Despite renewed interest rate hikes by the U.S. Federal Reserve (Fed) and the European Central Bank (ECB), equity and crypto markets were unimpressed. Good quarterly figures from Apple and strong U.S. labor market data led to a recovery in U.S. equity indices in the traditional financial market at the end of the week, which also benefited the crypto sector. However, the Bitcoin price once again failed to recapture the important $30,000 milestone. Only the precious metal gold was able to briefly rise to a new all-time high in the wake of the ongoing U.S. banking crisis, temporarily reaching the $2,082 mark, before the gold price also consolidated.
✔️ On Wednesday, US inflation figures for April are presented; analysts expect stabilisation at 5.0%;
✔️ On Thursday, US producer price indices for April are presented; analysts expect a significant month-on-month increase of 0.8%;
✔️ On Friday 12 May, US consumer confidence figures and consumption expectations are published, with analysts expecting a possible economic slowdown.
Table of Contents
- CPI Consumer prices in the U.S.
- U.S. producer prices in the second half of the week
- Consumption expectations and U.S. consumer confidence at the end of the week
CPI Consumer prices in the U.S.
This Wednesday, the US Bureau of Labor Statistics will present final US inflation data for the past month of April at 2:30 p.m. (CET). In the previous month, the annualized inflation rate of 5.0% was below the expectation of 5.2%. For the month of April, experts expect no change from the latest figures. Market experts expect the CPI to stabilize at 5.0%. If analysts' expectations are confirmed or even undershot, both the stock and crypto markets could stabilize further and continue the overarching upward movement. Given the good U.S. labor market data last week, this would be the next indication of market stabilization. If, contrary to expert forecasts, consumer price indexes come in above expectations, the U.S. dollar should begin to stabilize. A recovery in the U.S. dollar index (DXY) could mean especially bad news for the Bitcoin price, as the Bitcoin price often rises when the U.S. dollar is doing poorly.
U.S. producer prices in the second half of the week
On Thursday, May 11, at 14:30 (CET), the latest US producer price indices (PPI) for the previous April will be presented. Analysts expect a significant month-on-month increase of 0.8% from the previous -0.3% to 0.5%. This would imply that producer prices, which have been gradually declining lately, are rising again. The last time producer prices rose this much was in January. If the price increases increase as experts expect, a positive reaction from the US dollar can be expected, which could then have a negative effect on the stock and crypto markets. On the other hand, if producer price indices remain below market experts' expectations and the U.S. dollar index continues to lose strength, this would reduce pressure on Bitcoin and the rest of the crypto market. This in turn could lead to a bullish price reaction in the crypto market.
Consumption expectations and U.S. consumer confidence at the end of the week
On the last day of the trading week, we can look forward to US figures on consumer confidence and consumption expectations. On Friday, May 12 at 16:00 (CET), market participants will be watching for advance releases on 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 economic development in the US. In the final release for April, household confidence came in at 60.5, a significant drop. For the first forecast in May, the expert estimate of 59.8 is slightly below the previous month's final figures. This could indicate an economic slowdown in the coming months. However, recent strong labor market data could also provide a surprise. Positive U.S. consumer expectations would point to an increase in U.S. consumer spending and have a positive effect on equity markets and the cryptocurrency sector.
Expected consumer confidence figures will weaken for the first time after stable previous months, according to analysts. The initial forecast for the trading month of May, at 63.0, is below April's final figures. In the previous month, consumer confidence still came in at 63.5. If the decline in consumer confidence is confirmed and even undercuts the experts' forecasts, an initial reaction is to expect a rate consolidation in financial markets. However, since the U.S. dollar could also weaken further, a price appreciation of Bitcoin and the rest of the crypto market is conceivable. On the other hand, if consumer confidence rises against expectations and is in the range of April's data, it is still unclear how the crypto market will respond. Paradoxically, this could also be positive, as positive consumer confidence indicates an increased willingness of private households to make new investments. If households remain confident in the U.S. economy despite the difficult economic outlook, this would again support resilience in the first four months of trading.