• Bullish remarks from Fed Chair 
• Markets await more evidence on US interest rate cuts

Bitcoin fell on Tuesday for the third straight session, plumbing two-week lows after bullish remarks from Fed Chair Jerome Powell, which reduced the odds of a 0.5% interest rate cut in November.

Earlier data from crypto exchanges showed bitcoin retail activity is at normal levels. 

The Price

Bitcoin fell $831, or 1.3% at Bitstamp today to $62,500, the lowest since September 22, with a session-high at $64,122.

On Monday, bitcoin lost 3.5%, the second loss in a row on profit-taking off two-month highs at $66,508.

Crypto Market Value 

The market value of cryptocurrencies fell by over $20 billion to a total of $2.335 trillion, as both bitcoin and ethereum lost ground.

Powell

Federal Reserve Chair Jerome Powell took a somewhat bullish tone in a speech in Tennessee, saying the Fed will likely commit to a 0.25% interest rate cut in the future, and there’s no need to rush through the process.

US Rates

Following the remarks, and according to the Fedwatch tool, the odds of a 0.5% Fed interest rate cut in November fell to 38%, with a 62% chance of a 0.25% rate cut.

Retail Traders

Net cash inflows from regular small investors remain normal in the crypto sector even as big investors expand purchases, according to the latest data from Binance and OKX.

• Somewhat bearish remarks from ECB president
• Strong odds of October eurozone interest rate cut

Euro fell in European trade on Tuesday and extended the losses for the third straight session against the US dollar, plumbing one-week lows, under pressure from earlier data that showed slower than expected German inflation, and after bearish remarks from ECB President Christine Lagarde.

The data and remarks boosted the odds of an October 0.25% interest rate cut by the ECB. 

The Price

The EUR/USD pair fell 0.3% today to $1.1100, the lowest since September 23, with a session-high at $1.1144.

The pair closed Monday down 0.2%, marking the second loss in a row on profit-taking off 14-month highs.

Euro rose 4% against the dollar in the third quarter, the first quarterly profit in three on hopes for a reduction in the US-eurozone interest rate gap.

German Inflation

Earlier German data showed consumer prices rose 1.6% y/y in September, slowing down from 1.9% in August, and the slowest reading since February 2021.

Lagarde

European Central Bank President Christine Lagarde told the European Parliament yesterday that recent developments extend confidence that inflation is returning to targets, which will reflect in the October policy decision.

European Rates

The odds of an ECB 0.25% interest rate cut in October jumped from 80% to 90% following the latest data.

Now investors await inflation data for the whole eurozone, expected up 1.8% in September, slowing down from 2.2% in August.

Most US stock indices were little changed today but headed for monthly and quarterly gains.

Wall Street sustained massive losses in the first week of the month as investors expressed concerns about seasonal changes and the potential economic recession.

But the stock market recovered quickly and marked three successive weekly profits as the Federal Reserve voted to cut interest rates by 50 basis points.

On trading, Dow Jones fell 0.2%, or 105 points as of 15:26 GMT to 42,207, while S&P 500 stabilized at 5737, while NASDAQ shed 0.1% to 18,128.

• Mounting concerns about global demand as China struggles 
• The market faces a potential supply glut

Oil prices fell in American trade on Monday, resuming the losses after a hiatus on Friday, with prices still under pressure after reports that Saudi Arabia is preparing a production hike in December.

Oil prices are also suffering from weak global demand outlook, as China’s economy stumbles, and a potential supply glut develops. 

Prices

US crude fell 1.4% today to $67.60 a barrel, with a session-high at $69.28.

Brent shed 1.2% today to $71.07 a barrel, with a session-high at $72.75.

On Friday, US crude rallied 1.8%, while Brent added 0.85%, marking the first profit in three days as it recovered from two-week lows.

Oil prices lost 3.75% on average last week, the first weekly loss in three.

Saudi Output 

The Financial Times reported that Saudi Arabia is willing to give up its unofficial price target at $100 a barrel.

According to sources, Saudi officials are preferring to hike oil production in December, even if it led to a prolonged phase of lower oil prices.

Libyan Output

Prices are also pressured by expectations that Libyan crude output will spike in upcoming weeks as warring factions reach a deal to appoint a new central bank governor.

Quarterly Trades

Oil prices are down 16.5% on average this quarter, about to mark the second successive weekly loss.

Chinese Demand 

A memo released by Goldman Sachs predicted a sharp slowdown in Chinese demand on oil as the economy shifts more towards natural gas and EV car usage.