Evening digest: Meta to mine AI conversations, Europe economic data, BTC rebounds

Wednesday started with uncertainties all over the space as the US government shutdown came in effect after the Senate failed to secure short-term funding, spreading an air of caution across the globe.

Meta came with a new feature, which might change the interface for users, as now the company will use AI conversations to personalize ads for users.

Tough economic news came from Europe as UK manufacturing falls to a six-month low and Eurozone inflation crept higher.

A glance at major developments on Wednesday.

US government shutdown: Day 1

The US government shutdown officially came into effect on Wednesday amid a fierce blame game from both Republicans and Democrats over the responsibility for the political deadlock.

Vice President JD Vance warned that layoffs will be next if the shutdown continues, raising anxiety levels among thousands of federal employees already facing salary delays.

“We don’t necessarily want to do it, but we’re going to do what we have to keep the American people’s essential services continuing to run,” Vance said in a White House briefing.

The officials close to the matter indicated that the Trump administration is mulling over laying off some federal employees, and a confirmation can come in next one or two days.

Meta to mine AI conversations for personalised ads

In order to make Facebook and Instagram content more personalised for users, tech giant Meta will mine user conversations with its AI assistants to fuel more personalised advertising, sparking a fresh wave of privacy debates.

The company aims to leverage the immense amount of data generated through interactions with its generative AI tools to refine ad targeting across Facebook, Instagram, and other platforms.

By interpreting conversational cues, such as interests, intent, and product mentions, Meta could serve ads that feel more relevant but also more invasive.

The company has decided not to launch this feature in countries with strict privacy regulations like the UK, South Korea, and the European Union.

European economic data

UK manufacturing activity fell to a six-month low in September, with the S&P Global Purchasing Managers' Index (PMI) dropping to 46.2 from 47.0 in August, indicating a sharp contraction.

The experts opine that the immediate factors behind the contraction are subdued domestic demand and a steep drop in export orders.

In related news, Eurozone inflation crept higher to 2.2% in September, above the European Central Bank's comfort zone of 2%. The latest numbers have dashed all hopes of any rate cuts, and investors are bracing for impact.

The increase was mainly driven by rising service prices and a smaller decline in energy costs. Core inflation held steady at 2.3%, indicating sustained underlying price pressures.

Bitcoin rebounds to $117K levels.

After witnessing weeks of sharp decline, Bitcoin prices rebounded on Wednesday, reclaiming the $117,000 level as "Uptober" optimism boosted sentiment following a volatile September close.

Historically, Bitcoin tends to perform well in October when September ends in green, supporting expectations of strong gains in Q4.

The price rally is also seen in the context of the US government shutdown and a weak dollar, which drove the investments towards Bitcoin as a hedge amid economic uncertainty.

Leveraged positions were cleared between $114,000 and $116,000, establishing solid support, with the next resistance near $120,000.

Analysts cautioned that previous shutdown-driven rallies ended with sharp drops, but if Bitcoin breaks $117,500 decisively, a new all-time high could be on the horizon.