The new reporting week begins tomorrow, Tuesday, with the release of the final US Consumer Price Indices for February.
Key cryptocurrency Bitcoin slid by more than 10 percentage points to $19,565 in the last week of trading and dragged the entire crypto market south with it. In the second half of the week, the bankruptcy of the American crypto bank Silvergate (SI), as well as the closure of the Silicon Valley Bank (SIVB) by the American Authority Federal Deposit Insurance Corporation (FDIC), caused the collapse of the banking sector in the US and Europe.
On Sunday night, the markets breathed a sigh of relief. In a concerted effort with the Federal Reserve Bank (Fed), the US Treasury announced that it would close Signature Bank (SBNY) and make all SIVB and SBNY deposits available for customer redemption. The entire financial market skyrocketed as a result.
This week begins with the release of the final US Consumer Price Indices for February. Updated US producer prices and US retail sales follow mid-week. Investors then look forward to the next key interest rate decision from the European Central Bank. Below are details of these events.
US Inflation Data in the Spotlight
This Tuesday, the US Bureau of Labor Statistics will present the final inflation data in the US for the month of February. In February, experts expect a drop to 6.0 percentage points. If the analysts’ expectations are confirmed, the stock and crypto market could begin a recovery movement after its correction in recent weeks.
On the other hand, if consumer price indices are higher than estimates, the US dollar should continue to gain ground in the near term. Furthermore, it remains to be seen if the markets can continue to grow despite the bailout operation by the US authorities or if the disappointment will spread throughout the market.
US Mid-Week Producer Prices and Retail Sales
The current US Producer Price Indices (PPI) for the previous month of February are released on Wednesday. Market experts expect a monthly increase of 0.4 percent.
If the price increases pick up as experts expect, the US dollar should continue to gain strength, and thus could lead to more headwinds in the stock and crypto markets. If, on the other hand, the producer price indices are below the estimates of market experts, this would reduce the pressure on Bitcoin and Co. and could lead to a bullish price reaction in the crypto market.
The latest retail sales in the United States for the month of February will also be presented. If the private household buying mood is above the analyst forecast, this could further fuel price recovery in the equity and crypto market. Conversely, if published retail sales are below expert estimates and fall back into negative territory, this would be a further indication of a slowdown in the US economy.
Key Decision on Rates of the European Central Bank
On Thursday, the ECB announces its second interest rate decision in the new business year. In view of the persistently high inflation rate in the euro area, analysts expect a further interest rate adjustment of 50 basis points to 3.50 percent.
A minor increase of just 0.25 percentage points would trigger price fireworks in financial markets in an initial reaction. The euro is likely to fall against the US dollar.
By Audy Castaneda