Market Compass
After Difficult Days…
After the sharp losses in digital asset prices on the night of October 10, the market entered a period of seeking equilibrium. During this process, the closed US government (despite which inflation data was still released), geopolitical developments, and news flow regarding the trade war continued to be the key determinants of pricing behavior. In addition to these, next week, following September inflation data that fell short of expectations, decisions from the US Federal Reserve’s (FED) Federal Open Market Committee (FOMC) will also be added, and we will continue to closely monitor these developments.
The meeting between the US President and the Chinese leader, expected to take place at the Asia-Pacific Economic Cooperation (APEC) forum in South Korea (unless we see another Trump maneuver), will be one of the main items on the agenda. For now, this meeting is said to be taking place on October 30. This summit, which has the potential to end the long-running war that has deeply affected global economic and commercial life, will be a decisive development in determining the direction of asset prices.
The day before, we will learn the results of the FOMC meeting, which will last two days and conclude on October 29. This will also be under our microscope, as it will be a very important variable in the equation regarding the tightness of the global financial ecosystem in the coming period. Alongside these two critical developments, there could have been a heavy set of data coming from the US, but as mentioned later in our report, the US government shutdown continues to be an obstacle to the release of this important data. Therefore, we will continue to closely monitor developments regarding the US government shutdown next week, which, in addition to its many negative consequences, is also hindering the release of data.
The Market Needs to Turn a Critical Corner
The last days of October could be quite eventful. The reason for this, as mentioned, is the Trump-Xi meeting and the FOMC decisions. Following these two critical developments, which have long driven price changes in capital markets, we may have gained vital insights into how November (and even a longer investment horizon) will unfold. This situation could signal the start of a new rally in digital assets or the continuation of a challenging, troubled period. Therefore, it would not be wrong to say that these developments, which could shed light on the path cryptocurrencies will take, will lead the markets to a significant turning point.
October 29 – FOMC Statement
The US Federal Reserve (FED) will hold its seventh Federal Open Market Committee (FOMC) meeting of the year on October 28-29, and the decisions taken will be announced on October 29. The FOMC is expected to cut its policy interest rate by 25 basis points (according to the CME FedWatch Tool at the time of writing this report), and the decisions, justifications, and statements made will be of critical importance to global markets.
On October 29, investors will be looking for clues in the FOMC’s statements that could signal a major shift in market expectations. First, they will look to see if the interest rate is cut by 25 basis points as predicted. Half an hour after the decision and statement are released, Fed Chair Powell will take the podium for a press conference.
1-Will interest rates be cut?
As mentioned, following recent developments and statements by FOMC members, a 25 basis point interest rate cut is expected from the Committee. A surprise decision could be not to cut rates, which we see as a low probability. We consider an interest rate hike decision to be out of the question. If the policy rate is lowered by 25 basis points as expected, we do not expect this to lead to a new pricing in the markets. If the rate is kept unchanged, we can say that this could lead to gains in the dollar and losses in digital assets.
2-Powell’s Press Conference
Following every FOMC meeting, as is the case half an hour after the decisions are announced, Fed Chairman Jerome H. Powell will speak at a press conference on October 29. Powell will first read the decision text and explain the rationale behind the decisions taken. This will be followed by a question-and-answer session with the press. Volatility in the markets may increase slightly during this section.
We do not expect a major change in the stance Powell has taken in his recent speeches. The Chairman recently made statements acknowledging the deterioration in the labor market but emphasizing that interest rate cuts are not pre-determined decisions and that they will make data-driven decisions. Of course, the importance of the Chairman’s speech will depend on what the decision on interest rates is. Following a decision in line with expectations, attention will shift to Powell for clues on whether interest rates will be cut at the next meeting. However, if there is a surprise decision to keep rates unchanged, assessments of the reasons behind this will be closely followed.
If Powell takes a more hawkish stance than before in response to questions from the press, it could reinforce expectations and pricing that the Fed will not rush to continue interest rate cuts. This could have a somewhat negative impact on digital assets. However, his assessments regarding both inflation and the labor market, along with his mention of the necessity for a new interest rate cut, could increase risk appetite, which may have positive effects on cryptocurrencies.
Other Key Macroeconomic Indicators and Developments
October 27 – US Durable Goods Orders shows the change in the total value of new purchase orders placed with manufacturers for durable goods. This data is usually revised with the Factory Orders report released about a week later and “Durable Goods” are defined as products that last longer than 3 years, such as automobiles, computers, appliances, and airplanes. It is a leading indicator of production and provides a preliminary indication of the economy’s vitality. Core Durable Goods Orders shows the change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items. This dataset has been shown to have complex effects on the value of digital assets.
October 28 – US CB Consumer Confidence; It is the result of a survey of approximately 3,000 individual consumers asking respondents to assess the relative level of current and future economic conditions. It measures financial confidence as a leading indicator of consumer spending, which accounts for a large share of overall economic activity. It is published monthly, on the last Tuesday of the current month.
October 30 – Trump-Xi Meeting: Unless there is a change, US President Trump and Chinese leader Xi are expected to meet in South Korea. Any steps taken and statements made regarding trade tensions will be significant for global markets. Asia-Pacific Economic Cooperation (APEC) is a forum that promotes economic cooperation in the Asia-Pacific region. As part of APEC Economic Leaders’ Week (AELW), Trump and Xi are expected to hold a meeting.
Dates and key events:
- October 27–28: CSOM — Senior Bureaucrats’ Meeting
- October 29–30: AMM — Ministers’ Meeting
- October 31–November 1: AELM — Leaders’ Summit
Approximately 200 different levels of meetings, working groups, and cross-sector forums will be held prior to the summit. APEC member economies represent approximately 40 percent of the world’s population, about half of world trade, and a large portion of global GDP.
**October 30 – US Advance GDP: Click here to review our assessment on this topic.
**October 31 – US PCE Price Index: Click here to review our assessment on this topic.
October 31 – US Bitcoin Futures Expiration; Options expiring on futures contracts with the same expiration date typically expire on the last Friday of the current month on the CME. Trading volume and price volatility may increase in the days leading up to the expiration of these contracts.
**Important Notice Regarding US Data
Due to the current US government shutdown, the release of several key economic data from the agencies has been impacted. Data from the Bureau of Economic Analysis (BEA), Bureau of Labor Statistics (BLS), Census Bureau, and the United States Department of Agriculture (USDA) may be delayed or postponed. Affected data may include, but is not limited to, the Employment Situation Report, Gross Domestic Product (GDP), Consumer Price Index (CPI), and Agricultural reports.
Important Economic Calendar Data
Click here to view the weekly Darkex Crypto and Economy Calendar.
Information
*The calendar is based on UTC (Coordinated Universal Time) time zone. The calendar content on the relevant page is obtained from reliable data providers. The news in the calendar content, the date and time of the announcement of the news, possible changes in the previous, expectations and announced figures are provided by the data provider institutions.
Darkex cannot be held responsible for any changes arising from similar situations. You can also check the Darkex Calendar page or the economic calendar section in the daily reports for possible changes in the content and timing of data releases.
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