Macro Data To Watch This Week

The Bitcoin and crypto market is still in a consolidation phase, in which all eyes are on the BTC price. If a breakout from the consolidation below $30,000 and subsequently a new yearly high succeeds, the altcoin market could also come back to life. A wake-up call for the Bitcoin price could be this week’s macro data, with Wednesday being particularly crucial.

These Macro Data Will Be Crucial For Bitcoin And Crypto

On Wednesday, May 10, 2023, at 8:30 am EST, the U.S. Bureau of Labor Statistics will release the inflation data for April. In March, the year-on-year inflation rate came in at 5.0%, below the forecast of 5.2%, creating a positive surprise. For the month of April, experts expect no change and anticipate stabilization at 5.0%.

Month-on-month, 0.4% is expected for both core and headline numbers. This is high, but expected. A surprise to the downside would be very welcome after last week’s strong labor market data (3.4% instead of 3.6% US unemployment rate).

If this happens, the Bitcoin and crypto market is likely to react positively to it in an impulsive manner and could continue the superordinate uptrend. If inflation rates are above estimates, market expectations of initial rate cuts by the U.S. Federal Reserve (Fed) as early as September are likely to be pushed back. The U.S. dollar index (DXY) could start to rally and thus put pressure on the Bitcoin price.

Key macro date for #Bitcoin and crypto this week:

🛑May 10: CPI for April, expected:

Headline YoY: 5.0% vs. 5.0% last
Core YoY: 5.5% vs. 5.6% last
Headline MoM: 0.4% vs. 0.1% last
Core MoM: 0.4% vs. 0.4% last

🆙 Surprise to the downside to bolster Fed pivot in Q3

— Jake Simmons (@realJakeSimmons) May 8, 2023

On Thursday, May 11 at 8:30 AM EST, the U.S. Producer Price Indices (PPI) for April will be unveiled. Analysts expect a significant month-on-month increase to 0.5% from -0.3% last month. Assuming the forecast is confirmed, this would break the declining trend of recent months. The last time producer prices rose this sharply was in January.

If the forecasts are met or exceeded, this would be a bad sign for the financial markets, as DXY could gain strength. Given the inverse correlation with Bitcoin, this would not bode well. However, the PPI is not given the weight that the CPI is. Hence, a moderate reaction is to be expected.

If, on the other hand, the PPI is below the market experts’ estimates and, in the best case, confirms deflation (from the previous day with the CPI), it would reinforce the bullish case for Bitcoin.

On Friday, May 12 at 10:00 EST there will be the pre-release of the US Consumer Confidence and Household Consumption Expectations for the current month of May. The consumption expectations released by the University of Michigan reflect the level of optimism among consumers about the economic trend in the United States.

The initial estimate for May is 59.8, slightly lower than the previous month’s final figure of 60.5. Positive U.S. consumer expectations (larger figure) could indicate an increase in consumer spending and may have a favorable impact on the crypto market.

Consumer confidence is expected to weaken for the first time again, coming in at 63.0 (down from 63.5 in April). This could cause the DXY to react with a further downward discount, Bitcoin and crypto could benefit from it.

At press time, Bitcoin traded at $29,954, once again breaking below the mid-range.

Featured image from iStock, chart from TradingView.com