Key indicators for Bitcoin and Crypto - Trading Week 7
- 5 minute read
✔️ GDP figures for the Eurozone;
✔️ U.S. inflation figures in view;
✔️ Retail Sales in the US;
✔️ Building permits and producer prices in the US.
On Tuesday, investors can look forward to the Eurozone Gross Domestic Product (GDP) release for the final quarter of 2022. Also on Tuesday, the final US CPI figures for the month of January will be released. In the middle of the week, investors will focus on US retail sales figures. On Thursday, several relevant economic data will be presented. Besides the number of construction permits in the US, investors will mainly look at updated US producer prices.
Table of Contents
- GDP in Europe
- US inflation data (CPI)
- Retail Sales in the US
- Building permits and US producer prices in the second half of the week
GDP in Europe
At 11:00 (CET) on Tuesday 14 February 2023, Eurostat will publish the Gross Domestic Product (GDP) for the eurozone in the first quarter of 2022. In contrast to the figures published on 31 January, the new data include those submitted by the Bundesamt für Statistik for Germany. Analysts are predicting a growth rate of 1.9%. Based on the GDP data, market experts can draw conclusions about current economic strength in the eurozone. The expected value is below the last published value of 2.3%.
If it exceeds expectations and approaches 2.3%, it would be an indication that the eurozone economy is developing better than expected, despite rising base rates. Solid GDP would encourage the European Central Bank (ECB) to continue raising key interest rates consistently when it next decides on interest rates.
However, a weaker GDP (below 1.9%) would limit the ECB's monetary policy actions and likely have a negative impact on euro strength. As a result, the US dollar index DXY would continue its recovery of recent weeks, which could cause selling pressure in the crypto market.
US inflation data (CPI)
Also on Tuesday at 14:30 (CET), the US Bureau of Labor Statistics is going to present the final US inflation data for the month of January. In December, year-on-year inflation remained unchanged at 6.5%. A decline to 6.2% is expected for January. If analysts' expectations are confirmed, this would have a positive impact on stock and crypto markets. On the other hand, if the CPI comes in above expectations, the US dollar is likely to gain further ground against, for instance, the euro in the short term. In many cases, this has a negative impact on volatile markets, such as the crypto market.
This scenario is very likely, as figures for the last three trading months have been consistently revised upwards. Instead of the published -0.1 percent compared to November, US inflation rose 0.1 percent on a monthly basis due to seasonal adjustments, according to a report by news agency Reuters. This could be an indication that US inflation could rise slightly again in the coming months.
Retail Sales in the US
Wednesday 15 February 2023 is dominated by US retail sales. At 14:30 (CET), midweek updated US retail sales for the month of January will be presented. They are considered an important measure for calculating households' willingness to buy. Over the past two months, US retail sales fell. In the Christmas month of December, the -1.1% reading was even significantly lower than expectations of -0.8%. For January, experts expect an increase to 1.6%.
If private household willingness to buy can stabilise above the 0% mark and reach the predicted value, it could lead to a price recovery in the stock and crypto markets. On the other hand, if the published retail sales figures fall short of experts' expectations and remain negative, it would be seen as a further indication of a weakening US economy. Recently, weak retail sales have had a negative impact on stock prices and also in the crypto sector.
Building permits and US producer prices in the second half of the week
Thursday 16 February 2023 at 14:30 (CET), the number of building permits for the month of January in the US will be published. If, as in previous months, the number of building permits issued falls short of expectations, another price correction in the US stock market could follow. The latest forecast from experts is 1.337 million. If building permits come in above the forecast, investors are likely to see this as a sign of stabilisation in the recently cooled housing market and a stock market recovery rally could begin. The crypto sector should also benefit.
The latest US producer price indexes (PPI) for last January will also be presented at 14:30 (CET). Market experts expect a 0.4% month-on-month increase. Industrial prices were down 0.5% in December, which was more than analysts had expected. If the price hikes increase, as experts expect after the recent fall in producer prices, the US dollar is likely to gain further strength, which often has a negative impact on stock and crypto markets. On the other hand, if producer price indices are below market experts' expectations, it would ease pressure on Bitcoin and the rest of the crypto market and could even lead to a bullish price reaction in the crypto market.