The profit-taking that began in mid-August on the European and US-US stock indexes continued unabated in the past trading week. Better-than-expected pending home sales and a slower decline in US gross domestic product give the US central bank more leeway in trying to reduce persistently high inflation to the long-term target of 2 percent. At the Jackson Hole meeting on Friday, Fed Chairman Powell reiterated the Fed’s intention to implement further significant rate hikes to bring inflation under control. In doing so, he clearly rejected the demand from some market participants that the Fed should reconsider its hawkish monetary policy. Rather, the American economy must according to Powell prepare for a difficult development in the near future. Immediately after the Fed chief’s announcements, investors sold their investments on a large scale, sending global financial markets into endless motion.
The price of Bitcoin (BTC) corrected significantly and fell back to the 2017 all-time high in the psychological price range of US$20,000. Ethereum (ETH) also saw a price reset about two weeks before “The Merge” to its highest level of 2017. After a volatile last week of trading with significant price corrections, market participants are looking at new data on CB consumer confidence in the coming trading days should the big US labor market report at the end of the week provide new price impulses. You can read in the following overview article which other economic data from the Eurozone and the United States can also influence the price development of Bitcoin, Ethereum and Co. in this week.
CB Consumer Confidence provides new insights into the behavior of US end users
The flurry of numbers starts tomorrow, Tuesday 30 August, at 14:30 (CET) with fresh figures on CB consumer confidence in the US. Consumer confidence reflects consumers’ optimism about the economic development in the United States. With 97.5, the forecast for the month of August is above the published figures for the previous month. In July, consumer confidence was 95.7, below the 97.2 forecast. If analysts’ expectations are missed again and consumer confidence falls again, the economic slowdown in the US will continue to be confirmed. The American central bank will therefore follow the development of consumer confidence closely and take it into account when it makes its next interest rate adjustments.
Investors are also awaiting the decision from the Security and Exchange Commission (SEC) on Tuesday on the application for a Bitcoin spot ETF from Cathie Woods’ company ARK-Invest. However, since all applications to list a Bitcoin Spot ETF were rejected by the SEC until recently, approval by the SEC is currently considered unlikely. If, on the other hand, the SEC issues a release, this should initially have a bullish effect on the price development of Bitcoin and the entire crypto market.
Consumer price index for the euro area midweek
On the last trading day of the month, 31 August at 11:00 (CET), the consumer price index (CPI) for the month of August for the euro area is published. Market participants are predicting a year-on-year increase of 9.0 percentage points. In the previous month of July, the consumer price index was 8.9 percent above the forecast of 8.6 percent. If the expert estimates are again exceeded, the pressure on the European Central Bank (ECB) is likely to increase further. ECB chief Lagarde may have to raise the key rate more sharply when the next interest rate decision is made on September 8 to counter persistently high inflation in the eurozone. A consumer price index that is high again is another bearish indication of the price development of risky asset classes such as the crypto market.
PMI PMI and US jobs data close first week of trading in September
On Thursday, September 1, investors will watch the release of the ISM Manufacturing Purchasing Managers’ Index (PMI) for the United States. 16:00 (CET) the Institute for Supply Management in the USA will present the results of the monthly survey of 370 purchasing managers and company managers from 62 industries. The experts’ current forecast for the month of August is 52.6. In the previous month, the index was still at 52.8. Falling PMI figures are usually negative for the US dollar. Another weak PMI could affect the planned interest rate policy of the US central bank in the coming months.
At the end of the week of September 2, at 2:30 p.m., are the non-farm payrolls (NFP) figures for the US for the month just ended. The NFP figures describe the monthly change in the number of employees excluding employees in agriculture. The NFP data is considered to be the most important and meaningful number among the US economic indicators. The forecast for August is only 250 thousand newly created jobs. In July, the number of newly created jobs was 528 thousand. If even the significantly reduced expert estimates are undercut, this would be a clear indication of a slowdown in the US economy. Once again, Fed Chair Powell would have to take these negative labor market developments into account in future interest rate decisions to prevent a complete collapse in US economic development.
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