednesday, the financial world would watch out for the interest rate decision by the Federal Reserve Bank. Market experts expect the US monetary authorities to raise the base rate by 75 basis points to 4.0 percent. Moreover, since the US core inflation rate published last Friday at +0.5 percent month-on-month was again above analysts’ expectations of +0.4 percent, the Fed will likely be forced to raise interest rates significantly.

Should the interest rate step amount to 75 basis points or more, as was the case with the last interest rate adjustment in September, investors, and traders should expect a further sell-off in the stock market. However, predicting how the crypto market will react to this Fed decision is difficult.

Although the DXY is likely to be bullish in an initial reaction, the resilience of the crypto sector over the past few weeks gives at least some hope. Another unknown is the midterm elections in the USA on 8 November.

Should Fed boss Jerome Powell raise interest rates by 50 basis points, a price rally in the financial markets cannot be ruled out. Investors will pay particular attention to the subsequent press conference at 7:30 p.m. (CET).

BOE interest rate decision and US purchasing managers’ index in the service sector

On Thursday, 3 November, market participants will first look to London as The BoE announces its latest rate hike. With inflation in the UK in double digits, analysts expect it to rise by a further 0.75 percent.

At 3:00 p.m. (CET) on the same day, the Institute for Supply Management in the USA will present the purchasing managers’ index data for the service sector. Here, market experts forecast a fall back to 55.4 after a value of 56.9 in September. Bitcoin and other cryptocurrencies could benefit from a weaker purchasing managers’ index, as it usually negatively impacts the US dollar exchange rate.

Labor market report and unemployment figures at the end of the week

On Friday, 4 November, the last day of the first week of trading, the latest non-farm payrolls (NFP) figures for the US for October will be presented. The NFP data describes the monthly change in the number of employees minus the number of employees in agriculture.

Increasing job growth indicates an improvement in the labor market and the associated increase in consumer spending. On the other hand, if the job growth rate declines, it indicates increasing problems in the labor market. Weak NFP numbers could amplify the US dollar correction, which should stabilize the Bitcoin price.

In addition, the Fed could consider this at the last central bank meeting in December. Hence, it could increase the critical interest rate less sharply to avoid further choking off the labor market. Also, at 13:30 (CET), the unemployment rate for the USA for October will be announced.