- In terms of macro data, it will be a quiet week
- Powell’s speech to the U.S. authorities will play a key role
Last week bitcoin dropped below $25K for the first time in 3 months. We saw a lot of liquidation of leveraged long positions, as well as mass panic. But at the end of the week the buyers cheered up and raised the price of BTC up to $26 500.. It happened because the Fed did not raise the interest rate. Additional positive news for bitcoin was the filing of a new Bitcoin Spot ETF from the world’s largest asset manager, Blackrock. The dollar index (DXY) was also weak, falling below 103p for the first time in weeks.
Aside from the positive economic data, the market was helped by the agreement between the SEC and Binance.. The Commission will not freeze the assets of a U.S. company, so customers are not threatened. All of this creates additional upside potential.
The new trading week will open with data from the U.S. housing market. They will be published tomorrow at 16:00. On Wednesday and Thursday, U.S. Federal Reserve Chairman Jerome Powell will participate in the annual U.S. Senate and House of Representatives hearings on monetary policy. Existing real estate sales data will be released on Thursday. We are also waiting for a few other metrics that could affect the balance of bullish and bearish forces.
Monday. Markets Vacation
The U.S. stock markets are closed today (national holiday). But we will find out the Canadian CPI data. Also today members of the ECB will make comments on the monetary policy of the Eurozone.
Tuesday. U.S. real estate market data
The U.S. Census Bureau will release preliminary estimates of U.S. building permits for May. This is a leading indicator for the future health of the housing market.
The previous month’s final number of new building permits was in line with experts’ expectations.. Nevertheless, U.S. stock indexes adjusted about three percentage points and Bitcoin fell 4 percent.</nbsp;
Analysts expect the real estate market to improve slightly in May. Compared with the previous month, experts predict a slight increase from 1.417 million in April to 1.435 million in May.. If the number of building permits issued is expected to be higher than in the previous month, the stock market (and with it the price of bitcoin) could appreciate.
Please note that the U.S. stock exchanges are also closed Tuesday due to the holiday.
Other events: the Bank of Australia report, industrial data from Japan, the prom-inflation in Germany.
Wednesday. Powell Report to Congress
The most important macro event of the week is Jerome Powell’s address to the U.S. Congress. He gives this report once every six months, and it lasts two days. So stay tuned on Wednesday and Thursday.
In the report, the Fed chief will talk about the current state of the U.S. economy and give his predictions. Powell will also answer a series of questions from politicians. Markets will be listening closely for commentary in light of last week’s decision and the Fed’s report released Friday. The document stresses that there is tension in the financial sector and banks, but the Fed has no plans to cut interest rates.
Possible market reactions to the report Powell
For the head of the Fed to start at 16:00 Kiev time on Wednesday. So you have to be as careful as possible during this period.
Frequently the stock market reacts in a downturn to criticism from U.S. policymakers about inflation, banking problems, future economic risks and other issues. Investors may also react painfully to Powell’s vague statements or lack of answers.
The debate will be interesting to watch in light of future U.S. elections. Remarks by Republicans may give insights into their future campaign. And also generally shed more light on the relationship between the Fed and the U.S. Congress.
Other Wednesday events: UK inflation data, a speech by Bundesbank President and ECB member Joachim Nagel, loan applications in the United States, a speech by Fed member Goolsby, retail trade data in Canada.
Thursday. New Real Estate Market Data
On June 22, the National Association of Realtors presents the latest data on existing real estate sales for May. These figures are considered an important indicator of the state of this market in the United States. If the sales figure exceeds experts’ expectations (4.24 million), it indicates the growth of consumer spending and stabilization of the U.S. economy. If the forecasts don’t come true, it will be confirmation that the housing market will continue to fall.
In the past two months, sales figures have been below experts’ forecasts twice in a row and have caused price consolidation in the stock and cryptocurrency markets.. So it’s worth keeping an eye on this metric.
We note that home sales are likely to remain low. This is not surprising, given the high interest rates on new bank loans. So experts expect the dollar to recover from its recent correction after the report.
Other metrics on Thursday: Swiss Bank interest rate decision, Bank of England governor speech, Turkey interest rate decision, U.S. jobless claims, continuation of Powell report to Congress, Conference Board economic indicators index, Kansas City Federal Reserve regional sector index.
Friday. U.S. Services PMI
The week ends with fresh Purchasing Managers’ Indexes (PMI) for the U.S. services sector. May figures were below experts’ expectations. But despite the slight decline, the services sector is still stronger than other areas (such as manufacturing).
As of now, analysts are forecasting a PMI of 54.0. If the numbers turn out to be much lower, investors could use that as an opportunity to sell more stocks with a focus on services. This would put pressure on the U.S. stock market as a whole. However, the impact of this on cryptocurrencies is hard to predict, as bitcoin is most closely correlated with tech stocks (Nasdaq).</nbsp;
In general, we can say that low PMI and sector issues will increase the likelihood of further declines in inflation in the coming months.</nbsp;
If the PMI data is stronger than forecast, US stock indices may continue to rise and temporarily stabilize the cryptocurrency market.
Other metrics on Friday include inflation in Japan, UK and Eurozone retail sales, US manufacturing business activity index.
Lest we forget, events within the cryptocurrency industry have a strong impact on the charts. The most important news is easy to follow on our website and Telegram.
We should remember that the charts are strongly influenced by events within the cryptocurrency industry.