- We are introducing a new heading “macro-week results”
- She sums up the economic calendar
Friends, every Monday we compile an economic calendar for you with the announcement of important macro events. Let’s sum up and see what those metrics were. And how they influenced the BTC chart.
So, on Friday, Bitcoin is trading at $29,115.35. During the day, its price has not changed much. The world’s largest cryptocurrency has gained more than 70% since the start of the year, but is down about 6.6% from a 30-day high of $31,005 hit on April 14.
Throughout the week, Bitcoin maintains high volatility. The market was digesting several key news.
Monday. Strong data on the US labor market
The week started with the ADP Nonfarm Employment Change metric. It shows the number of people employed in the non-agricultural sector. Contrary to forecasts (148 thousand), the number of jobs turned out to be much higher – 296 thousand. Apparently, the Fed read this as an insufficient tightening of monetary policy. And we decided on Wednesday to raise the rate.
Wednesday. US rate hike
On Wednesday, the US Federal Reserve raised the rate by 0.25%. This was followed by a hawkish press conference by Fed Chair Powell. He stated that the regulator is not considering cutting rates in the foreseeable future. Moreover, if inflation does not decrease, at the next meeting on June 14, the Fed may raise the rate again.
In response, the BTC exchange rate was a little feverish on Wednesday. Then the price on the chart went up, breaking through $29,000.
Thursday. EU rate hike
Following the US, the ECB decided on Thursday to raise its interest rate by another 25 basis points to 3.25%. And Christine Lagarde signaled a further tightening of monetary policy.
Friday. Labor market data
The US has updated the number of initial applications for unemployment benefits. It turned out to be higher than forecasts (242 thousand against 240 thousand). The number of unemployed increased by 13,000 over the week (from 229,000). This indicates a slowdown in the labor market.
Here is what he writes about this in his report Independent Commodity Intelligence Services:
“Given restrictive interest rates, credit tightening due to regional banking turmoil, and weakness in several leading indicators, the US economy could enter a mild recession in the third or fourth quarter of 2023.”
From a global perspective, this is good for Bitcoin, which will increasingly be seen as a reserve asset.
New banking crisis
The black swans of this week are the US regional banks.
It all started with the fact that the Fed cheerfully reported on Tuesday that the banking system is completely healthy. On the same day, the shares of two banks fell. These are PacWest and Western Alliance Bank. And Metropolitan Bank trading was completely halted.
After that, Bloomberg wrote that PacWest considered strategic options, including selling the brand. The bank itself denied such news. But the deed is done: on Thursday, PacWest shares again fell more than 50%. We also see a decline in several regional banks. And the European UBS began to think about the resale of Credit Suisse:
The total loss of market capitalization in the US banking sector has exceeded $2,500 billion this year. How will this help Bitcoin?
Lingering problems in the banking sector could heighten concerns about TradFi’s ability to withstand financial turmoil. This will increase the number of investors who are interested in digital assets.
“The crypto market has already benefited from the surge in inflows during previous bank failures this year. And he will continue to do so if there are new crashes.” – comments a representative of CPT Markets in interview Forcast.
However, crypto-philosopher Arthur Hayes is confident that the US will again bail out the banks.
“More crappy US banks need to be found this weekend to buy the put. I wouldn’t take risks on the weekend. You never know what will be the trigger that makes Yellen or Powell give in and bail everyone out. Now it’s all politics, and politics has more to do with power than with rational decisions.”
The week will end with data on non-farm payrolls in the US (out at 15:30). And on Monday we will prepare a new economic calendar for you. Have a nice weekend everyone.
