Macro Data To Watch This Week

Macro Data To Watch This Week

The Bitcoin and cryptocurrency market is still in a consolidation phase, where all eyes are on the BTC price. If a breakout of the consolidation below $30,000 and subsequently a new yearly high is successful, the altcoin market could also come back to life. A wake-up call for Bitcoin price could be this week’s macro data, with Wednesday being particularly crucial.

This macro data will be crucial for Bitcoin and cryptocurrency

On Wednesday, May 10, 2023, at 8:30 AM EST, the US Bureau of Labor Statistics will release April inflation data. In March, the year-on-year inflation rate stood at 5.0%, below the forecast of 5.2%, surprising on the upside. For the month of April, experts expect no change and anticipate a stabilization at 5.0%.

Month-on-month, 0.4% is expected for the base and core numbers. This is high but expected. A surprise to the downside would be most welcome after last week’s strong job market data (3.4% vs. 3.6% US jobless rate).

If that happens, the Bitcoin and crypto market is likely to react positively to this in an impulsive manner and could continue the superordinate uptrend. If inflation rates are above estimates, market expectations of initial rate cuts by the US Federal Reserve (Fed) as early as September are likely to be delayed. The US dollar index (DXY) may start to rise and thus put pressure on the price of Bitcoin.

On Thursday, May 11th at 8:30 am EST, the US Producer Price Indices (PPI) for April will be released. Analysts expect a significant monthly rise to 0.5% from -0.3% last month. Assuming the forecast holds true, that would break the downward trend of recent months. The last time producer prices rose this much was in January.

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If the forecasts are met or exceeded, this would bode ill for financial markets as DXY could gain traction. Given the inverse correlation with Bitcoin, this would not bode well. However, the PPI does not carry the weight that the CPI does. Therefore, a moderate reaction is expected.

If, on the other hand, the PPI is below market experts’ estimates and at best confirms deflation (from the previous day with the CPI), this would reinforce the bullish case for Bitcoin.

On Friday, May 12th at 10:00 am EST will be the preview of the US Consumer Confidence and Household Consumption Expectations for the current month of May. The consumer expectations released by the University of Michigan reflect the level of optimism of consumers with the evolution of the economy in the United States.

The initial estimate for May is 59.8, slightly lower than the previous month’s final figure of 60.5. Positive US consumer expectations (higher number) could indicate an increase in consumer spending and could have a favorable impact on the cryptocurrency market.

Consumer confidence is expected to weaken for the first time again, coming in at 63.0 (down from 63.5 in April). This could cause DXY to react with an additional discount, Bitcoin and cryptocurrency could benefit from this.

At press time, Bitcoin was trading at $29,954, once again breaking below the mid-range.

bitcoin price
BTC Price, 1-Day Chart | Source: BTCUSD at TradingView.com

Featured Image from iStock, chart from TradingView.com



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