Market Reacts to Unexpected Retail Sales Data
The release of stronger-than-expected US November Retail Sales data on Thursday had an immediate impact on the price of Bitcoin (BTC). The data showed a significant month-over-month increase in headline and core retail sales, causing some algorithmic selling and resulting in a drop of nearly $1,500 in the BTC price, from just under $43,000 to around $41,500.
This sudden drop in price was likely a reflection of market concerns that the positive retail sales data might lead the Federal Reserve to start reducing interest rates next year. However, the broader market did not interpret the data in the same way, as US stock prices continued to rise and US government bond yields and the US Dollar Index (DXY) continued to decline. Investors have been pricing in expectations of a Fed rate cutting cycle beginning in early 2024.
