[Macroeconomic indicators of the week] US presidential election, unemployment claims, FOMC interest rate decision

The cryptocurrency market is preparing to face the most volatile week in 2024. Three major macroeconomic data events are scheduled in the United States, which could have a significant impact on investors' portfolios. Meanwhile, Bitcoin (BTC) is trading below $70,000, and the fourth quarter (Q4) has historically been a positive period for the pioneering cryptocurrency, suggesting the potential for further upside. The US Election: Donald Trump vs. Kamala Harris The US market is approaching the climax of the political showdown between the Republican's Donald Trump and the Democrat's Kamala Harris on Tuesday, November 5th. According to Polymarket data, the US election is just hours away, with Trump narrowly leading. However, Kalshi, a peer in the prediction market industry, shows that Trump is leading Harris by 52% to 48%, reflecting the difference in platform user base. Nevertheless, analysts expect a highly volatile day for Bitcoin. The outcome of the US election could have a significant impact on economic policies, the regulatory environment, and investor sentiment. Depending on the winner, cryptocurrency-related policies may be revised, which could affect the price of Bitcoin and potentially spread to other cryptocurrency tokens. New Jobless Claims: A Labor Market Indicator Beyond the US election, the cryptocurrency market will be closely watching the initial jobless claims to be released on Thursday, November 7th. This economic data helps assess the tension or easing of the US labor market. Despite the labor market's relaxation, the unemployment rate remains at an absolute low. Last week, the number of Americans filing new unemployment insurance claims fell to 216,000 in the week ending October 25th, down from 228,000 the previous week. However, a consensus of 220,000 claims is expected. A higher initial jobless claims report on Thursday would suggest increased economic distress and labor market weakness, potentially leading to reduced consumer spending and investment in traditional assets like stocks and bonds. As a result, some investors may turn to alternative assets like cryptocurrencies as a hedge against economic uncertainty. FOMC Rate Decision and Jerome Powell's Speech On Thursday, the Federal Open Market Committee (FOMC) will release the minutes of its last meeting, followed by a speech from Federal Reserve (Fed) Chair Jerome Powell. The Fed operates under a dual mandate to maintain 2% consumer price index (CPI) inflation and sustain full employment. The FOMC's November meeting is scheduled for next Wednesday and Thursday, and economists are speculating about the possibility of another rate cut. In the previous meeting, the Fed lowered rates by 50 basis points (0.5%) as the US CPI fell to 2.4%. With inflation rates approaching the Fed's 2% target, the rise in the unemployment rate from 3.7% to 4.1% this year suggests potential labor market easing. Another rate cut may be on the table. Recently, Powell has hinted at the increased downside risks to employment, suggesting the potential for additional rate cuts to support economic growth before the situation deteriorates further. The FOMC's September projections also indicated that the federal funds rate could fall an additional 50 basis points by the end of 2024. With only the November and December meetings remaining, two 25 basis point cuts are likely. In this context, the CME FedWatch tool shows a 99.9% probability of a 25 bps rate cut on Thursday following the US economic data release. Meanwhile, Spotchain expects further Bitcoin price appreciation following the US election and FOMC meeting, setting a BTC price target of $100,000 for 2024. Spotchain says the uptrend will continue regardless of the election outcome. At the time of writing, Bitcoin is trading at $68,698, up 0.34% since the Monday session open.