Over the last seven days, the value of cryptocurrencies has seen a significant decrease, causing over $300 billion to exit the digital asset market. The weekend remained relatively stable, however, on Monday morning in Asia, there was a brief surge in activity followed by a price adjustment.
Additionally, important inflation reports are scheduled for release in the U.S. this week, potentially influencing central bank monetary decisions. These reports, including Consumer Price Index (CPI) and Producer Price Index (PPI), will be the last ones before the Federal Reserve’s meeting on January 29th, as noted by the Kobeissi Letter.
Over the past week, I’ve noticed a surge in my own expectations of inflation, mirrored by the Consumer Sentiment Index. Interestingly, this aligns with the price trends outlined in the ISM Services PMI report. This potentially means that high-risk assets like crypto and tech stocks could be affected, as they indeed corrected significantly during this period.
Economic Events Jan. 13 to 17
Due to a possible resurgence in inflation rates, investors and financial experts are expressing worries that the Federal Reserve might halt their rate cuts during the first half of the year. Furthermore, Fed Governor Michelle Bowman stated that inflation has surpassed its long-term objective by an unsettling margin, while also presenting persistent risks that could push it even higher.
On Tuesday, the December’s Producer Price Index (PPI) report will be published, showcasing the prices that producers and manufacturers pay for their inputs. This data represents the cost of making consumer goods, which in turn impacts retail prices significantly and is considered an indicator of potential inflationary pressures.
On Wednesday, we’re expected to receive another crucial gauge of inflation – the Core Consumer Price Index (CPI) report for December. Essentially, this index calculates the typical price fluctuations experienced by consumers when purchasing a variety of everyday goods and services over time.
According to Reuters’ report dated January 12th, there is a general expectation that the Federal Reserve will halt its cycle of interest rate cuts at its upcoming meeting towards the end of this month. However, stronger-than-anticipated Consumer Price Index (CPI) data could cause investors to postpone their expectations for additional easing, possibly until later in the year.
Key Events This Week:
1. December PPI Inflation data – Tuesday
2. December CPI Inflation data – Wednesday
3. December Retail Sales data – Thursday
4. Philadelphia Fed Manufacturing Index – Thursday
5. December Housing Starts data – Friday
6. Total of 7 Fed speaker events…
— The Kobeissi Letter (@KobeissiLetter) January 12, 2025
On Thursday, we’ll get the latest report on consumer spending for December. This includes expenditures on both long-lasting (durable) and short-lived (non-durable) items. It serves as a significant predictor, reflecting the general state of the economy.
As a researcher, I eagerly anticipate the forthcoming earnings reports from prominent American institutions like JPMorgan and Goldman Sachs next week. These reports mark the beginning of the fourth quarter financial disclosures for U.S. companies.
Crypto Market Outlook
The total market capitalization held steady throughout the weekend, however, it dipped beneath 3.4 trillion dollars as of this moment.
During the Asian trading hours on Monday morning, Bitcoin nearly reached $96,000 before swiftly falling back to around $94,000, where it’s been hovering for a while now. Over the last seven days, this digital asset has dropped by 5%.
Over $3,300, Ethereum briefly surged but then dropped down to around $3,200, marking a 11% decline in its value over the last seven days.
As a researcher, I’m observing a predominant trend among altcoins today. Notably, Cardano (ADA), Tron (TRX), Sui (SUI), and Stellar (XLM) are experiencing larger daily losses, suggesting a downturn in their performance.
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2025-01-13 10:12