Inflation in July was lower than analysts had previously expected, sending crypto market prices higher in last week’s trading. Key cryptocurrency Bitcoin (BTC) briefly rose to $25,000 and is trading a good 3 percent higher at around $24,000 in a 7-day comparison today, Monday, despite some slight profit-taking. Ethereum (ETH) also benefited from the recovery in the classic financial market, rising to a new high of US$2,040 last weekend. The second largest cryptocurrency thus reached its first important price target.
In addition to US inflation, which has eased slightly recently, investors are focusing on fresh data on US retail sales and the Eurozone CPI this trading week. Whether the positive price development from the previous week continues this trading week will again largely depend on key economic figures. You can read in the following overview article which economic data from Europe and the US can influence the price development of Bitcoin, Ethereum and Co. in this week.
Building permits in the US at the start of the week
Tomorrow, Tuesday 16 August, at 14:30 (CET), the Consensus Bureau will first publish the number of building permits for the month of July in the US. The experts’ forecast is 1.640 million after 1.696 million new permits in the previous month of June. Building permits are considered a leading indicator of the US housing market. If the granted building permits exceed the experts’ expectations, it indicates a continued robust real estate sector in the United States. A continued strong housing market could bolster the Fed’s view of carrying out further rate hikes as planned. A robust housing market should therefore have a negative impact on the US stock market and the crypto market in an initial price reaction.
Mid-week US retail sales
Wednesday 17 August at 14:30 (CET) the US retail sales for the month of July will be published. Retail sales are considered to be an important indicator of consumer buying sentiment. Most recently, sales in the US retail trade of +1.0 percent were significantly stronger than the experts had expected. Market participants expect an increase of 0.1 percentage points for the month of July. If the forecast tops out again and US consumer sentiment remains robust, the Fed should confirm this in its plan to raise interest rates three more times before the end of the year. 20:00 (CET) the FOMC meeting minutes from the US central bank for the last central bank meeting in July will be published. Investors hope for further relevant information about the economic situation and the future monetary policy of the Fed. Increased volatility on the financial markets must therefore be expected on Wednesday evening.
Consumer Price Index (CPI) for the Eurozone on Thursday
Thursday 18 August at 11:00 (CET) the consumer price index (CPI) in the euro area for the month of July is first published. The analysts predict a year-on-year increase of 8.9 percentage points. The estimate is thus again at the same level as the previous month. If inflation turns out to be lower than expected, as was the case recently in the US, the pressure on the ECB will at least ease a bit. In a first reaction, stock indices in Europe and the US should continue to rise and also drag the crypto market north with them. However, ECB chief Lagarde will not be able to deviate from her policy of planned rate hikes in the coming trading months. The ECB is still far from the target of an annual inflation of two percent.
US home sales close out this week’s round of data
Also Thursday at 16.00 (CET) there will be fresh data on existing home sales in the US. Existing home sales describe the monthly sales of existing homes in the United States. Analysts expect the number of home sales to continue to decline in July. The market experts expect 4.89 million. sales. In the previous month of June, 5.12 million houses had changed hands.
Since existing home sales account for about 90 percent of the U.S. housing market, this metric is an important component in assessing U.S. consumer spending. If the number of homes sold is higher than expected compared to the previous month of June, it indicates an initial stabilization in the recent weak housing market.
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