- Let’s run through the macro data that came out this week
- And let’s see what news influenced the BTC charts
Every Monday we prepare an economic calendar for readers. It helps to track the mood of investors and predict their actions. Now let’s sum up. Let’s look at the economic week and the market in a general perspective.
Monday. Positive reports from EU and UK, hunt for Gensler
The week started with good news from the EU and set the start for the growth of the euro. Production in industrial companies of the Eurozone in April has grown by 1.0%, according to Eurostat. This turned out to be better than analysts’ expectations (they predicted an increase of 0.9%). Also came positive reports UK Department of Labor – the unemployment rate fell by 0.1 percentage points to 3.8%. Experts expected unemployment at 4%.
Also Monday, Republican Congressman Warren Davidson nposted on twitterwhich is filing a bill to restructure the SEC and fire its current chairman, Gary Gensler.
“US capital markets must be protected from a tyrannical chairman, including the current one. That is why I am introducing legislation to correct the ongoing abuse of power and provide protection that is in the best interests of the market for years to come.”
Against this background, Bitcoin added 1.00% and traded at about $26,200.
Tuesday. U.S. Inflation Falls, Binance’s Small Victory, and Hinman Papers Released
On Tuesday, a federal court denied the SEC’s request to freeze Binance.US assets. This decision allows the platform to continue operating while it fights the lawsuit. On such news, BTC added 1%.
On June 13, US consumer prices came out. They unexpectedly turned out to be lower than expected – 4% instead of the expected 4.1%. Core inflation excluding energy and food prices rose by 5.3% from May 2022 levels. This was in line with market expectations. On a monthly basis, prices for basic goods and services rose by 0.4 percentage points.
These inflation data gave the Fed reason to suspend rate hikes.
Also on Tuesday, the SEC was forced to disclose long-awaited Hinman documents. However, this publication did not affect the quotes of the Ripple coin and the market as a whole. So the expectations from this event did not come true.
Recall that in the notes to Hinman’s speech it is stated that ether should not be classified as a financial security. Experts hoped that this would not only allow Ripple to defend the rightness of Ripple in court with the SEC, but also generally protect itself from attacks on securities. However, the Hinman documents essentially prove only that the SEC cannot decide whether to classify tokens as commodities or as securities.
Wednesday. Tactical pause from the Fed and Powell’s speech
The Fed met on Wednesday. It brought the expected results: the US Central Bank left interest rates unchanged at the level of 5% to 5.25%. This rate is at its highest level since 2006 after ten consecutive increases.
However, the Fed’s decision did not cheer up the crypto and capital markets. The reason for this was the speech of Chairman Powell. He hinted at two more rate hikes before the end of 2023.
For crypto, this means that less capital will flow into the cryptocurrency markets in the short term. And investors will flee to more stable assets – especially against the backdrop of tough actions by the US SEC.
The next meeting of the Federal Open Market Committee is scheduled for July 25-26.
The CME FedWatch tool predicts a 25.6% chance that the Fed will leave rates as they are at the July meeting, while a 74.4% chance suggests that the Fed will raise rates by 25 basis points.
Thursday. The decision of the ECB, reports on the labor market in the US and the fall in the crypto market
On Thursday morning, we saw on the charts the outcome of the Fed meeting and Powell’s hawkish speech.
Bitcoin fell by 4% and traded at a low for $24,797. This was the lowest level since March 16. Other cryptocurrencies showed even greater losses.
Also yesterday, the European Central Bank raised the rate by 0.25% to 4%. This is the eighth consecutive rate increase. And one more negative factor for the market.
At the end of the day came out a report of initial claims for unemployment benefits in the US. Their number turned out to be higher than expected (262 thousand instead of 250 thousand). This is a favorable option, as it indicates the first success of the Fed in suppressing inflation. But for the strength of the dollar, such a metric turned out to be negative – therefore, the DXY index fell slightly.
The data did not end there – yesterday was a very busy day according to reports. The US presented retail sales, which suddenly rose by 0.3% against the expected – 0.1%.
Also on Thursday was the release of the main index of doing business, conducted by the New York Fed in conjunction with Empire State Manufacturing. It rose to 6.6 in June (experts expected a negative index at around -15.1). This is the second monthly increase in a row. The rising index indicates that companies have become more optimistic about improving business conditions.
Friday. Bank of Japan decision
Today, the Bank of Japan (BoJ) left base rates unchanged. They explained this by saying that it is more difficult to deal with the consequences of a premature rate hike than to respond to rising inflation. As a result, the USD/JPY pair gained bullish momentum and added more than 0.5% per day.
After yesterday’s ECB decision, the dollar index (DXY) fell to weekly lows of 102 percentage points. The euro reached its 15-year high against the Japanese yen and a new four-week high against the dollar after the ECB raised interest rates yesterday to a two-year high of 3.5% and announced further hikes.
Today, investors are waiting for the speeches of representatives of the Federal Reserve System and their comments on the prospects for the economy.
Meanwhile, Bitcoin has begun to recover from yesterday’s decline. During the day, it added 2.05% and is traded for $25,573. But over the week, BTC lost 3.83%.
The Solana token showed the largest weekly decline among the top 10. This is due to the fact that last week the US regulator flagged it as illegally issued financial securities.
Robinhood has delisted Cardano, Polygon, and Solana, and the eToro platform has suspended user purchases of Polygon, Decentraland, Algorand, and Dash, all named in SEC legal documents.
This concludes the trading week. Don’t miss our new economic calendar on Monday. Also, do not forget to follow the latest news on our website. Have a nice weekend everyone!