Upcoming U.S. economic data releases will likely impact the volatile crypto market.
Inflation figures (PPI, CPI) and jobless claims are key indicators to watch.
The Fed’s interest rate decisions may be influenced by these economic reports.
The US economy is under the microscope this week, with a slew of key economic data releases to impact not just traditional markets, but the crypto space as well.
Market experts anticipate the upcoming figures on inflation, employment, and consumer sentiment will have an influence on the trajectory of the crypto market, which has been grappling with its own volatility recently. Several key indicators are set to be released within the week, including U.S. PPI Inflation, U.S. CPI Inflation, Initial Jobless Claims, Retail Sales, and U.S. Consumer Sentiment.
The Producer Price Index (PPI), scheduled for release on Tuesday (August 13), will offer an interesting perspective on consumer price inflation. The PPI, a leading inflation indicator, measures the price trajectory of manufactured goods. A positive (high) PPI reading reflects a bullish outlook for the US Dollar (USD). Conversely, a negative (low) reading usually signifies a bearish market for the USD. The result of Tuesday’s PPI could influence monetary policy, potentially prompting the Federal Reserve to adjust interest rates to combat inflation.
Market commentators also anticipate the release of the Consumer Price Index (CPI) inflation and retail sales numbers on Wednesday (August 14) and Thursday (August 15), respectively. Given the dovish rate repricing for the Fed funds target range, these reports will provide insight into the US market’s trajectory.
As of press time, 2024’s basis point cuts are priced at 1%, with September’s implied basis points set at 0.40%. Forecasters expect July’s Headline CPI inflation to remain at +3.0%, matching June’s rate. A market downturn could trigger 50 basis points of easing for September’s meeting, potentially tanking the US dollar (USD) and US Treasuries. Conversely, an upside surprise could spark a USD and yield rally.
Additional data on this week’s watchlist includes the Initial Jobless Claims on Thursday (August 15) and the U.S. Consumer Sentiment on Friday (August 16). A dip in the Initial Jobless Claims is interpreted as an improvement in the labor market, which could positively impact the USD’s performance and vice versa. According to a Reuters report, applications for unemployment benefits fell more than expected last week, further reinforcing market sentiment.
Despite signs of recovering sentiment, investors reacting to these indicators might trigger increased market volatility.
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