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The key cryptocurrency Bitcoin (BTC) is still not making any lasting progress and in the weak trading week before Easter remained unchanged around 28,000 US dollars in its trading range of the past few weeks. The stock markets also showed no clear direction and recently moved in a narrow sideways range. As long as the BTC price does not form new historical lows and the buyer side can continue to defend the area around $ 26,500, directionless trading is likely to continue. In particular, however, investors should keep a close eye on the increasing political tensions in the China-Taiwan conflict. A significant escalation should lead to increased selling on the stock markets. Since the US dollar index (DXY) could also gain strength as a result, this would also mean additional headwind for the Bitcoin price. The most important bitcoin price levels that investors should now keep an eye on are discussed in the last bitcoin price analysis from March 28th.
The following economic data will be relevant this week
The trading week after Easter only really gets going on Wednesday. First, investors are looking at the final US inflation data for March. On Wednesday evening, market participants expect the publication of the FOMC meeting minutes for the last Fed meeting to provide additional information on the US Federal Reserve’s position in the coming months. Updated US producer prices and initial jobless claims follow on Thursday. The trading week ends with the presentation of the latest US retail sales for the previous month of March.
Final US consumer price indices
Wednesday, April 12, 2023: At 2:30 p.m., the US Bureau of Labor Statistics will present the final US inflation data for the past month of March. In February, the year-on-year inflation rate of 6.0 percent was in line with expert estimates and continued to fall compared to the previous month. For the month of March, the analysts are now expecting a decline to 5.2 percent. If the analysts’ expectations are confirmed, the rate of inflation would continue to approach the current key interest rate level. After the most recent hike of 25 basis points on March 22, key interest rates are currently between 4.75 percent and 5.0 percentage points. If the inflation rate continues to fall as forecast, the stock markets could respond positively to this development. In view of the poor labor market data in the past week, the negative outlook of an increased probability of an imminent US recession could nevertheless prevail. If the estimates are also missed and the consumer price indices are above the experts’ opinions, the US dollar should continue its recovery trend of the last trading days in the week before Easter. A strengthening US dollar would again mean headwinds for the stock and crypto markets. Investors will also look at the core inflation rates that are also presented. Contrary to expectations, this was above the forecasts in a monthly comparison. However, another decline from 0.5 percent to 0.4 percent is expected for March.
Fed meeting minutes (FOMC) on Wednesday evening
Wednesday, April 12, 2023: At 8:00 p.m., the US Federal Reserve publishes the minutes of the last interest rate decision on March 22nd. Investors are hoping for further insights into how the US monetary authorities assess the current inflation problem. At the last Fed meeting, Fed Chairman Powell again emphasized that he was not planning any key rate cuts in 2023, but some market players recently had doubts about this. In recent weeks, an increasing number of investors have been speculating on a possible interest rate cut by the Fed and new quantitative easing (QE) measures. In addition, the minutes could provide further information on how Fed members intend to master the US banking crisis and the resulting liquidity shortages. In particular, market players will look in the minutes of the meeting for clues about the details of the deployment criteria for further interventions and what additional measures the Fed could take if necessary.
US Producer Prices and Initial Jobless Claims
Thursday, April 13, 2023: At 2:30 p.m. (CET), the US Bureau of Labor Statistics will publish the current US producer price indices (PPI) for the past month of March. After producer prices were 0.4 percent below analysts’ expectations and even moved into negative territory for the first time since November at -0.1 percent in a monthly comparison, the market experts expect a slight increase of +0.1 for the previous month of March Percent. If the analysts’ expectations are undercut, as was the case recently, the likelihood of a more dovish interest rate policy by the US central bank in the second half of the year will increase further. However, it remains to be seen whether this development will motivate investors to invest more in equities and cryptocurrencies. Recently, the focus seems to be more on the numbers on the US job market. If the producer price forecasts are met or even exceed expert expectations, this would be poison for US stocks. Headwinds for the stock market are likely to increase further as the US dollar recovers.
At the same time, at 2:30 p.m. (CET), investors will be looking at the weekly data on initial jobless claims in the USA. In the previous week, these were again well above expectations. In addition, the numbers from March 30 were subsequently revised upwards by more than 20 percent to 246,000. These weakening tendencies in the US job market were already apparent in the week before Easter with a significantly weaker than forecast JOLTS job report and weak NFP job market data. If the current figures on initial jobless claims confirm this trend, it would be another warning signal for the long-awaited US recession. The analysts expect 205,000 new initial applications. If this forecast is exceeded again, the stock market is likely to react with price reductions. A one-off effect due to public holidays and vacations cannot be ruled out. Investors should only breathe a sigh of relief in the short term if the number of initial applications were to drop significantly. This could lead to a recovery reaction on the markets.
US Retail Sales to close the week
Friday, April 14, 2023: At 2:30 p.m. (CET), the US Census Bureau presents the latest US retail sales for the month of March. They are considered an important measure for calculating the purchasing mood of private households. Most recently, the already weak expert estimate of -0.3 percent compared to the previous month was even undercut with -0.4 percent. If the buying mood of private households weakens again and, as forecast for March, falls again by -0.4 percent or even more, investors are likely to continue to act cautiously. Investors could want to part with risky asset classes in particular and also put the crypto market under pressure. If, on the other hand, retail sales are above analyst forecasts, a recovery movement on the stocks and crypto market would be conceivable at the end of the week.