A rather interesting week is arrived for the cryptocurrency market, with important economic data expected from the United States that could move the markets.
Several key inflation reports set to be released, and we could possibly get a hint about the Federal Reserve’s monetary policy decisions.
Inflation, and the explanations
The past week saw financial and crypto markets shaken by increased volatility, partly due to the unwinding of the Japanese yen carry trade.
This week’s U.S. economic reports could causing another painful days, but maybe we get clues on how the Federal Reserve might adjust interest rates in response to inflation data.
On Tuesday, the Producer Price Index (PPI) for July will be released. This index measures the cost of producing consumer goods and is a leading indicator of inflationary pressures.
The PPI report will provide insights into the costs faced by producers, which can affect retail prices in the following months.
Following the PPI, the Consumer Price Index (CPI), aka inflation for July will be released on Wednesday.
Analysts think that the headline CPI will show a 3% annual increase, consistent with June’s figures, with a slight monthly rise of 0.2% after a 0.1% decline in June.
How much people spend, and how much they will
Thursday will bring the release of July’s retail sales numbers, which will provide information about the health of the U.S. economy and consumer spending patterns.
Bank of America’s head of economics, Michael Gapen suggested that if the retail sales and inflation data align with expectations, it could lead the market to anticipate fewer interest rate cuts this year and reduce the likelihood of a bigger rate cut in September.
What about the crypto market?
On Monday morning in Asian trading, the cryptocurrency market experienced another downturn, with total market capitalization falling by 3.5% to $2.14 trillion.
Bitcoin dropped 4.4% in the past 24 hours, falling from just over $61,500 to $58,500 in the time of writing.
Ethereum also saw a decline, sliding by 4% to $2,530. And as almost always, altcoins faced much bigger losses, with many returning to levels typically seen during bear markets.
