Replays · US CPI · 13 Oct 2022, 13:30 UK
Sold on the number, bought by lunchtime
The September 2022 inflation report was worse than forecast, and every market sold it at 13:30 UK. Within a few hours, stocks had staged one of their biggest comebacks in years, and crypto came back with them.
- 1 13:30 UK: Bitcoin's low comes on the first candle
- 2 16:40 UK: Bitcoin's high, about 1.3% up
The number
Headline CPI rose 0.4% in September and 8.2% from a year earlier. The bigger problem was core inflation, which leaves out food and energy. It rose 0.6% for a second month and reached 6.6% a year, the highest since 1982. Reuters noted that rents rose by the most since 1990. The Wall Street Journal reported that a fourth three-quarter-point Fed hike in November was widely expected.
The first hour
Bitcoin was $18,808 at the release. Its lowest point of the afternoon, about 3.3% down, came inside the very first 5-minute candle. It spent the next hour close to that level and was -2.72% after an hour. That ranks #8 of 117 CPI releases in our data, at 5.8 times a normal hour. Ether fell 3.5% in the same hour.
The reversal
US stocks opened lower at 14:30 UK. Bloomberg reported that the S&P 500 fell as much as 2.4%, touching its lowest level in almost two years, and then closed 2.6% higher. Reuters put the swing partly down to traders unwinding protective bets they had placed before the data. In our window, the S&P 500 ETF was +3.2% at two hours and +4.6% at four.
Crypto turned with stocks. Bitcoin was still -2.1% at two hours, but was +0.78% at four hours and +4.4% a day later.
| Market | 5m | 1h | 4h | 24h | × normal hour |
|---|---|---|---|---|---|
| Ethereum | −3.47% | −3.54% | +0.14% | +6.09% | 6.0× |
| Litecoin | −2.75% | −3.33% | −0.24% | +2.93% | 4.7× |
| Chainlink | −4.45% | −2.82% | +1.63% | +5.49% | 4.0× |
| Cardano | −2.52% | −2.73% | +1.61% | +2.58% | 4.9× |
| Bitcoin | −2.40% | −2.72% | +0.78% | +4.44% | 5.8× |
| Solana | −3.02% | −2.05% | +2.19% | +7.83% | 3.6× |
| XRP | −1.50% | −2.00% | +1.53% | +6.77% | 2.8× |
Change from the 13:30 UK release, sorted by the first hour.
Solana and XRP had the strongest recoveries, both clearly positive at four hours and up 8% and 7% at 24 hours. The pound jumped too, +2.23% against the dollar at the London 4pm fix, during a turbulent week for UK markets.
This replay shows why the first hour isn't the whole story. A hot number produced a sharp, fast drop, and then a market that had already braced for bad news bought it back.
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.