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Higher than forecast building permits in the USA (1.67 million vs. 1.65 million) caused a short-term trend reversal on the American stock market on Tuesday last week. Investors took profits after the bear market rally over the past few weeks, selling off the S&P500 and Nasdaq100. Together with the better-than-expected US retail sales (0.4 percent vs. -0.1 percent), this continued robustness in consumer sentiment in the US should US Federal Reserve encourage them to stick to the planned rate hike policy.
Some experts are already assuming that Fed Chair Jerome Powell could raise interest rates in the three remaining interest rate steps by the end of the year by up to 50 basis points more than was last rumored at the press conference. The correction in the classic financial market was also transferred to the crypto sector in the past trading week. The BTC price (BTC) corrected by 15 percentage points at the top and briefly slipped to the last historical low at USD 20,800 before the price rose back above USD 21,300 just before the end of the week. Once again, the course of the US stock indices showed a great parallel to the course of BTC. This week’s economic data should provide a first indication that the asset-wide price recovery of the past few weeks may have come to an end for the time being and that the market is likely to continue to recover.
For the coming trading week, investors should pay particular attention to the publication of the latest US gross domestic product (GDP) figures. In addition, the announcement of the PCE core rate should be followed with great interest by market participants. Whether the current price consolidation on the global financial markets will continue this week depends largely on key economic data, as it did recently. You can read in the following overview article which other economic data from Europe and the USA could have an impact on the price development of BTC, ETH and Co. this week.
US new single family home sales data
Numbers week begins tomorrow, Tuesday, August 23, at 2:30 p.m. (CET) with new home sales. The data released monthly by the US Department of Commerce reflects the current level of consumer spending. Higher than forecast sales figures indicate an improvement in the recently falling consumer confidence in the USA. However, should home sales come in weaker than the 575k single-family homes forecast by the experts, this would point to a further deterioration in consumer confidence. In the previous month, the number of houses sold was 590,000. The experts pay more attention to the figures for the sales of new houses than the development of the sales of existing properties. If demand continues to weaken on the recently stumbling housing market, the central bank may have to adjust its current monetary policy. A stabilization of the real estate sector, on the other hand, would give the Fed more scope for further interest rate adjustments.
US Durable Goods Orders figures midweek
On Wednesday, August 24th at 14:30 (CET) the new orders for durable goods will be released adjusted for means of transport. In order to be able to correctly assess a trend in incoming orders at US companies, orders from the volatile aircraft sector are excluded from the so-called core rate. The experts suspect a 0.2 percent increase in incoming orders compared to the previous month. In July, the value was still 0.4 percent. Falling orders for durable goods indicate growing caution and uncertainty among buyers about the development of economic demand. If, contrary to expectations, the forecast is exceeded, this indicates continued robustness of the US economy. The Fed would see this as a further argument for their planned rate hike policy.
US gross domestic product figures for the second quarter of 2022
On the following Thursday, August 25, at 2:30 p.m. (CET), the US gross domestic product (GDP) figures for the second quarter of 2022 will follow. Gross domestic product (GDP) is the most important economic indicator and describes the sum of the in a Goods and services produced in the country less intermediate services rendered. Based on the GDP data, economists can draw conclusions about the current economic strength of a country. After -0.9 percent in the previous month of July, the experts are forecasting a slightly lower contraction of the economy by -0.8 percentage points in August. Compared to a value of -1.6 percent in June, this value would mean a slight improvement. The Fed in particular is likely to hope that it will be able to successively raise key interest rates as planned. On the other hand, if the recession in the USA with a worse GDP figure should deepen, the top monetary watchdogs would have to reconsider their current monetary policy.
US core PCE data closes the trading week
On the last day of the trading week, August 26, the core rate of household consumption spending will be released. The data published at 2:30 p.m. (CET) on changes in the price of services and goods excludes price changes for energy and food. In the previous month, the PCE inflation rate was 0.6 percent compared to the previous month. The Fed uses the PCE price index as the preferred measure for assessing the price pressure on citizens. If the PCE index for the current month turns out to be higher than expected, it would be doubly bad for the financial market. The Fed would have to continue to pursue its interest rate policy consistently in order to combat inflation. In addition, the US dollar would continue to gain strength, which is also detrimental to the prices of BTC and Co.