Fed signals more rate hikes and UK jobs data is in focus

FTSE => The index falls towards 6900

BTC/USD => The cryptocurrency falls to 19k

Gold => The commodity falls towards 1660

FTSE falls ahead of unemployment data

FTSE fell 0.45% yesterday in risk-off trade and as bond yields crept higher. The cost of long-term borrowing rose further despite the Treasury bringing forward the date of its debt-cutting plan in an attempt to soothe the jittery markets. The gilt market has been unsettled since the government announced sweeping unfunded tax cuts in the mini-budget. Today the FTSE is falling further as attention turns to the UK jobs data. Unemployment is expected to hold steady at 3.6%, the lowest level since the mid-1970s. Vacancies remain high at around 1.3 million, keeping wage growth strong. High wage growth adds inflationary pressure, which could keep the BoE acting aggressively to hike rates. 

UK UnemploymentExpected: 3.6% (52k)Previous: 3.6%

Where next for FTSE?

The FTSE fell below the rising trendline support hitting a low of 6780 on October 3. The price rebounded from here but ran into resistance at 7100 the 20 sma and dripped back below 7000. The RSI supports further downside. Sellers will look to take out support at 6920, yesterday’s low, opening the door towards 6780 once more. Meanwhile, buyers will look to push the price above the 7000 psychological level ahead of 7070, the 20 sma, and 7100, the October high.

BTC/USD edges lower ahead of Thursday’s inflation data

BTC/USD traded sideways for most of yesterday before seeing a late fall to 19,500 and has since extended that decline to 19000 today, trading down around 2,5% across the past 24 hours. The cryptocurrency has traded in a familiar range again this week ahead of the US inflation report on Thursday. The data is expected to show a slight decline in headline inflation but a tick higher in core inflation and is not expected to warrant a sudden dovish pivot from the Federal Reserve. The Fed pressing ahead with its hawkish policy will likely continue to weigh on Bitcoin and other cryptocurrencies.

In crypto news, Coinbase has been approved for a DPT license to operate in the country. It joins the likes of Crypto.com and DB Vickers as major institutions with a DPT license.

Gold falls to a 10-day low

Gold fell 1.5% in the previous session, taking out key support levels and falling to 10 day low. Hawkish Fed bets following Friday’s strong non-farm payrolls report and a soaring USD pulled the precious metal lower. There was no high impacting US data yesterday, but Federal Reserve vice Chair Brainard reiterated the US central bank’s focus on taming inflation and restoring price stability. Today the US economic calendar is quiet again, leaving investors to focus on the hawkish Fed comments ahead of the minutes of the September FOMC and US inflation data later in the week.

Support can be found at 1654 (September 16 low) and 1614 (2022 low).

Resistance for the pair can be seen at 1673 (20 sma) and 1700 (round number).

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