investingLive European news wrap: Crypto markets sink ahead of Clarity Act vote

Headlines:

Markets:

  • WTI crude oil up +1.45% to $102.86
  • Gold down -0.40% to $4281
  • EUR/USD down -0.11% to 1.1534
  • USD/JPY up +0.33% to 154.82
  • S&P 500 down -0.21% to 7609.00
  • Bitcoin up -1.41% to $77,063

It’s been a pretty quiet session with limited newsflow and economic data releases. In terms of economic data, the highlight of the session was the UK employment report. The UK labour market showed further signs of cooling, with payrolls falling again and wage growth slowing. The data reinforces the picture of gradually weakening labour conditions. The data therefore offered some dovish signals, but not enough to materially change the BoE’s inflation focused stance.

We also had the German ZEW survey. Investor sentiment continued to improve in September, but the increase was smaller than expected, potentially pointing to waning momentum amid the ECB rate hikes and surging oil prices.

In the markets, the biggest moves were seen in the cryptocurrencies space ahead of the cloture vote on the Clarity Act today at 2:15pm ET. A failed vote could close the legislative window for crypto market structure this year, given the November midterms. This outcome would likely be negative for cryptocurrencies in general in the short-term. But even a successful vote may not be positive. With the FOMC decision coming tomorrow, I’m afraid we could see a “sell the fact” reaction as traders shift their attention from the Clarity Act back to monetary policy and the negative macro picture.

In other markets, the price action has been mostly rangebound ahead of tomorrow’s FOMC decision as hawkish surprises could lead to risk-off flows. In the near-term, oil prices continue to drive pretty much all markets. The Iran war and Fed rate hikes remain the two main stories to focus on.

This article was written by Giuseppe Dellamotta at investinglive.com.

Leave a Reply