US data dump ahead of Thanksgiving holiday

European stocks have erased earlier gains to trade slightly in negative territory on Wednesday and US futures are pointing to a similar open ahead of tomorrow’s Thanksgiving bank holiday.

This could have been a relatively uneventful week as a result of tomorrow’s US bank holiday as traders fully embraced the time off with family, turning the celebrations into a long weekend or even a full week away from the desk. But instead, it’s been quite the opposite, as Powell’s renomination sent shockwaves through the markets and the few remaining lira bulls abandoned ship as the currency sank to new lows.

While we’re still seeing the effects of that and the ripples will continue to spread into year-end, especially around the December Fed meeting, we may start to see some calm return to most corners after today. But with a plethora of pre-Thanksgiving data out first, there’s still time for a few more shocks before then.

GDP, durable goods, jobless claims, PCE inflation, income, spending, inflation expectations, new home sales and consumer sentiment are among the releases coming from the US. And that’s before we get the FOMC minutes from earlier this month later in the session.

The pick of the bunch is surely the PCE data, given the trend we’ve seen in the inflation readings recently and pressure that’s mounting on the Fed to tighten monetary policy faster. The minutes will be interesting but a lot has happened in the last few weeks, to the extent that I wonder what we can actually learn of any significance.

Needless to say, we’ll have a much clearer image of the economy by the end of today which will feed into the now hawkish expectations ahead of next month’s meeting. The transitory argument alone just doesn’t resonate anymore so aside from the dot plot, the Fed’s language next month will set the tone for 2022.

Bitcoin stable but further downside may come

Bitcoin has stabilised over the last couple of days after finding support around USD 55,500. The move below USD 58,000 was a blow and it could fall further still in the near term. It’s hard to imagine the correction being too severe though given the momentum we’re seeing in the space at the moment and the excitement it’s generating.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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