September 18: REX Wire Market Outlook

Going into the new week, it's a mixed picture once more. There was some encouraging news on inflation, from more than one country, but climbing energy prices mean it's not time to pop the champagne yet (or Prosecco, because inflation). That could come back to bit the Fed and other central banks if they take their foot off the gas too soon. The Fed, Bank of England, and Bank of Japan, will all be making decisions this week.

In the UK, wages are growing faster than prices, raising the prospect of a wage-price spiral that the Bank of England is so keen to avoid. Consequently, a rise to 5.5% on Wednesday is likely. Having said that, the long-term picture is considerably bleaker, making the BoE happy.

Yes, that's £230 per week, which translates to around $15,000 per year.

In Europe, which is now on the brink of recession, the ECB has raised interest rates to 4%, the highest level since the euro was launched in 1999. Christine Lagarde, the ECB's President, has stated she expects this to be the last rise of the cycle. Europe has a one-size-fits-all system, in which a single interest rate is applied to 27 countries. Needless to say, the different state of those economies means every country has its own opinion about how well the ECB is doing.

All of this, alongside the prospect of another rate rise in the US, feeds through into a stronger dollar. The DXY is above 105, a six-month high, and not far off a 2023 high.

Bitcoin Stabilizes, Eyes Higher?

Despite the pressure that a stronger dollar should place on crypto, bitcoin is up, pushing a September high at $27,200. Ignoring the blip from the Ripple verdict (which retraced in full within two days), BTC is at a one-month high, though there's a lot of work to do before the crash of mid-August is repaired.

Analyst Brian Beamish comments that "key bearish objectives" have been achieved for the correction, but that the road back up won't be smooth.

Meanwhile, a ray of sun comes in the form of former SEC lawyer Norman Reed being appointed as Binance.US's next CEO—something that gives the exchange a fighting chance in its many legal battles with regulators.

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