Recaps · US CPI · 12 Jun 2018, 13:30 UK
A delayed drop
This report came a day before a Fed decision, and it showed the highest annual inflation in six years. It still matched what forecasters expected. Bitcoin sat still for a quarter of an hour, then dropped, and it fell further over the next day.
- Release
- Tuesday 12 June 2018, 13:30 UK
- CPI
- +0.2% m/m, 2.8% y/y, highest since February 2012 (Reuters)
- Core CPI
- 2.2% y/y, in line with forecasts
- Next day
- Fed hiked to 1.75% to 2.00%
- Bitcoin at release
- $6,826
The numbers
Prices rose 0.2% in May and 2.8% over the year, up from 2.5% in April. Reuters reported it as the biggest annual rise since February 2012, and quoted JPMorgan's Michael Feroli calling the report "neither too hot nor too cold". The jump in the annual rate was mostly because a weak May 2017 reading dropped out of the comparison. The Fed began its two-day meeting that afternoon and raised rates the next day.
Fifteen quiet minutes
- 1 13:45 UK: still flat
- 2 13:50 UK: low, about 1.7% down
Bitcoin was +0.12% after 15 minutes, then fell to about 1.7% down at 13:50 UK. It was -1.32% at the hour, #28 of 117 CPI reports at 2.8 times a normal hour, and -1.04% at four hours. XRP, Ether and Litecoin fell by similar amounts. The S&P 500 ETF was -0.13% after its first hour.
| Market | 15m | 1h | 4h | 24h | 1w | × normal hour |
|---|---|---|---|---|---|---|
| Bitcoin | +0.12% | −1.32% | −1.04% | −5.35% | −1.41% | 2.8× |
| Ethereum | −0.00% | −1.45% | −1.46% | −9.91% | +1.14% | 2.5× |
| XRP | −0.35% | −1.99% | −2.16% | −8.28% | −6.28% | 2.8× |
| Litecoin | −0.37% | −1.47% | −1.16% | −10.24% | −6.85% | 2.1× |
Change from the 13:30 UK release.
What the day after shows
The larger move came later. Bitcoin was -5.3% a day after the release, Ether -9.9% and Litecoin -10%. That fall happened with stocks calm and before the Fed's hike, and the Fed decision itself barely moved Bitcoin: 0.1% in its first hour. In 2018, crypto was in a long bear market after the 2017 peak, and drops of this size were common on days with no US data.
Compare the March 2018 report, when Bitcoin rose 2.0% in the first hour and was almost back to flat at four hours. In both cases the first hour was a clear move and the four-hour result was small, which suggests the report was a trigger for short-term positioning rather than a change in view. A move that waits 15 minutes and runs against an in-line report deserves caution before it is read as a verdict on inflation.
Sources: release time and figures from the U.S. Bureau of Labor Statistics (public domain), first-print values via ALFRED, Federal Reserve Bank of St. Louis. Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.