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Despite further interest rate increases by the US Federal Reserve (Fed) and the European Central Bank (ECB), the stock and crypto markets were unimpressed and trended sideways. Good quarterly figures from Apple and unexpectedly strong US labor market data led to a recovery of the US stock indices at the end of the week on the classic financial market, which also pulled the crypto sector north. Once again, however, the Bitcoin price failed to recapture the important 30,000 USD mark and ended the trading week almost unchanged in the 29,000 USD range. However, the key crypto currency is still lying in wait and within striking distance of its annual high. Which course levels are likely to be relevant for
Bitcoin in the coming trading days can be read in the new course analysis from May 2nd. Only the precious metal gold was able to rise to a new all-time high in the course of the ongoing banking crisis in the USA and in the meantime reached the mark of 2,082 US dollars before consolidation began here as well.
The following economic data will be relevant this week
With the announcement of new inflation data for the USA, the trading week only really gets going in the middle of the week on Wednesday. The current US producer prices for the past trading month of April follow the next day. The second week of trading in May will end with new data from the University of Michigan on consumer expectations and consumer confidence in US private households.
CPI consumer prices in the US
Wednesday, May 10, 2023: At 2:30 p.m. (CET), the US Bureau of Labor Statistics will present the final US inflation data for the past month of April. In the previous month, the year-on-year inflation rate was 5.0 percent, below the forecast of 5.2 percent, further declining. For the month of April, the experts do not expect any change compared to the last figures. Market experts expect stabilization at 5.0 percent. If the analysts’ expectations are confirmed or even undercut, the stock and crypto market could continue to stabilize and the overall upward movement could continue.
In view of the good US labor market data in the past week, this could be interpreted as the next indication of market stabilization. If, contrary to expert forecasts, the consumer price indices are higher than estimates, the US dollar is likely to start stabilizing. A recovery in the US dollar index (DXY) could mean headwinds for the Bitcoin price in particular.
US producer prices in the second half of the week
Thursday, May 11, 2023: At 2:30 p.m. (CET), the current US producer price indices (PPI) for the previous month of April will be presented. The analysts are expecting a significant month-on-month increase of 0.8 percent from -0.3 percent last time to 0.5 percent. This means that production prices, which have been gradually declining recently, would rise again significantly.
The last time producer prices had risen so sharply was in January. If the price increases increase as the experts expect, a positive reaction from the US dollar can be expected, which could subsequently have a negative effect on the stock and crypto market. If, on the other hand, the producer price indices are below the estimates of the market experts and the US dollar index continues to lose strength, as in the past few weeks, this would reduce the pressure on Bitcoin and Co. and could lead to a bullish price reaction on the crypto market.
Consumer expectations and US consumer confidence at the end of the week
Friday, May 12, 2023: At 4:00 p.m. (CET), market participants look at the preliminary releases on consumer confidence and consumer expectations for private households for the current month of May. The consumer expectations published by the University of Michigan reflect the level of consumer optimism about economic development in the USA. At the final release for April, household confidence was down significantly at 60.5. For the first forecast in May, the expert estimate of 59.8 is slightly below the final figures of the previous month.
This could point to an economic downturn in the coming months. However, the recent strong labor market data could also provide a surprise. Positive US consumer expectations would indicate an increase in consumer behavior in the US and have a positive impact on the stock markets and the crypto sector.
The expected figures for consumer confidence are expected to be weaker again for the first time after stable previous months. At 63.0, the first estimate for the trading month of May is below the final figures for April. In the previous month, consumer confidence still had a value of 63.5. If the decline in consumer confidence is confirmed and the expert forecasts are even undercut, a price consolidation on the markets can be expected as an initial reaction. However, since the US dollar could also continue to weaken, an increase in the prices of Bitcoin and Co. is conceivable.
On the other hand, if consumer confidence rises against expectations and is in the range of the data from April, it remains to be seen how the crypto market will react. Paradoxically, this could also be positive, since positive consumer confidence indicates an increased willingness of households to make new investments. If private households continue to have confidence in economic development in the USA despite the difficult economic outlook, this would again underpin the resilience of the first four months of trading.
