After investors focused on the quarterly figures of large US technology companies in addition to relevant economic data in the last few weeks of trading, the focus in the second week of August will primarily be on fresh data on inflation and consumer behavior in the USA. If the trends of the last few weeks and months solidify and inflation continues to rise, the probability of further interest rate adjustments in the USA increases.
For the forthcoming interest rate decision in September, however, the US Federal Reserve must also keep an eye on the consumer behavior of US consumers in order not to stifle demand for consumer goods. As a consequence, this would continue to have a negative impact on economic development in the USA. You can read in the following overview article which economic data from Europe and the USA could have an impact on the price development of BTC, ETH and Co this week.
Consumer price index in the US midweek
This week’s numbers don’t start until Wednesday, August 10th. At 2:30 p.m. (CET), the US Bureau of Labor Statistics publishes the consumer price index (CPI) for the month of July in the USA. Market participants forecast a year-on-year increase of 8.9 percentage points.
In the previous month, the increase was 9.1 percent. The experts are therefore currently expecting a lower increase in July than in the previous month. If the expert estimates are exceeded again, as in the previous month, the pressure on the US Federal Reserve (Fed) will increase further. Fed Chair Jerome Powell is then likely to consider higher rate hikes than planned to curb persistently high inflation.
New producer prices for the US on Thursday
The following Thursday, August 11, at 2:30 p.m. (CET) the US Producer Price Index (PPI) will be released. Market experts forecast an increase of 0.5 percent. In the previous month, the increase in producer prices had averaged 0.4 percentage points and was thus below the expert estimate of 0.8 percent.
The Producer Price Index (PPI) measures the products and services produced and sold in the US in terms of the change in transaction prices. A rising PPI points to higher inflation, which could further fuel the US dollar’s strength against the euro. The Fed should also keep a close eye on this data and take it into account in its interest rate decision for September.
Industrial production data in Europe at the end of the week
On Friday 12 August at 11:00 (CET) euro area industrial production figures will first be published by Eurostat. Market participants expect an increase of 0.3 percent. In the previous month, industrial production rose by 1.6 percent, contrary to expectations of 0.3 percent. Industrial production in the euro zone describes changes in the production output of companies in Europe. The manufacturing industry in particular is considered to be susceptible to economic changes, which is why this indicator reliably reflects forthcoming changes in economic cycles.
When economic activity picks up speed, so does industrial production. On the other hand, if the economy weakens, this also has a negative effect on production output. Rising industrial production usually leads to a rising euro exchange rate. Conversely, the value of the euro falls if the expert estimates are clearly missed. Sustained solid industrial production would also give the European Central Bank (ECB) more scope for the planned interest rate hike in September.
University of Michigan figures on consumer expectations
At 4:00 p.m. (CET) on the same day, several relevant key figures from the University of Michigan will be presented. Market participants are paying particular attention to consumer expectations in private households in the USA. These are considered important parameters for the purchasing behavior of American consumers.
The analysts forecast a value of 47.0 for the month of August, which, like in the previous month, is at a 10-year low. In the previous month, consumer expectations were at 47.3. If this forecast is significantly undercut, the pressure on the Fed will increase further. Jerome Powell could find himself increasingly forced to implement fiscal measures to ease the burden on private households.
New US consumer confidence data
Also at 4:00 p.m. ET, the University of Michigan will release new consumer confidence data for the month of August. Consumer confidence reflects consumers’ optimism about economic development in the USA. Consumer confidence is considered a valid leading indicator for consumer spending and points to economic turning points at an early stage.
The forecast for the month of August is 52.0, slightly above the current reading from July. This was 51.5 in the previous month. If consumer confidence is above the anticipated value, this is a first indication of a possible improvement in consumer spending. On the other hand, if this key figure turns out to be weaker, this is a further indication of a weakening of consumer spending in the USA. The Fed should also take this development into account in its planned rate hikes.