- We have a very interesting and intense week ahead
- We have detailed economic developments
- And tried to predict developments
We had a mass market carnage over the weekend.. Most tokens have lost about a third of their market value. This shows how seriously the attack of the U.S. government affects the quotations of the cryptocurrency.
The price of BTC, however, managed to hold and protected an important support area of $25,300.. On Sunday night, the major cryptocurrency was trading at around $26,000, about 2% above its weekly low.
For good measure, bitcoin and ether were again the most reliable and least volatile assets. VTS lost about 3% over the weekend and 3.5% over the week. Ether fell slightly more (7% for the week).
The third trading week of June will be the culmination of this trading month. First, the U.S. will announce the latest inflation data. The U.S. Federal Reserve Bank (Fed) will meet on Wednesday for a key interest rate meeting. And by the end of the week, the European Central Bank (ECB) will announce its interest rate decision for the Eurozone. Final EU inflation data for May will close the trading week. Let’s get to the bottom of this.. Fed budget and the continuation of the story with Binance
The U.S. federal budget execution report will be released today at 21:00 Kiev time. It will give more insight into the state of the U.S. economy.
The latest data puts the Fed’s operating losses now at nearly $68 billion. The Federal Reserve pays $800 million in interest daily to banks and money market funds (data excluding reverse repos and IORs).
Today is also the deadline date for Binance US to respond to the SEC’s application for a temporary restraining order. Recall that the regulator wants to freeze the crypto-exchange assets, citing that they illegally transferred funds to customers. So let’s watch how the story unfolds today. Binance and Coinbase problems destabilize the entire cryptocurrency market. So until they are resolved, there is little chance of a bull market starting.
Other metrics on Monday: new credit and money supply in China, industrial data and inflation in India.
Tuesday. U.S. Consumer CPI
The U.S. Bureau of Labor Statistics will release the latest U.S. inflation data for May tomorrow. In April, consumer prices were 4.9%. They fell below the important 5.0% mark for the first time. Market experts now expect a further decline to 4.7%.
It is important that inflation be at or below the forecast. Then the chances of a pause in the Fed’s interest rate adjustment would multiply.
The U.S. financial market should benefit from lower inflation. And ideally, it will also help stabilize the cryptocurrency market.
If inflation is unexpectedly higher than predicted, it will encourage investors to actively get rid of risky asset classes. That is, and from investments in the crypto-sector. There will also be increased fear that the U.S. Federal Reserve will respond with another interest rate hike.
Other metrics on Tuesday: UK labor market data, inflation in Germany and Spain, the ZEW business index in Germany, a speech by Bank of England Governor Bailey.
Wednesday. Fed meeting
On June 14 at 20:00 (Kiev time) there will be a meeting of the Fed. The U.S. financial regulator will announce its latest interest rate decision.
The Fed held a hawkish monetary policy at its previous meeting and adjusted its key interest rate by another 25 points to 5.25 percent.. The big question is what their new decision will be.
In a CME Watchtool poll, only 29% of market participants expect the U.S. to raise the key interest rate again. There are several reasons for this easing.
- The first is the unsatisfactory outlook for the U.S. economy.. The housing market suffers particularly because of high interest rates.
- Second factor.. Jerome Powell was pretty dovish in his last appearance.Among other things, he called the current level of interest rates “quite restrictive.”</nbsp;
- Late comments from U.S. bankers also showed that they favor a scenario of not raising rates.
- In addition, last Thursday’s Labor Department data released. They showed a sharp large increase in U.S. jobless claims.
This all means that a rate hike in June is highly unlikely. But investors will be watching closely for Fed Chairman Jerome Powell’s speech at the 20:30 press conference.</nbsp;
Powell is likely to announce that this is not the end of the rate hike cycle.After all, US inflation is still far from the Fed’s 2% target and the labor market, although weaker, is still very strong.
Hence, after Powell’s speech we should prepare for more market volatility.</nbsp;
Other Wednesday metrics: trade balance, UK GDP and industrial production, monthly IEA report, EU industrial production data.
Thursday. ECB meeting
The European Central Bank (ECB) will publish its latest key interest rate decision for Europe on June 15. The previous month, they raised it by 25 basis points to 3.75%.
Most market analysts expect to raise the interest rate another 0.25% to 4.0% this year.. However, this is unlikely to happen at the next meeting. The fact is that last week the European economy officially slipped into a technical recession (showing a drop in GDP for two months in a row). ECB chief Lagarde must act with increasing caution to protect the ailing EU economy.
If the ECB raises its key interest rate by another 25 basis points, the euro/dollar exchange rate should first strengthen and then stabilize. Theoretically, this would also strengthen bitcoin, which also rivals the strength of the dollar.
Investors will also be listening closely to a press conference from Christine Lagarde, which will take place at 2:45 p.m.. Any harsh statements by the ECB head should lead to increased volatility in stock markets and thus in the crypto sector.
Other metrics on Thursday: industrial production and retail sales in China, PPI Prominflation in Switzerland, retail sales and regional indices NY Empire State and Philadelphia Fed from the U.S., industrial production and retail sales in the United States, Initial Jobless Claims in the United States.
Friday. Eurostat data
June 16 Eurostat publishes CPI consumer inflation data. In the preliminary release it was 6.1%, lower than the expert forecast of 6.3%. However, as consumer prices in the U.S. continue to fall, we can expect a surprise here.
If the final consumer prices for May come in below experts’ expectations, a positive price reaction on the European stock market is possible.. This could also help the growth of cryptocurrencies.
If consumer inflation comes in above analysts’ forecasts, it would be a major blow to the eurozone. In this case, we expect a correction in the European stock markets.
Other metrics on Friday include the Bank of Japan’s interest rate decision and the Central Bank Governor’s press conference, and the U.S. Consumer Sentiment.. To do this, don’t forget to follow our website and social networks. We wish everyone a productive work week.