Macro data to watch this week

by James · May 8, 2023

The Bitcoin and crypto market is still in a consolidation phase, with all eyes on the BTC price. If a breakout from the consolidation below $30,000 and then a new yearly high is successful, 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.

This macro data will be crucial for bitcoin and crypto

On Wednesday, May 10, 2023, at 8:30 a.m. EST, the US Bureau of Labor Statistics will release 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 expect stabilization at 5.0%.

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

If this happens, the Bitcoin and crypto market is likely to react positively to it in an impulsive manner and may continue the overall uptrend. If inflation rates are above estimates, the market’s expectations of initial interest rate cuts from the US central bank (Fed) as early as September will probably be pushed back. The US dollar index (DXY) may start to rally, putting pressure on the Bitcoin price.

Key macro date for #Bitcoin and crypto this week:

🛑10. May: CPI for April, expected:

Headline on an annual basis: 5.0% vs. 5.0% last
Core year: 5.5% vs. 5.6% last time
Headline MoM: 0.4% vs. 0.1% last
Core MoM: 0.4% vs. 0.4% last

🆙 Surprise to the downside to strengthen the Fed pivot in Q3

— Jake Simmons (@realJakeSimmons) 8 May 2023

Thursday 11 May at At 08:30 EST, the US 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 will break the downward trend of recent months. The last time producer prices rose so sharply was in January.

If forecasts are met or exceeded, this will be a bad sign for financial markets as the 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. A moderate reaction is therefore to be expected.

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

Friday the 12th May at 10:00 AM EST will be the advance release of 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 first estimate for May is 59.8, slightly lower than last month’s final figure of 60.5. Positive US consumer expectations (larger numbers) may 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 DXY to react with a further downward discount, Bitcoin and crypto could benefit.

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