Sadly but most importantly for short term Crypto price,
It is being reported that tensions in the Middle East escalated earlier.
The severity or risk of further escalations will hold more short term weight for "risk on" crypto than anything else.
I don’t post about politics and conflict, please monitor this yourself if you are short term trading.
“When the power of love overcomes the love of power, the world will know peace.” ― Jimi Hendrix.
The economic calendar looks pretty uneventful until Thursday-Friday.
For those who don’t want to read the boring stuff I put final thoughts at the end.
Japan
There could be market shock triggers if Japan CPI data comes out higher, especially by a lot.
The most important reading will be the Tokyo CPI on Thursday, if these readings come out much higher and show inflation is increasing in Japan it could once again spook the carry trade market, if inflation is increasing then it will become more likely Japan will increase interest rates (Bad for the Yen carry trade).
America
On Friday Powell basically confirmed rate cuts will start in September, the market already had this mostly priced in.
What Powell said on Friday did not drastically change what the market had already priced in for September.
A September cut (25/50bps) is still priced the same as it was a week ago.👇
There has been a slight increase in the chance of up to 75bps cuts over the September/November meetings👇.
The market still anticipates a 25bps cut in September and November with a combined total of 100bps cuts by the end of December.👇
These odds change on a daily basis, they will be data dependent.
US data this week.👇
Lower impact,
There are a lot of medium impact readings this week (Orange), some will effect market sentiment if they come out far above or below the forecast, most will not have a huge impact on market sentiment.
Consumer Confidence could move the market if it gives a shock reading, it has been pretty consistent over the last 2 readings, only shock readings will move the market, shock readings do happen.👇
On Thursday the Prelim GDP q/q comes out, this is the second reading and is not as impactful as the advance reading, it is expected to come out at 2.8% as forecast.
High impact,
Thursday - Unemployment Claims and pending home sales,
Last week the market seemed to shrug off the fact 818000 fewer jobs were created from April 2023-May 2024, i guess that the jobs market must have been overheated like the Fed stated.
The unemployment data has come out slightly lower than forecast over the last 3 weeks to halt recession fears for now, one very bad reading could test market sentiment once again.
Pending home sales on Thursday could also affect the market if they give a shock reading, the housing market is a key economic health indicator and pending home sales is forward looking.
Friday - Core PCE m/m,
PCE is the FEDs preferred gauge of inflation, most importantly core PCE (excluding food and energy).
The market will focus heavily on this reading and react to it.
PCE is one of the key factor the FED uses when deciding on Policy.
The forecast reading is 0.2%
If this comes out above 0.2% it will be bearish as it will show higher than expected inflation.
If it comes out at 0.2% - 0.1% it will be Bullish, if it gives a shock reading below that then it could point to a slowing economy and spark recession fears.
Final Thoughts,
I see no economic reasons why Crypto should not be Bullish until or beyond Thursday, shock data from Japan or America on Thursday-Friday could change sentiment.
A lot of what Powell said on Friday was already priced in so I don’t expect Crypto will go parabolic or even close, i expect moderate bullish conditions.
For Crypto the highest impact readings will be unemployment, PCE and possibly the Tokyo CPI in Japan, the best result for Crypto would be lower readings on all (PCE not to shock much lower)
Open interest and Fear and greed is climbing which shows liquidity is coming back to crypto.
Important to note,
Any increased tensions in the Middle East will effect Crypto sentiment more than economic data, my macro view is based on economic data not geopolitical tensions, i am not a short term trader, if you are short term trading then monitor these events closely.
We are nearing elections so politics are always a factor for crypto price, this includes the US Government moving its BTC for whatever reason as it has done in past weeks.
On Wednesday Nvidia earnings come out for the second quarter, this will have a huge effect on the Nvidia price and the stock market indexes, it could effect Crypto(the butterfly effect).
I would urge you not to high leverage/margin in current market conditions, Crypto might be calm/slightly bullish for now but there are many factors that we have no power to control that could change crypto sentiment in an instant.
Trade Safely.
Peace.