Crypto markets have several US economic events to look forward to this week after Donald Trump’s re-election and the Federal Open Market Committee’s (FOMC) interest rate decision last week.
Amid the restored implication of US macroeconomic data on Bitcoin (BTC) and crypto markets, traders and investors should brace for volatility around the following events.
CPI
The US Consumer Price Index (CPI) is a crucial economic data this week, due for release on Wednesday, November 13. Federal Reserve (Fed) chair Jerome Powell will release the Consumer Price Index (CPI) data for October.
The release comes after the FOMC resorted to a 25 basis point (bps) rate cut in last week’s meeting. Powell indicated that the policymakers did not plan to raise interest rates, acknowledging that Americans are still feeling the effects of high prices. Against this backdrop, US CPI will be a key watch as it will influence the Fed’s policy decisions moving forward.
The US CPI for September was 2.4%, down from 2.5% in August and 2.9% in July. This suggests a general easing in inflation since April.
Economists anticipate headline inflation to drop 0.2% for October. They also forecast core CPI, the more closely watched US economic data that eliminates volatile food and energy costs, to drop by 0.3%.
If the Wednesday data comes in hotter-than-expected, however, it would suggest a potential inflation resurgence in the coming months. This could restrict the trend at which the Fed has been lowering policy rates further and, more importantly, interrupt Bitcoin’s upward trajectory.
“We keep in mind that the lower rates go, the more liquidity institutional investors will have to invest in risky markets like Crypto,” said Crypto Futur, a popular analyst on X.
Initial Jobless Claims
Another US economic event on the watchlist this week is the initial jobless claims. The number of continued claims gauges the size of the unemployed population. The labor department will release this macroeconomic data on Thursday, November 14, after new applications increased by 3,000 to 221,000 in the week through November 2.
It is worth mentioning that the FOMC’s concerns about a gradual weakening in the labor market prompted the central bank to cut interest rates by half a percentage point in September. Against this backdrop, Fed officials announced a quarter-point rate cut last week. Of note is that having excessive jobless claims would increase the risk of recession as unemployment decreases purchasing power.
PPI
The US Bureau of Labor Statistics (BLS) will also report October’s Core Producer Price Index (PPI) this week. This data determines price increases at the producer level. Its influence on financial markets comes as it measures inflation at the wholesale level.
Increases in PPI indicate rising production costs, which could lead to higher energy and hardware costs required for mining and processing crypto. As such, a higher core PPI on Friday could negatively affect Bitcoin and crypto.
US Retail Sales
The US retail sales sum up the list of US economic events with crypto implications this week. The Censors Bureau will release the US retail sales data on Friday, offering valuable insights into consumer spending trends.
This accounts for a significant portion of the US economy. In September, sales at US retailers increased by 0.4%, and currently, a 0.3% increase is expected from the previous month.
Strong October US retail sales data would signal reduced recession fears, reflecting a robust economy and increased consumer spending. This momentum would likely enhance the appeal of riskier assets, including stocks and cryptocurrencies, as it suggests healthier financial conditions.
As traders and investors await the US economic data, Bitcoin has been up by almost 2% since Monday’s session opened. Despite these modest gains, the pioneer crypto is holding well above the $80,000 psychological level, trading for $80,808 as of this writing.
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