Cryptocurrency markets so far have been primarily influenced by crypto-specific events such as SEC lawsuits against Binance and Coinbase. However, in the upcoming week, it seems economic news might take center stage, potentially affecting not just cryptocurrencies, but the entire financial market landscape.
One of the critical events to look out for is the release of the U.S. Consumer Price Index (CPI) for May on Tuesday. Market observers are keen to see if the annual headline inflation slows down from April’s 5.5% rate and the core rate from 4.9%. Persistent high inflation has compelled the U.S. Federal Reserve to keep up with a consecutive string of rate hikes for over a year, which has proved to be a challenge for cryptocurrency markets and Bitcoin in particular.
Arguably, the most-awaited event of the week is the Federal Open Market Committee’s (FOMC) June meeting results, to be released at 2 p.m. (ET) on Wednesday. Currently, traders are pricing in a 75% probability that the Fed will pause the historic series of rate increases, which began in March 2022. The benchmark fed funds rate has moved from 0.00-0.25% to the current 5.0-5.25% during this time. Following the meeting results, Fed Chair Jerome Powell is scheduled to hold a press conference.
Another crucial data release for the week is the Producer Price Index (PPI) for May, set for Wednesday. Though not as closely monitored as the CPI, the headline PPI showed a slowdown to 2.3% in April, with the core rate at 3.4%. This inflation data greatly influences central banks’ policies and market sentiment, significantly impacting investments and asset allocation.
Additionally, on Thursday, the initial jobless claims for the week ending June 10 will be released. This number has been slowly edging higher in the past few months, with last week witnessing a considerable jump of 28,000 claims, reaching an 18-month high of 261,000. Despite the gains seen in monthly nonfarm payroll reports, this recent surge in unemployment claims raises concerns of labor market weakness.
Finally, the European Central Bank (ECB) will reveal its latest rate hike decision on Thursday. The ECB has been aggressively raising rates since last July, as European countries also struggle to control high inflation levels.
In summary, the coming week will see a shift in focus from crypto-specific events to economic news, with key data releases poised to influence both cryptocurrency and traditional markets. Financial enthusiasts eagerly await the outcomes and subsequent market reactions, resulting in a riveting week ahead for market watchers.
Source: Coindesk
