$BTC

is correlating with cautious equity markets ahead of Tuesday's U.S. Consumer Price Index (CPI) report and a Federal Reserve rate announcement on Wednesday.

The expectation among investors is that the U.S. Federal Reserve does not have much space to maneuver, after much higher May payrolls lowered expectations for the central bank's first rate cut in September. According to the CME's FedWatch tool, interest rate traders are betting the Fed might keep rates on hold until November. The tool indicates a 47% probability that the Fed will maintain rates at their current levels during September's Federal Open Market Committee (FOMC) meeting.

Bitcoin follows equities lower

U.S. stock futures ticked lower ahead of the latest CPI inflation report and June FOMC meeting. Dow Jones Industrial Average futures dropped 0.38% and S&P 500 futures were down 0.23% in pre-market trading.

Meanwhile, major European and UK equity indices were red. In London, the FTSE 100 posted a 60.90-point decrease to 8,167.58 in mid-day trading.