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With a September Federal Reserve rate cut all but certain, options traders are widely betting on a stable stock market ahead of Thursdays CPI data. However, this bet could be risky if the data shows rising inflation. The markets rationale for a rate cut is straightforward: US job growth is stagnant and the economy needs stimulus. Fridays weak jobs data reinforced this expectation, prompting investors to fully price in a 25 basis point rate cut from the Fed next week. The markets reaction has been muted: US stocks fell slightly on Friday, and the fear gauge edged up slightly, but remains well below the critical 20 level, where it has mostly remained since June. Looking ahead, options traders are betting on a roughly 0.7% two-way move in the S&P 500 following Thursdays CPI release, below the 1% average realized move over the past year. However, this trade ignores a key risk: what if inflation figures significantly exceed expectations? "Its a very delicate balance right now," said Eric Teal, chief investment officer of Comerica Wealth Management. "Any data thats very positive or very negative could change the market outlook."On September 7, U.S. Treasury Secretary Jeffrey Bessant stated that the United States and Europe are discussing a new round of sanctions and secondary tariffs against Russia, hoping that the "collapse" of the Russian economy will prompt Putin to engage in peace talks with Ukraine. "We are ready to increase pressure on Russia, but we need the cooperation of our European partners," Bessant said. He also stated that President Trump and Vice President Cyril Vance spoke with European Commission President Ursula von der Leyen on Friday, and that von der Leyen subsequently discussed sanctions with Bessant.Israel Airports Authority: The first flight from Ramon Airport to Tel Aviv will take off soon.Russian Deputy Prime Minister Novak: OPEC+s production increase plan is beneficial to the Russian economy.Russian Deputy Prime Minister Novak: OPEC+ will make monthly production decisions based on market conditions.

ETH Faces the Risk of Sub-$1,600 on US Stats and Hawkish Fed Chatter

Cory Russell

Mar 03, 2023 14:16

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On Wednesday, Ethereum (ETH) increased by 3.74%. ETH finished the day at $1,665, reversing a loss of 1.71% from Tuesday.


ETH dropped to an early bottom of $1,595 following a negative start to the day. While avoiding the First Significant Support Line (S1) at $1,585, ETH surged to a high of $1,670 in the early afternoon.


ETH quickly passed through the Second Major Resistance Level (R2) at $1,668 before relaxing back to finish the day at $1,665. ETH also broke through the First Major Resistance Level (R1) at $1,636.


Bitcoin (BTC) increased by 2.44% on Wednesday. Bitcoin finished the day at $23,707, reversing a drop of 1.53% from Tuesday. Bitcoin returned to the $24,000 mark for the first time in five days thanks to the positive session.


Bitcoin dropped to an early low of $23,036 after the day got off to a muddled start. Bitcoin climbed past the First Significant Support Line (S1) at $22,934 and reached a peak of $24,009 in the late morning. Before finishing the day at $23,707, Bitcoin momentarily passed through the Second Major Resistance Level (R2) at $23,823 and the First Major Resistance Level (R1) at $23,483.

Chinese economic data and the Shapella upgrade provide support

On Wednesday, the seamless Shapella update and mining influx helped to sustain the price of ETH. However, the Wednesday breakthrough was motivated by the world economic schedule.


On Wednesday, statistics from China provided support for risky commodities. The crucial Caixin Manufacturing PMI increased in February from 49.2 to 51.6. Analysts anticipated an increase to 50.2. An important development was the industrial sector's first expansion since July 2022.


The statistics were strong enough to overpower the impact of NASDAQ Composite Index and US economic data.


The ISM Manufacturing PMI survey's auxiliary variables backed up the more bearish outlook on Fed monetary policy. From 44.5 to 51.3, the ISM Factory Costs Index increased. The NASDAQ Composite Index was impacted by hawkish Fed talk as well. According to reports, Fed moderate Kashkari is willing to raise interest rates by 25 or 50 basis points in March.


Investors reacted negatively this morning to inflation data and bullish talk, sending Bitcoin and ETH into the red.

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