Despite a further downturn in economic expectations in the euro zone and consumer and producer prices in the USA, which again rose more sharply than expected, the share indices continued to rise northward in the past week. Better-than-forecast consumer sentiment in the USA caused many technology stocks in particular to rise in price. The BTC price followed this bullish development and is once again oriented towards the top of the trading range in the $22,400 area.
The positive development of the previous week continued at the start of the week. The key crypto currency BTC is once again trading in the range of the previous week’s highs. The second largest cryptocurrency ETH even got ahead of BTC and broke out of its upward sideways movement, as discussed in the last course analysis. Whether the price increases on the crypto market will continue this trading week will again depend on other key figures from the economy. In addition to the interest rate decision by the European Central Bank (ECB), it is also important to look this week at the forthcoming reporting season for US companies.
Important events for crypto and BTC this week
Consumer price index (CPI) for the euro area
On Tuesday, July 19, at 11:00 a.m. (CET), the consumer price index (CPI) for the month of June in the euro zone will first be published. Market participants are forecasting a year-on-year increase of 8.6 percentage points. This puts the estimate at the level of the previous month. If investors’ forecasts are exceeded, the pressure on the ECB will increase further. ECB Chair Lagarde is likely to come under increasing pressure and consider further rate hikes in the coming trading months to curb persistently high inflation.
Building permits in the USA as an indicator
The building permits in the USA will follow in the afternoon at 2:30 p.m. (CET). The forecast is 1.65 million, after 1.695 million new permits in the previous month of May. Building permits are considered a leading indicator for the housing market in the USA. If the building permits granted exceed expert expectations, this should have a positive effect on the financial market. The crypto market should also benefit from this and be pulled up in the tow of the stock indices.
US Home Sales
At 16:00 (CET) new data on existing home sales in the US for the month of June will be released. Existing Home Sales describe the monthly sales of existing homes in the United States. Analysts expect the number of home sales to continue to fall in June. 5.38 million sales are expected. In the previous month, 5.41 million houses had been sold.
Existing home sales make up around 90 percent of the American housing market, which is why it’s used as an important metric for measuring consumer spending. If the number of homes sold is higher than expected, this indicates increasing consumer spending. Home sales thus reflect confidence among consumers.
Quarterly figures from Tesla as a good benchmark for the economy
After hours at 10:10 p.m. (CET), the quarterly figures from the car manufacturer Tesla will be presented. Since Tesla itself holds a significant BTC position, Tesla’s numbers are also relevant to the crypto market. If Tesla misses analyst expectations and falls short of the forecast of $18.26 billion in sales, this is another relevant indication of a weakening economy. Investors should also pay attention to the business outlook for Tesla. If this continues to cloud over, Tesla’s share price is likely to extend the correction of the past few months again. This should also weigh on the price of BTC.
ECB interest rate decision on Thursday
Thursday starts with the ECB’s interest rate decision at 2:15 p.m. (CET). Market participants are eagerly awaiting whether the European Central Bank will raise interest rates for the euro zone by 25 basis points as announced, or whether Ms. Lagarde will surprise the market and hike interest rates more than previously planned. The consumer price index for the euro zone already published on Tuesday could provide an initial indication of this. At the ECB’s official press conference, which also begins at 2:15 p.m. (CET). Investors are hoping for new information on how the European Central Bank assesses the economic and monetary situation in the euro zone. Market participants are hoping that Lagarde’s statements will allow them to draw new conclusions about the future monetary policy of the ECB in the coming months.
Publication of the Philly Fed index in the USA
At 2:30 p.m. (CET) follows the Philly Fed manufacturing index, which describes the situation in the manufacturing sector in the Philadelphia area. Analysts are forecasting a reading of -2.5, up from -3.3 in the previous month. Index values above 0 indicate a positive development of the industrial companies compared to the previous month, while a value below 0 means that the companies’ business development is expected to be negative. The Philly Fed Index is considered an important leading indicator for the ISM Purchasing Managers Index, which is presented the following day. If the Philly Fed index comes out better than expected, it could signal a stabilization in the US economy, reducing the likelihood of a potential recession later this year.
Purchasing managers in the euro zone and the US at the end of the week
On the last day of the trading week, July 22nd, at 10:00 a.m. (CET) in the morning, various Purchasing Managers’ Indices (PMI) for the manufacturing sector and the service sector will be published. The composite Purchasing Managers’ Index (PMI) for both manufacturing and non-manufacturing reflects the state of the eurozone’s manufacturing and services sectors. The index consists of information on business, employment, order, inventory and price trends in the manufacturing and service sectors.
This index is based on a survey of 300 purchasing managers and company bosses in Europe and is considered one of the most influential economic indicators among investors. Expectations for the month of July are 51.0 after the index was 52.0 in the previous month. A falling value indicates a contraction in economic activity in the euro zone and increases the likelihood of a recession in the euro zone and associated monetary policy measures by the ECB.
US purchasing manager indices in view
On Friday afternoon at 16:00 (CET) the ISM Purchasing Managers’ Index (PMI) for both the service sector and the manufacturing sector will be published. The Institute for Supply Management presents the results of the monthly survey of 370 purchasing managers and company bosses from 62 branches of industry. The forecasts of the experts for the month of July are each 52.0. In the previous month of June, these were still 52.7. Falling PMI numbers mostly have a negative impact on the US dollar and therefore support the BTC price.