Markets
This week’s US inflation reports expected to shake crypto markets
Crypto markets remained stable over the weekend after a decline last week, reducing total capitalization to $2.38 trillion.
This week economic calendar could induce more volatility as key inflation data is released alongside a series of speeches from the Federal Reserve, which could indicate the direction of monetary policy in the future.
Economic Calendar
On Tuesday, the main PPI (Producer Price Index) report will be released, which reflects the prices of inputs for producers and manufacturers, measuring the costs of producing consumer goods and directly affecting retail prices.
It is seen as a pre-indicator of inflationary pressures, making it an important indicator for the following month’s CPI (Consumer Price Index) report.
The Core CPI report for April is released on Wednesday. This is one of the two main indicators used to measure inflation, the second being Personal Consumption Expenditure or PCE.
The CPI directly shapes price trends in the economy, consumer spending and business outlook. It also directly impacts the Federal Reserve’s policy rate decisions.
“If CPI inflation rises again this week, it will mark the third consecutive monthly increase,” noted the Kobeissi Letter.
There are also a total of 12 Federal Reserve speaker events this week, including Chairman Jerome Powell on Tuesday.
According to a Conference Board measure of CEO expectations survey conducted last week, most U.S. CEOs expect the Fed to cut rates just once this year.
From 136 CEOs Respondents, 31% said they expect no rate cuts this year, while 26% project 2. “Meanwhile, markets are pricing in just 2 rate cuts this year as a base case, with the first cut in September.” reported Kobeissi.
Interestingly, Elon Musk attacked the Fed over the weekend, comparing it to the board game Monopoly. He made specific reference to a section of the rules regarding the game’s bank, which says that the bank will never go bankrupt and can print new money when necessary.
Crypto Market Outlook
Crypto markets remain subdued on Monday morning in Asia, with little movement among most majors.
Bitcoin prices were around $61,000 at the time of writing, having remained at about the same time as yesterday. However, the asset has fallen 4.3% since the same period last week.
Ethereum has failed to recover above $3,000 after a drop below on May 10 and remains at short-term lows at $2,900 at the time of writing.
Altcoins were predominantly in the red, with bigger losses for Solana, Dogecoin, Avalanche and Near Protocol.