- Several important events await us in the coming days.
- Crypto investors should keep an eye on them to understand market sentiment.
The past week has been challenging for the stock market and crypto. Key currency Bitcoin fell more than 10% and fell below the $20,000 mark. This was initially facilitated by hawkish statements by Fed Chairman Jerome Powell. Then there are problems with two key crypto banks Silvergate and Silicon Valley Bank. Macro markets were negatively affected by data from the US Department of Labor on non-farm payrolls. They showed that jobs are still much more than analysts expected (311,000 versus 225,000 forecast). This means that the Fed’s fight against inflation has not yet produced the desired effect. All this together led to the next black days in the market.
By Monday morning, the situation had stabilized and bitcoin rose by 9%. But this is not the time to relax. In the coming days, we will have several events that will have a strong impact.
Monday. Biden’s speech and emergency Fed meeting
President Biden is expected to address the United States today. He will explain to the people what anti-crisis measures the authorities will take to stop the process of infection in the American banking system.
In the evening, an emergency meeting of the Fed will take place. At it, regulators will announce new solutions on how to deal with the systemic threat of bank failures. Before that, the US had already allocated $25 billion to finance banks.
The collapse of SVB and Signature Bank sent global markets into turmoil, with bank stocks plummeting on fears of a future crisis in the financial sector and beyond.
Experts predict that the next victims may be First Republic Bank, BNY Mellon, Citigroup and State Street. Meanwhile, shares of First Republic Bank are down 60% in premarket trading.
Tuesday. US inflation data
March 14, the focus will be data on price increases in the US in February. In January, inflation was 6.4% on an annualized basis, and was above the forecast of 6.2%. For February, experts expect CPI to drop to 6.0 p.p. If expectations are confirmed, the stock and crypto markets may begin to recover after the correction of the last few weeks.
If the CPI is higher, then the dollar will continue to strengthen in the short term. And the general disappointment in the market will increase even more. So in this case, the forecast for cryptocurrencies will be negative.
Inflation metrics will influence the decision of the regulator on interest rates on March 22. However, there are theories that the Fed will temporarily refuse to increase to calm the market.
Wednesday. Producer Price Indices (PPI)
On March 15, US Producer Price Indices (PPI) for February will be released. Experts expect growth of 0.4%. If so, it will strengthen the position of the dollar. This means that it will create additional obstacles in the stock and cryptocurrency markets.
If Producer Price Indices turn out to be lower than expected, this will reduce the pressure on Bitcoin and may cause a bullish price reaction in the crypto market.
Friday. Inflation in Europe and retail sales in the US
The week ends with the Eurozone CPI report for February. Preliminary expectations – 8.5%. If inflation turns out to be the same or lower, the market should react positively. We expect the growth of stocks and cryptocurrencies. Higher inflation could cause markets to correct again.
Also on Friday, US retail sales data for February is released. They are considered an important indicator for calculating the buying sentiment of private households. In the previous month, US retail sales rose 3.0%, well above the expected 1.8%. In February, experts expect a fall to -0.3%. If this is the case, then the metric will indicate a new sign of a slowdown in the US economy (which is negative for the crypto).
Crypto traders hope that the buying mood will be higher than analysts’ forecast. This will further spur the recovery of prices in the stock market and cryptocurrencies.