This will be important for crypto and bitcoin this week

The global financial market is looking forward to the publication of key interest rates by the US Federal Reserve in the middle of the week. While key cryptocurrency Bitcoin (BTC) was able to rally to the US$24,200 mark in the previous week despite mostly weak economic data, the BTC price slipped back to the key support area of ​​US$21,800 at the start of the week. In addition to the interest rate decision and relevant economic data such as US gross domestic product (GDP) and the consumer price index (CPI) for the euro area, investors are once again focusing on the quarterly figures for major US technology companies such as like Meta and Alphabet this week.

Whether the positive price development from the previous week continues in this trading week will again largely depend on key figures for the current trading week. Below you can read which dates can affect the rates on Bitcoin and Co. this trading week.

Important company figures in focus

With Microsoft and Alphabet, the reporting season kicks off in full force tomorrow, Tuesday. The quarterly figures for the two technology giants provide valuable information about the current demand in information technology. In particular, the outlook for upcoming business figures in the second half of the year should provide information on future global economic developments. Mark Zuckerberg’s Meta Group opens its books to investors midweek. Here, too, investors are hoping for new insight into the extent of advertising on the company’s various social media platforms. Amazon’s quarterly numbers will follow on Thursday. Falling sales at the largest online retailer would also point to an ongoing economic slowdown.

Relevant basics to start the week

The data stream begins tomorrow, Tuesday 26 July at 16:00 (CET) with fresh figures on CB consumer confidence in the US. Consumer confidence reflects consumers’ optimism about the economic development in the United States. The forecast for the month of July is 97.2, again lower than the previous month. In the previous month of June, consumer confidence was 98.7 below the forecast of 100.4. If the analysts’ expectations miss again, it will confirm the economic slowdown in the United States. These developments are likely to bring the Fed back on stage.

The US central bank’s interest rate decision midweek

The Fed’s interest rate decision will be announced on Wednesday, July 27 at 20:00 (CET). Most analysts expect interest rates to rise by 75 basis points to 2.50 percentage points. Due to a recent sharp increase in inflation to 9.1 percentage points in June, some key players now even consider a rate hike of 100 to 125 basis points to be justified. The simultaneously published FOMC statement also provides valuable information on the economic and financial situation in the United States.

Fed Chairman Jerome Powell’s press conference follows at 20:30 (CET). Mr. Powell answers reporters’ questions about the Federal Reserve’s fiscal policy.

US gross domestic product figures for the second quarter

The following Thursday, July 28 at 14.30 (CET) will be followed by data on the US gross domestic product (GDP) for the second quarter of 2022. The gross domestic product (GDP) is the most important economic indicator and describes the sum of the goods and services produced in the US minus those provided advance payments. GDP can be used to draw conclusions about a country’s current economic power. The experts expect an increase of 0.5 percentage points; in the previous month, GDP in the United States was -1.6 percent below investors’ forecasts. If analyst estimates are missed again this month and GDP shrinks again, the US will be in a recession by the current definition. The Fed will then likely have to adapt its current interest rate policy to this situation sooner than desired.

EU consumer prices and core PCE close the week

Friday 29 July at 11:00 (CET) the consumer price index (CPI) for the month of July for the euro area is published first. Market participants are predicting a year-on-year increase of 8.6 percentage points. The consumer price index already stood at 8.6 percent in June. If the expert estimates are even exceeded this month, the pressure on the European Central Bank (ECB) will increase further. When the next interest rate decision is made in September, ECB chief Lagarde may again be forced to raise the key rate more significantly than market participants currently assume.

In the afternoon at 16:00 (CET) follows the announcement of the core PCE interest rate in the US for the month of June. An increase of 0.5 percentage points compared to the previous month is expected. The PCE rate describes the change in the prices of goods and services that US consumers purchased during the reporting period. The prices taken into account in this price index are exclusive of food and energy costs. Changes in the core PCE rate indicate whether there is a persistent risk of inflation or whether the peak has been reached for the time being. For the US central bank, price pressure is a preferred measure to assess the risk of inflation in the US. If the core pace of private consumption exceeds forecasts, the US dollar can be expected to rise further. As expected, this should tend to have a negative effect on the development of the Bitcoin price.

Want to buy cryptocurrencies?

eToro offers investors, from beginners to experts, a comprehensive crypto trading experience on a powerful yet easy-to-use platform.

To the provider

Leave a Comment