- The number of important macro releases this week is very high
- Let’s outline the most important ones
The past trading week was mostly characterized by price consolidation in the stock and cryptocurrency markets.
And over the weekend, bitcoin made traders even more nervous, falling to its 2-year low of $25,950. Negotiations on raising the U.S. debt ceiling and its terms put pressure on the exchange rate.
This causes various theories and rumors, introduces chaos, and leads primarily to lower prices for risky assets.
Plus the market suffers from other problems – Bitcoin network congestion, Binance problems, etc.. We wrote more details in our Friday review.
But in the morning, the main cryptocurrency began to gain strength. Bitcoin is now trading at $27,395, up 2% overnight.
The next week in financial markets promises to be quite dynamic. Sentiment will be influenced by key macroeconomic releases and numerous speeches by the presidents of major central banks.
But the main driver will be the rumored financial problems in the U.S.. Debt ceiling talks continue
Joe Biden will resume meetings with Congress today on the debt ceiling. This discussion was previously scheduled for Friday, but was postponed.
We wrote about the significance of U.S. government debt in a separate piece.
Also today, three Fed officials, Bostick (3:45pm), Kashkari (4:15pm) and Barkin (7:30pm) will speak.
Other Monday events: the New York State Regional Index, the German Central Bank Governor’s speech, inflation in Switzerland
Tuesday. U.S. Retail Sales and Fed Member Speech
The U.S. Census Bureau will release U.S. retail sales data for April. They are considered an important gauge of private households’ consumer sentiment.
Analysts predict the metric will rise to 0.7%.. If so, it indicates a possible stabilization of consumer sentiment.
And also on the increase in U.S. economic growth in the previous month. Stabilization of consumer behavior in the U.S. could accelerate the recovery of the U.S. Dollar Index (DXY) prices and thus create obstacles for the cryptocurrency market.
If the numbers come in lower, it indicates sustained consumer restraint.
Also tomorrow, Fed Vice Chairman of Banking Supervision Michael Barr will speak to Congress about the recent stress in the banking sector and the central bank’s response.
Other events on Tuesday include the Australian Central Bank minutes, Chinese sales and production data, UK labor market data, German ZEW business sentiment index, Eurozone GDP, ECB President Christine Lagarde speech.
Wednesday. Inflation in Europe and the U.S. Construction Market
The Eurostat will release the Harmonized Consumer Price Indexes in Europe report on May 17.
Annual inflation in the euro zone is expected to be 7% in April (compared to 6.9% in March).
Sustained high inflation in Europe could become a growing problem for the region’s economies.
Local financial markets could lose their gains from previous weeks and also have a negative impact on the Bitcoin chart.
Also on Wednesday, the Census Bureau will present preliminary data on U.S. building permits for April.
This is a leading indicator of the strength of the housing market. The previous metric was higher than expected and spoke of stabilization.
As of now, analysts expect 1.430 million building permits. The stock and crypto markets should react positively to these or higher numbers.
But a downturn in building permits could cause another dampener in the markets.
Other Wednesday events: GDP in Japan, real estate prices in China, a speech by the Governor of the Bank of England.
Thursday. Federal Reserve Bank of Philadelphia Manufacturing Index
The Federal Reserve Bank of Philadelphia Index is considered a leading indicator of the ISM Purchasing Managers’ Index.
If it is higher than 0, it indicates positive business development of industrial companies. Most recently, the index was -31.3, and led to significant price declines in the stock and cryptocurrency markets.
As of now, analysts expect the metric to be -19.0. Consequently, if it will be even lower, we expect a bearish reaction. A higher metric will be positively received by the crypto sector.
Other Thursday events: speeches by Fed members Barr, Logan and Jefferson, U.S. home sales data, Bank of Canada Governor speech
Friday. Fed Chairman Powell’s speech
On the last trading day of the week, Jerome Powell will appear before the cameras. Investors are hopeful that the Fed chairman will give more clarity on future U.S. monetary policy.
It remains to be seen if he will confirm his recent more dovish statements after the recent interest rate hike.
In any case, speeches of the Federal Reserve chairman are always exciting for the world markets.
Other Friday events: inflation data in Japan and Germany, speech of ECB head Christine Lagarde.
We follow the most important news, as always, on our website and in social networks. We wish you all a productive work week.