The profit-taking that began in mid-August on the European and US-American stock indices continued unabated in the past trading week. Better-than-expected pending home sales and a slower contraction in US gross domestic product give the US Federal Reserve more leeway in trying to reduce persistently high inflation to the long-term target of 2 percent. At the Jackson Hole meeting last Friday, Fed Chairman Powell reiterated the Fed’s intention to carry out further significant interest rate hikes in order to get the inflation rate under control. In doing so, he agreed to the demand by some market participants that the Fed should hawkish monetary policy reconsider, a clear rejection. Rather, the US economy must according to Powell prepare for a difficult development in the near future. Immediately after the Fed head’s announcements, investors sold their investments on a large scale and sent the global financial markets into a tailspin.
The BTC price corrected significantly and fell back to the 2017 all-time high in the psychological price range of 20,000 US dollars. ETH also saw a price reset around two weeks before “The Merge” to its high of 2017. After a volatile last week of trading with significant price corrections, market participants are looking at fresh data on CB consumer confidence in the coming trading days the large US labor market report at the end of the week should provide new price impulses. You can read in the following overview article which other economic data from the euro zone and the USA could also have an impact on the price development of BTC, ETH and Co. this week.
CB Consumer Confidence provides new insights into US end-user behavior
The flood of numbers starts today, Tuesday, August 30, at 2:30 p.m. (CET) with fresh figures on CB consumer confidence in the USA. Consumer confidence reflects consumers’ optimism about economic development in the USA. At 97.5, the forecast for the month of August is above the published figures for the previous month. In July, consumer confidence was 95.7, below the 97.2 forecast. If analyst expectations are missed again and consumer confidence falls again, the economic downturn in the USA will continue to be confirmed. The US Federal Reserve will therefore monitor the development of consumer confidence closely and take it into account when making its next interest rate adjustments.
Investors are also awaiting the decision of the Security and Exchange Commission (SEC) on Tuesday on the application for a BTC spot ETF from Cathie Woods’ company ARK-Invest. However, since all applications for the listing of a BTC Spot ETF were rejected by the SEC until recently, approval by the SEC is currently considered unlikely. If, on the other hand, the SEC issues a release, this should initially have a bullish effect on the price development of BTC and the entire crypto market.
Consumer price index for the euro area midweek
On the last trading day of the month, August 31, at 11:00 a.m. (CET), the consumer price index (CPI) for the month of August for the euro zone is published. Market participants are forecasting a year-on-year increase of 9.0 percentage points. In the previous month of July, the consumer price index was 8.9 percent above the forecast of 8.6 percent. If the expert estimates are exceeded again, the pressure on the European Central Bank (ECB) is likely to increase further. ECB boss Lagarde could have to raise the key interest rate more sharply when the next interest rate decision is made on September 8th in order to counteract persistently high inflation in the euro area. A consumer price index that is again high is another bearish indication of the price developments of risky asset classes such as the crypto market.
PMI PMI and US jobs data close first week of trading in September
On Thursday, September 1st, investors will be watching the release of the ISM Manufacturing Purchasing Managers’ Index (PMI) for the US. At 4:00 p.m. (CET), the Institute for Supply Management in the USA will present the results of the monthly survey of 370 purchasing managers and company bosses from 62 branches of industry. The experts’ current forecast for the month of August is 52.6. In the previous month, the index was still at 52.8. Falling PMI numbers are usually negative for the US dollar. Another weak purchasing managers’ index could influence the planned interest rate policy of the US Federal Reserve in the coming months.
At the end of the week on September 2, at 2:30 p.m., are the non-farm payrolls (NFP) figures for the US for the month just ended. THE NFP figures describe the monthly change in the number of employees excluding employees in agriculture. The NFP data is considered to be the most important and meaningful number among the US economic indicators. The forecast for August is only 250 thousand newly created jobs. In July the number of newly created jobs was 528 thousand. If even the significantly reduced expert estimates are undercut, this would be a clear indication of a slowdown in the US economy. Once again, Fed Chairman Powell would have to take this negative development on the labor market into account when making future interest rate decisions in order to prevent a complete collapse in economic development in the USA.