First, there will be the announcement of the gross domestic product (GDP) in the euro area for the last quarter of 2022, then the publication of the final US consumer price indices for January, among other events.
After a bullish first week of trading in February, there was further profit-taking in the stock and crypto markets in the past week. At the end of the week on Friday, the US Bureau of Labor Statistics retrospectively adjusted published inflation rates in recent months, reigniting inflation fears among investors.
In addition, initial jobless claims were above analyst estimates for the first time since the beginning of the year. Given the strong Non-Employment Report (NFP) on February 3, market participants were surprised by this unexpected increase.
Below is a summary of the economic data that will be in focus this week.
Tuesday: Gross Domestic Product in Europe
At 11:00 a.m. (CET), Eurostat will publish the gross domestic product of the Eurozone for the last quarter of 2022.
Analysts forecast growth of 1.9 percentage points. If the forecasts are exceeded and are in the range of the final data for the third quarter of 2022, it would be an indication that the euro area economy is performing better than expected despite the rise in official interest rates.
A strong gross domestic product would encourage the European Central Bank (ECB) to continue raising interest rates steadily when the next interest rate decision is made. However, a significantly weaker gross domestic product would constrain the ECB’s monetary policy actions and is likely to have a negative impact on the strength of the euro.
The US dollar DXY index would thus continue its recovery of the past few weeks, which could spell more headwinds for the Bitcoin price.
This Afternoon: US Inflation Data
Experts now expect a drop to 6.2 percentage points. If analysts’ expectations are confirmed, it could continue the rallying movement that has been underway since the beginning of the year in the stock and crypto markets.
On the other hand, if consumer price indices are above estimates, the US dollar should continue to gain ground in the near term and weigh on risky asset classes.
Wednesday: US Retail Sales in the Spotlight
Mid-week at 14:30 (CET) the updated US retail sales for the month of January are presented. They are considered an important measure to gauge the buying mood of private households.
In the last two months of trading, US retail sales declined again and turned negative. For January, however, experts expect a recovery of 1.6 percentage points.
If the buying mood of private households can stabilize again above the 0 limit and reach the expected value, this could guarantee a price recovery in the stock and crypto market.
If, on the other hand, published retail sales are below expert estimates and remain in the negative range below 0, this would be yet another indication of a weakening US economy.
By Audy Castaneda