CPI numbers come out in less than 3 hours. The street is optimistic in its expectations, from the FT:
The consumer price index is expected to have risen by another 0.6 per cent in October, according to a consensus estimate compiled by Bloomberg, up from 0.4 per cent in the previous period. Despite the monthly acceleration, the annual pace is forecast to have slowed to 7.9 per cent, down from 8.2 per cent.
Unfortunately, the street has been calling for inflation moderation for the longest time (since July for some), and part of their thesis is the widely tracked Zillow rent index. Inflation is still persistently high though, and I don’t expect it to come down in the October release.
The huge shelter component of the consumer-price index, a key inflation gauge for the Fed, largely hinges on this question to homeowners: How much do you think your house could fetch if it was rented out?
Zillow, however, relies on monthly changes in listing prices of rental properties, as do others that rent properties or track the data. That’s why Zillow’s metrics (purple below) show a retreat in growth, even though CPI (orange) has been climbing.
I think CPI will miss estimates (higher than expected) and markets will react badly.
I’ve never gotten into crypto. Right now there seems to be a small “Lehman moment: for crypto given the FTX.com crisis.
Crypto markets face weeks of deleveraging in the fallout from the crisis at digital-asset exchange FTX.com, a period of upheaval that could push Bitcoin down to $13,000, according to JPMorgan Chase & Co. strategists.
A “cascade of margin calls” is likely underway given the interplay between the exchange, its sister trading house Alameda Research and the rest of the crypto ecosystem, a team led by Nikolaos Panigirtzoglou wrote in a note.
I agree with JPM’s short-term BTC target of $13,000. Seems likely.
A great explainer here by CoinDesk on the whole situation. Notably, sentiment will take a huge hit and regulators will likely take even more notice:
Though FTX’s collapse doesn’t speak to the core technology behind any specific cryptocurrency, it has and will damage trust in the entire industry. Specifically, it will raise questions around the power of centralized platforms – like FTX, Binance, Kraken and Coinbase – that “custody” user funds rather than leave them in users' own crypto wallets.