CPI Wednesday and Warsh Thursday test the October hold

As always, this is not financial advice. This is a research piece, not investment guidance; always do your own research before trading.

The minutes didn’t bring an October hike back

The September minutes, released October 7, showed the committee united behind its hike but did nothing to revive hopes of an immediate follow up. As of October 9 and 10, Kalshi priced a hold at 82% and a hike at 17%, and Polymarket priced a hold at 83.5% and a hike at 15.5%. CME fed funds futures, at the time of writing, price a hold at 80.6% and a hike at 19.4%. The market expects another hike, but probably not on October 28.

The last CPI before the FOMC

September CPI prints Wednesday at 8:30am ET. Consensus is +0.6% m/m and 3.7% y/y on the headline. A hot print raises the odds of an October hike or pulls later hikes forward, which would weigh on gold and on crypto that trades with growth. A soft print makes the hold look safer.

PPI and September retail sales follow Thursday at 8:30am ET. Consensus for retail sales is about +0.3% m/m.

Warsh’s first speech since the minutes

Warsh speaks at the IMF and World Bank Annual Meetings in Bangkok on the morning of Friday, October 16, local time, which is just after midnight ET. It is his last scheduled public appearance before the FOMC blackout. The market is pricing a hold but still expects hikes, so how he describes the path from here will move prices. Fortune reports that commentators are comparing his Fed to two earlier episodes: the 2022 to 2023 hiking cycle, which added 525bp in about 16 months, and the 2013 taper tantrum.

Bank earnings open the season

Q3 earnings season starts Tuesday. JPMorgan Chase, Citigroup, Goldman Sachs and Wells Fargo report before the open, with JPMorgan expected at $5.95 per share on $51.16B of revenue. Bank of America, Morgan Stanley and BlackRock report Wednesday before the open.

TSMC sets the tone for chips

ASML reports Q3 on Wednesday. As one of TSMC’s most important suppliers, it gives an early read on the chip cycle. TSMC reports Thursday during Asian hours, with the call at about 2:00am ET. Its Q3 revenue already beat expectations at about NT$1.49T against a consensus of about NT$1.46T, and it had guided Q3 gross margin to 65% to 67%.

The call is the first solid read this earnings season on AI capex, and that matters more to MU, SNDK, SKHYNIX, DRAM, NVDA, SOXL and KORU than any of their own calendars. SKHYNIX and KORU also have a Korean tailwind: September exports hit a record $120.9B, up 83.5% y/y, and chip exports rose 263%.

Crypto: ETF outflows, an expiry and two unlocks

BTC trades around $83,700 on RISEx, down from about $86,100 a week ago. Spot BTC ETFs lost $487.1M on October 7, their largest single day outflow since June 25.

Deribit’s weekly BTC and ETH options expire Friday, with about $1.25B of BTC open interest and $247.5M of ETH. That is small next to the $28.5B that expired last December.

Two token unlocks fall inside the window. PUMP unlocks about 6.87B tokens, worth roughly $35.95M, on Wednesday. ARB unlocks 92.65M tokens on Friday, about 2% of circulating supply and worth $17.5M to $19.9M.

Day by day

• Monday, October 12 (Columbus Day). US stocks trade normally, but the cash Treasury market is closed, as are markets in Japan and Canada. The IMF and World Bank Annual Meetings open in Bangkok and run through October 18.
• Tuesday, October 13. JPMorgan, Citigroup, Goldman Sachs and Wells Fargo report before the open. The IMF publishes its World Economic Outlook, and OPEC publishes its monthly oil market report.
• Wednesday, October 14. The main risk event: September CPI at 8:30am ET. Bank of America, Morgan Stanley and BlackRock report before the open, and ASML reports Q3. The IEA publishes its oil market report. PUMP unlocks about $35.95M.
• Thursday, October 15. PPI, retail sales and weekly jobless claims at 8:30am ET. TSMC reports during Asian hours. EIA inventory data comes out late morning. Cleveland Fed President Hammack speaks at a Women’s Trading Network event. Warsh speaks in Bangkok just after midnight ET.
• Friday, October 16. Monthly equity options expire, along with Deribit’s weekly BTC and ETH options. ARB unlocks 92.65M tokens.

What to watch on the exchange

• BTC and ETH: CPI Wednesday, Warsh late Thursday and Friday’s expiry, after the biggest ETF outflow since June.
• XAU and XAG: CPI and PPI are the main scheduled drivers of real yields this week, with the 10 year near 5.24%.
• MU, SNDK, SKHYNIX, DRAM, NVDA, SOXL and KORU: ASML gives an early read Wednesday, and TSMC’s call Thursday gives the full one.
• CL and BZ: Oil supply reports come out three days in a row (OPEC, IEA, EIA), with Brent already below $103 on signs of easing tensions with Iran.
• SPY and QQQ: Bank earnings Tuesday and Wednesday, CPI Wednesday, TSMC Thursday and options expiry Friday.
• PUMP: About $35.95M unlocks Wednesday.
• ARB: $17.5M to $19.9M unlocks Friday, after the price has risen about 159% in 60 days.
• MSTR and CRCL: Both trade on BTC and ETH flows and on whatever CPI and Warsh do to the rate path.

FAQ

Is a rate hike priced for October 28?

No. As of October 9 and 10, Kalshi, Polymarket and CME futures price a hold at 80.6% to 83.5% and a hike at 15.5% to 19.4%. The market still expects more hikes, just probably not at this meeting.

When is September CPI, and what is expected?

Wednesday, October 14, at 8:30am ET. Consensus is +0.6% m/m and 3.7% y/y on the headline. It is the last CPI print before the October 27 to 28 FOMC meeting.

When does Warsh speak?

On the morning of Friday, October 16, in Bangkok, at the IMF and World Bank Annual Meetings. That is just after midnight ET, so late Thursday night for US traders. These are his first public remarks since the minutes were released.

Why does TSMC matter for the chip names on RISEx?

TSMC reports Q3 on Thursday, and its Q3 revenue has already beaten consensus. The call is the first solid read this earnings season on AI capex demand, and that read carries through to MU, SNDK, SKHYNIX, DRAM, NVDA, SOXL and KORU.

Are US markets open on Columbus Day?

US stocks trade normally on Monday, October 12. The cash Treasury market is closed, as are markets in Japan and Canada.

Which token unlocks this week?

PUMP unlocks about $35.95M on Wednesday. ARB unlocks 92.65M tokens, worth $17.5M to $19.9M, on Friday.