Inflation in July was lower than analysts had expected in advance, causing prices on the crypto market to rise in the last week of trading. The key cryptocurrency Bitcoin (BTC) rose to $25,000 for a short time and is trading a good 3 percent higher at around $24,000 in a 7-day comparison today, Monday, despite slight profit-taking. Ethereum (ETH) also benefited from the recovery on the classic financial market and rose to a new all-time high of $2,040 last weekend. The second largest cryptocurrency thus reached its first important price target.
In addition to the US inflation rate, which has recently fallen slightly, investors are focusing on fresh data on retail sales in the US and the consumer price index in the euro area this trading week. Whether the positive price development of the previous week will continue in this trading week will again depend largely on key economic data. 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 Bitcoin, Ethereum and Co. this week.
Building permits in the US at the start of the week
Tomorrow, Tuesday, August 16, at 2:30 p.m. (CET), the Consensus Bureau will first publish the number of building permits for the month of July in the USA. The experts’ forecast is 1.640 million, after 1.696 million new permits in the previous month of June. Building permits are considered a leading indicator for the housing market in the USA. If the building permits granted exceed expert expectations, this points to a continued robust real estate sector in the USA. A persistently strong housing market could strengthen the US Federal Reserve in its view of carrying out further interest rate hikes as planned. A robust housing market should therefore have a negative impact on the US stock market and the crypto market in an initial price reaction.
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US retail sales mid-week
On Wednesday 17 August at 14:30 (CET) US retail sales for the month of July will be released. Retail sales are considered an important indicator of consumers’ buying mood. Most recently, sales in the US retail trade, at +1.0 percent, were significantly stronger than the experts had expected. Market participants expect an increase of 0.1 percentage points for the month of July. If the forecast is topped again and consumer sentiment in the USA remains robust, the Fed should confirm this in its plan to raise interest rates three more times by the end of the year. At 20:00 (CET) the FOMC meeting minutes of the US Federal Reserve for the last central bank meeting in July will be published. Investors hope for further relevant information on the economic situation and the future monetary policy of the Fed. Increased volatility on the financial markets is therefore to be expected on Wednesday evening.
Consumer price index (CPI) for the euro zone on Thursday
On Thursday, August 18, at 11:00 a.m. (CET), the consumer price index (CPI) in the euro area for the month of July will first be published. The analysts are forecasting a year-on-year increase of 8.9 percentage points. The estimate is thus again at the level of the previous month. If the inflation rate turns out to be lower than expected, as was the case recently in the USA, the pressure on the ECB will at least ease slightly. In a first reaction, the stock indices in Europe and the USA should continue to rise and also pull the crypto market north with them. However, ECB boss Lagarde will not be able to deviate from her policy of planned interest rate hikes in the coming trading months. The ECB is still a long way from the target of an annual two percent inflation rate.
US home sales conclude this week’s round of data
Also on Thursday at 4:00 p.m. (CET) will be fresh data on existing home sales in the USA. Existing Home Sales describe the monthly sales of existing homes in the United States. Analysts expect the number of home sales to continue to fall in July. The market experts expect 4.89 million sales. In the previous month of June, 5.12 million houses had changed hands.
With existing home sales accounting for around 90 percent of the US housing market, this metric is an important component in assessing US consumer spending. If the number of homes sold is higher than expected in contrast to the previous month of June, this indicates an initial stabilization in the recently weak housing market.
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