A better-than-expected Labor Market Report (NFP) last Friday ensured a conciliatory end to the week of the last trading week. The positive price development on the US stock indices was transferred to the crypto market, which also tended to be friendly in an initial reaction on Friday. Meanwhile, the Bitcoin price rose to the top of its sideways phase of USD 21,892, before the renewed profit margin over the weekend to currently around USD 20,400.
The positive development from the previous week does not continue at the beginning of the week in the stock market. Whether the price increase in the previous week was merely a technical recovery movement, and whether the financial markets will recover this week, or whether we have seen a bottom so far, depends to a large extent on fresh key figures from the economy. Below you can read which dates may affect the prices of Bitcoin and Co. in this trading week.
ZEW economic expectations for Germany and the euro area
Tomorrow, Tuesday 12 July at 11:00 (CET), the Mannheim Center for European Economic Research publishes the ZEW Index of Economic Expectations in Germany and the Eurozone. The ZEW index is one of the most important leading indicators of economic development. To this end, more than 350 institutional investors are asked monthly about their assessment of the current economic situation. Experts predict a negative value of -38 for Germany. For the euro area, on the other hand, analysts predict a better value of -28. In the previous month, the ZEW euro area index was still -29.
A value of 0 signals a positive economic development compared to the previous month, while a fall below 0 indicates a negative development. The current expert estimates therefore indicate an unchanged weak economic development for Germany as well as for the euro area. A persistently weak ZEW index could cause the European Central Bank (ECB) to reconsider its planned rate hikes in the coming months.
Consumer price index (CPI) in the middle of the week
The following Wednesday, July 13 at. At 2.30 pm (CET), the Consumer Price Index (CPI) for June is published by the US Bureau of Labor Statistics in the USA. Market participants predict a year-on-year increase of 8.8 percentage points. In the previous month, the increase was still at 8.6 percent. If the expert estimates are exceeded, the pressure on the US Federal Reserve (Fed) will increase further. Fed Chairman Jerome Powell would have to consider further rate hikes to curb runaway inflation.
New producer prices and fresh unemployment figures for the USA
The Producer Price Index (PPI) for the United States will be published next Thursday at 14.30 (CET). The forecasts predict an increase of 0.8 percentage points. In the previous month, the increase in producer prices was already on average 0.8 percentage points. The Producer Price Index (PPI) measures the products and services produced and sold in the United States in relation to the change in transaction prices. A rising PPI also points to higher inflation, which should further increase the strength of the US dollar against the euro. Also at At 2.30 pm (CET), the weekly figures for the first unemployment applications in the United States will be published. 235,000 new initial applications are expected this week. Compared to the previous week, the analyst estimate increases by 5,000 applications. Should the number of initial applications turn out to be higher than expected, this indicates an increasing economic downturn in the United States. A sustained negative development could lead to fiscal easing by the Fed.
US retail sales at the end of the week
On the last day of the trading week, July 15 at. 14:30 (CET), the Census Bureau will present the retail sale for the month of June. These are considered as an important indicator of consumer purchasing power. Most recently, US retail sales were -0.3 percent, well below market participants’ expectations. Despite a decline in the previous month of May, the majority of market participants expect final consumer sales to increase by 0.8 percentage points. A reading below this forecast would indicate persistent consumer fears.
At 4 p.m. (CET), several relevant key figures from the University of Michigan will then be presented. Investors are paying particular attention to consumer expectations of private households in the United States. These are considered a measure of American consumers’ buying behavior. Analysts predict a value of 47.0 for the month of July. This forecast remains at a low for 10 years. Consumer expectations were last rated as low in 2011. In the previous month, consumer expectations were 47.5. If the forecast of 47 is even underestimated, it should again increase the pressure on the Fed. Continued weak consumer behavior on the part of US citizens could cause the US Federal Reserve to provide additional emergency assistance to private households.
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