Markets
This week’s US inflation reports are expected to shake up cryptocurrency markets
Cryptocurrency markets remained stable over the weekend following last week’s decline, dropping the total capitalization to $2.38 trillion.
This week’s economic calendar could prompt more volatility as key inflation data is reported alongside a series of speeches from the Federal Reserve, which could indicate the future direction of monetary policy.
Economic calendar
The main PPI (Producer Price Index) report will be released on Tuesday, which reflects input prices for producers and manufacturers, measures the costs of producing consumer goods and directly influences retail prices.
It is seen as a pre-indicator of inflationary pressures, making it a leading indicator for the following month’s CPI (consumer price index) report.
The April Core CPI report will be released on Wednesday. This is one of two key 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. Furthermore, it has a direct impact on the Federal Reserve’s monetary policy rate decisions.
“If CPI inflation rises again this week, it would be the third consecutive monthly increase,” Kobeissi’s letter noted.
There are also a total of 12 events with Federal Reserve speakers this week, including Chairman Jerome Powell on Tuesday.
Most U.S. CEOs expect the Fed to cut rates only once this year, according to a Conference Board survey of corporate CEO expectations last week.
Out of 136 CEOs surveyed, 31% said they expect no rate cut this year, while 26% expect a second cut. “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 took a look at the Fed over the weekend, comparing it to the board game Monopoly. He specifically referenced a section of the rules that refers to the in-game bank, which says the bank never goes bankrupt and can print new money when needed.
Cryptocurrency market outlook
Crypto markets stay subdued this Monday morning in Asia, with little movement among most majors.
Bitcoin prices were around $61,000 at the time of writing, having remained about the same as yesterday. However, the asset fell 4.3% compared to the same period last week.
Ethereum yes he failed to recover above $3,000 after a fall below it on May 10 and remains short-term bearish at $2,900 at the time of writing.
Altcoins were mostly in the red, with major losses for Solana, Dogecoin, Avalanche, and Near Protocol.