Macroeconomic issues have been the main driver of the crypto’s downfall that began at the end of 2021. All central banks, like the Fed, took a wrong step in assuming that the burst in global inflation pressures in 2021 would be temporary. As a result, inflationary pressures began to worsen in the first half of 2022. Thus, a sudden U-turn appeared in banks’ respective monetary policies. The Fed has already increased interest rates by 150 basis points this year. It also signals that the rates will rise above 3.0% by the end of the year. Central banks’ stance on raising interest rates has hit Bitcoin, SHIB and altcoins, along with stocks. However, high inflation and interest rates are not the only fears of investors.
Events that will affect Bitcoin, SHIB and altcoins this month
In addition to inflation, it has been revealed that the economic growth of developed countries has slowed recently. Investors are betting that a possible recession in these countries will rein in inflation. However, this idea has not caused the prices of cryptocurrencies to rise for the time being. For example, Bitcoin is still trading at a price level close to $20,000. We have now entered a new month. July will witness many important events for the global economy and cryptocurrencies. As Kriptokoin.com, we have compiled 10 of them for you.
US Labor Market Report
This Friday’s official June US Labor Market Report will show how much jobs were added to the economy last month. It will also reveal how much wages have risen and the unemployment rate. The labor market remains a bright spot in the US economy for now. This power is one of the factors behind the Fed’s aggressiveness in interest rate hikes. Because they believe the US economy, backed by a strong labor market, can “handle” them. In other words, the Labor Report may not affect the markets much because it will not change the Fed’s rate hike expectation. However, it is possible for anything to emerge that harms the perception of the US labor market. If this happens, the view that inflation will fall in the next quarter will gain strength. This means bullish potential for Bitcoin, SHIB and altcoin prices.
US consumer price inflation data
Alongside the Fed policy announcement on July 13, this will be the most important data point. Consumer Price Inflation data for May, released in June, surprised to the upside. Thus, it forced the Fed’s interest rate hike, which was 50 basis points in May, to 75 basis points. Another upside surprise will further increase the Fed’s tightening bets. Thus, as in June, it will trigger serious selling pressure in the crypto markets.
US Retail Sales Data
Recent US Retail Sales reports showed that inflation-adjusted spending growth in the US was negative. If this trend continues in June, it will only support rising recession expectations.
US University of Michigan Consumer Sentiment Survey
The University of Michigan’s Consumer Sentiment preliminary survey will be published on July 15. The research provides insight into US consumer health. One of the most watched sections of this survey at the moment is the Consumer Inflation Expectations index. There was an upside surprise at this data point in June. Thus, it took its place as another reason why the FED accelerated interest rate hikes last month. The survey is important for Bitcoin, SHIB and altcoins as it will affect the Fed.
UK Consumer Price Inflation
While crypto markets are most concerned with US economic trends, investors are also paying attention to global trends. UK Consumer Price Inflation will show the extent of the inflation problem in the UK, the world’s fifth largest economy. The data becomes publicly available on July 20.
ECB Policy Announcement
The Fed is currently the most important central bank for the cryptocurrency markets. But the ECB may surprise at the end of this month with a larger-than-expected increase of 50 basis points against the 25 basis point move it previously signaled. If this happens, it will put a new weight on the sentiment of the Bitcoin, SHIB and altcoin markets. The ECB will make its announcement on July 21.
FED Policy Announcement
FED’s policy statement will be the most important macro event of this month. Markets expect another 75 basis point rate hike by pulling the target rate range to 2.25%-2.5%. Crypto investors will take a close look at what Fed Chairman Jerome Powell said at the post-meeting press conference. Will the Fed raise 75 basis points again in September? Will the Fed slow rate hikes if there is a recession? How bad does Powell think the economy is getting? How high will interest rates go next year? The answers to these questions will be in Powell’s meeting. The announcement will take place on July 27.
US GDP Growth Data
Negative trends in consumer spending over the past few months risk lowering US GDP for the second consecutive quarter. Accordingly, negative data will confirm a technical recession. The US economy has already contracted in the first half of 2022. GDP rates are important because they are directly linked to the Fed’s interest rate decisions. The government will share GDP data on July 28.
US PCE Inflation Data
PCE inflation data, specifically the core component, is the Fed’s preferred measure of inflation. May PCE data showed year-on-year core PCE price pressures dropped to a six-month low. Thus, it contributed to the hopes that US inflation had reached its peak. In this context, this month’s PCE data will be displayed on 29 July. On the same day, however, Eurozone Consumer Price Inflation will show the extent of the inflation problem in the world’s second economic region this July. So PCE data has the potential to affect the Bitcoin, SHIB and altcoin markets.
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