The market has experienced some ups and downs over the weekend, mainly due to uncertainty about the upcoming PPI and CPI data. How will these two data affect the trend of cryptocurrencies?
Tonight at 20:30, the PPI data will be released. PPI measures the change in producer prices, and its previous value of month-on-month was 0.4%, which was expected to be 0.2%; the previous value of year-on-year was 3.0%, which was expected to be 2.7%. If the published PPI value is lower than expected, it may mean that the inflation problem in the United States has been alleviated, which may push the Federal Reserve to accelerate the pace of interest rate cuts. According to CME data, the market generally expects that a rate cut in September is almost a foregone conclusion. The question now is the magnitude of the rate cut - 25 basis points or 50 basis points. If the PPI data shows that inflation has cooled, it may increase the possibility of a 50 basis point rate cut in September, which is undoubtedly good news for the market.
If the PPI data is in line with or close to expectations, it also indicates that inflationary pressures in the United States have eased. Given that the market's expectations for a rate cut in September are already very high, such data will not have much impact on the market.
Similarly, tomorrow night's CPI data is also an indicator closely watched by the Federal Reserve, which directly reflects the price changes faced by consumers. If the CPI data is lower than expected, it will show that inflation has eased. However, regardless of the CPI data, a rate cut seems to be imminent.
Rate cuts mean that the market will usher in more liquidity, and the increase in the supply of US dollars will find new investment channels. Therefore, whether it is CPI or PPI, if their published values are in line with expectations, the market may interpret it as neutral news, neither particularly positive nor negative.
