As a seasoned crypto investor with a decade of market experience under my belt, I must say that last week was a rollercoaster ride, to put it mildly. The market volatility we witnessed is reminiscent of the early days of Bitcoin, when a single tweet could swing prices by double digits.
Last week was a brutal one for crypto markets, with losses extending into the weekend.
Despite a barrage of American employment figures not halting market declines, ‘Slumptember’ has proven true to its moniker. The upcoming week is expected to be rich in inflation data and further reports concerning unemployment claims.
According to the Kobeissi Letter, this is the last week for the release of inflation data prior to the highly anticipated Federal Reserve meeting in September.
Economic Events Sept. 9-13
On this coming Wednesday, we’ll get the Consumer Price Index (CPI) report for August – a crucial indicator of inflation that the central bank relies on heavily. This data reflects current trends in prices within our economy, influencing consumer spending patterns. As such, it is closely monitored by Federal Reserve policymakers because it influences their decisions regarding interest rates.
On Thursday, we’ll get the August report on the Producer Price Index (PPI), which reflects the prices that producers and manufacturers pay for their inputs. This index serves as an early warning signal for inflationary pressures since it measures the costs of producing goods that consumers buy. Essentially, it’s a forward-looking indicator for next month’s Consumer Price Index (CPI) report.
As an analyst, I’m anticipating that on Thursday, we’ll delve into the initial jobless claims data, offering valuable insights into the broader labor market landscape.
Key Events This Week:
1. OPEC Monthly Report – Tuesday
2. August CPI Inflation data – Wednesday
3. Initial Jobless Claims data – Thursday
4. August PPI Inflation data – Thursday
5. Continuing Jobless Claims data – Thursday
6. MI Consumer Sentiment data – Friday
This is the…
— The Kobeissi Letter (@KobeissiLetter) September 8, 2024
On Fridays, we get the initial findings for September’s Michigan Consumer Confidence Index on Inflation Expectations. This data comes from a regular survey that measures consumer confidence and their perceptions about long-term inflation rates. These results are also factored into the Federal Reserve’s calculation of its Inflation Expectations Index.
Based on the recent underwhelming economic figures, there’s growing speculation about the possibility of either a quarter-point or half-point reduction in interest rates during the Federal Reserve’s meeting in September. The upcoming Consumer Price Index (CPI) report is expected to significantly influence this decision-making process.
A less robust Consumer Price Index (CPI) reading might boost the likelihood of a 0.5 percentage point interest rate reduction during the September 18 meeting. According to the CME Fed Watch tool, there’s approximately a 31% possibility of an even bigger rate cut at this time.
Crypto Market Outlook
In theory, a bigger decrease in interest rates could benefit the cryptocurrency market, yet it seems that this isn’t sufficient to dispel the current negative attitude towards these digital assets.
The markets regressed to a point last seen during the Black Monday crash on Aug. 5, as the overall market value fell beneath $2 trillion towards the end of last week. It has since rebounded to $2.03 trillion, but it still represents its lowest point since early February.
Bitcoin experienced a drop over the weekend, reaching a low of approximately $53,300, but subsequently regained strength to touch $55,000 during the Asian trading session on Monday morning. Ethereum, however, had a more challenging weekend, dipping below $2,200 at one point, and while it has since recovered to around $2,300, its strength remains questionable.
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2024-09-09 08:21