After a bearish previous week with new distinctive lows on the classic financial markets as well as on the crypto market, BTC and Co. start the new trading week with positive signs. You can read below which dates in the new trading week could influence prices in the crypto sector.
Consumers and their behavior are the focus this week
Relevant data on sales of existing homes in the USA for the month of May will already be published today, Tuesday. Existing Home Sales indicate monthly sales of existing homes in the US. Analysts expect the number of home sales to continue to decline when the announcement is made at 4:00 p.m. (CET). 5.39 million sales are expected in the May 2022 calculation period. In the previous month, 5.61 million houses changed hands.
Existing home sales make up about 90 percent of the American housing market, which is why it’s used as a key 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. In addition to retail sales, this key figure is an important indicator of the buying mood of end consumers.
UK consumer prices and Fed Chair Powell’s mid-week statement
On the following Wednesday, June 22nd, the Office for National Statistics in the United Kingdom (UK) publishes the consumer price index for the month of May at 08:00 (CET). Market participants are forecasting an increase of 0.6 percent compared to the previous month. A higher reading is likely to further increase pressure on the Bank of England (BOE) and necessitate further rate hikes.
Also on Wednesday, at 3:30 p.m. (CET), the head of the US Federal Reserve, Jerome Powell, will comment on current US fiscal policy. In addition, Powell is likely to give an outlook on possible developments in monetary policy measures by the Fed in the coming months. Statements by the head of the Fed are traditionally accompanied by increased volatility on the financial markets.
Weekly Unemployment Numbers and Current Crude Oil Inventories for the US
On Thursday, June 23 at 14:30 (CET) the number of initial jobless claims in the US will be announced. 225,000 new initial applications are currently expected. Compared to the previous week, this estimate is around 11,000 initial applications higher than on June 16th. If the forecast is exceeded and more citizens in the US file for unemployment benefits, the Fed could again consider fiscal easing to counteract a renewed deterioration in the labor market situation.
Later in the afternoon at 17:00 (CET) the weekly US Crude Oil Inventories will be released. Traders forecast for the week is 1,956 million barrels of crude oil. Lower demand together with rising inventories is seen as an indication that economic activity in the USA appears to be cooling off. This development makes a recession increasingly likely.
Michigan consumer confidence index in focus
On the last trading day of the week, June 24, at 4:00 p.m. (CET), several relevant key figures will be presented. First, market players look at several key data published by the University of Michigan. In particular, attention should be paid to the consumer expectations of private households in the USA. They are considered a measure of the purchasing behavior of American consumers. The analysts forecast a value of 46.8 for the month of June. This forecast is at a 10-year low. Consumer expectations were last rated so low in 2011. If this value is even undercut, the Fed should come back into action again in the medium term. A further decline in consumer behavior among US citizens could prompt the US Federal Reserve to provide further relief for private households.
Other US household consumer spending metrics
In addition to consumer expectations, US new home sales for the month of May will be announced at 16:00 (CET). This key figure is to be evaluated in a similar way to house sales of existing homes. Market players estimate that 585,000 new homes will be sold in May. If this value is lower than the experts’ forecast, this can be seen as a further indication of falling consumer spending in private households. Here, too, the US Federal Reserve would have to create new incentives in the medium term in order to increase consumer confidence and thus consumer spending again in the medium term.
Continued weak economic data in the US increases the likelihood of a fiscal policy U-turn by the Fed. Monetary easing by the US Federal Reserve should also have a positive impact on the crypto market and help calm global financial markets.