Week Ahead: CME Bitcoin Futures Launch, US Inflation and GDP Prints

Week Ahead: CME Bitcoin Futures Launch, US Inflation and GDP Prints

Written by: Phil Evans

Inflation data from the US and Eurozone are the last big economic releases of the year, while the Bitcoin craze continues with the launch of futures by CME.

CME Bitcoin Futures

The launch of Bitcoin futures by CBOE delivered the wild ride that most expected. Trading was halted twice in the first few hours as prices rocketed, although volumes were pretty thin. In a sign of just how fragile and fractured the market can be, the spread between the underlying spot market and prices on futures contracts was as wide as $2,000 at times.

Following this, CME Group, the world’s largest futures exchange, will launch its own futures contract on Monday, Dec 18th. CME Bitcoin futures will be based on the CME CF Bitcoin Reference Rate (BRR), which aggregates trading activity across major spot exchanges between 15:00 and 16:00 London time.

Final GDP Readings

On the data front, the third and final Q3 GDP readings for the US and the UK are due this week. Annual growth in the US surged to 3.3% in the third quarter, according to the second estimate, boosting the case for the Federal Reserve to continue on its hiking cycle. The second estimate for UK GDP showed Britain’s economy expanded by 0.4% in the third quarter, increasing 1.5% on a yearly basis.

Eurozone Inflation

ECB watchers should tune in on Monday to the Eurozone CPI inflation data for November. Flash estimates put inflation at 1.5%, up from 1.4% in October, while core inflation remained subdued at just 0.9%.

Core inflation has slid back in recent months and makes the ECB’s exit from extraordinary monetary policy all the more complicated. If there is another sign of weakening in the core reading the euro could come under pressure if markets start to bet on the central bank taking an even more leisurely pace to taper asset purchases.

US Inflation

The other big inflation release this week comes from the US. The Fed’s preferred gauge of underlying inflation, the core personal consumption expenditures (PCE) index, is released on Friday alongside the closely watched personal spending index and data on orders of durable goods.
Core PCE climbed by 0.2 per cent in October and was 1.4% higher on an annual basis. Although this is down from the 1.8% area achieved in the early part of the year, there are signs that the decline in the rate over the summer months has been arrested.

Source: ETX Capital