Matt Weller (City Index): Even if inflation continues to moderate, Madame Lagarde and company are likely to opt for at least one 50bps rate hike to start the year
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What a week! UK inflation, eurozone inflation, bullish sentiment in crypto market - there's so much to talk about! That's why we reached out to analysts from FOREX.com and City Index to provide you with their views on the ongoing macro events and situation on crypto market, where Bitcoin has recently gained, given back some, but now seems to be cementing the $21,000 level.
Provided Eurozone inflation comes at less than 10% on Wednesday, would you expect ECB to go for a series of 25bp rate hikes?
Even if inflation continues to moderate, Madame Lagarde and company are likely to opt for at least one 50bps rate hike to start the year. The ECB feels it is behind its peers in fighting inflation, and the unseasonably warm weather to begin the winter has lessened the likelihood of a deep recession driven by an "energy crunch" in the first half of the year. However, if inflation continues to moderate in the coming months, the ECB is likely to shift to 25bps increases sooner rather than later.
We still expect prices to at least retest the Q4 bottom below $20K in the coming weeks, but the longer that low holds
Bitcoin remains in bullish short-term trend, with prices testing their highest level since September on the back of a big rally to start the year. We still expect prices to at least retest the Q4 bottom below $20K in the coming weeks, but the longer that low holds, the more confidence traders will have that this cycle's low may already be behind us.
