On Wednesday, there were no US economic indicators to distract investors. The lack of data supported another bullish session, as markets bet on a 25 basis point Fed rate hike in February.
Following the latest ISM manufacturing and non-manufacturing PMIs, investors are hopeful that the Fed will take a less aggressive rate path to boost unemployment and bring inflation to target. With the private sector contracting at the end of the year, a soft landing would be better as a result of riskier assets.
Cryptocurrency news updates added to the upside, as FTX infection fears faded. FTX attorney Andy Dittderich reportedly told US bankruptcy judge John Dorsey that they had found more than $5 billion in cash and liquid assets. FTX’s attorney also announced plans to sell $4.6 billion worth of non-strategic investments.
While the forced sale of non-strategic assets may not amount to $4.6 billion, creditors face much smaller losses than originally feared, reducing the risk of contagion.
Further support was the news that Voyager Digital has been given the green light to proceed with the sale to Binance US.
The US economic calendar is likely to take center stage today, with the focus on the US CPI report and the jobless claims. The numbers could determine the amount of the Fed’s next rate hike.
A higher-than-expected CPI report and jobless claims below 200,000 could increase bets of a 50 basis point rate hike which would weigh on riskier assets. The speech of the members of the Federal Open Market Committee should also be considered.
Investors should also keep an eye on the cryptocurrency news feed for events that could move the call.