Six things to watch for crypto market impact this week

Crypto markets have made gains over the weekend, with total capitalization hitting a six-week high.

All eyes are on the PCE inflation data this week, as it is the Federal Reserve’s preferred measure of inflation and could influence a rate cut decision set for September.

Additionally, a major shake-up in the US presidential election race as Joe Biden steps aside could also weigh on markets in this busy economic week ahead.

Economic events from July 22 to 26

Preliminary readings for the July S&P Global Manufacturing PMI and Services PMI are due on Wednesday. These reports provide a snapshot of business conditions in the US manufacturing and service sectors

The annualized GDP growth report for the second quarter of 2024 will be released on Thursday, providing an early glimpse of a change in gross domestic product.

According to estimates, the pace of GDP growth accelerated to 2% in the second quarter, up from the annualized rate of 1.4% in the first quarter. A higher-than-expected reading could cause a delay in expectations of central bank rate cuts.

The main report of the week is core personal consumption expenditures (PCE) for June, due on Friday. This data reflects the average amount of money consumers spend each month and is a key inflation indicator for Fed policymakers.

Slowing PCE inflation and a continued trend of disinflation will support the odds of a rate cut in September.

Key events this week:

1. Existing home sales data: Tuesday

2. New home sales data – Wednesday

3. GDP data for the second quarter of 2024 – Thursday

4. June PCE inflation data – Friday

5. MI Consumer Sentiment Data – Friday

6. ~20% of S&P 500 companies report earnings

Great week ahead with the…

— Kobeissi Letter (@KobeissiLetter) July 21, 2024

Friday will also see the release of the Michigan Consumer Sentiment Index and the July Consumer Inflation Expectations reports, which will provide further views on longer-term inflation.

It’s a “big week ahead with the July Fed meeting just 10 days away,” Kobeissi’s Letter commented.

About 20% of S&P 500 companies reported earnings this week, including Google parent Alphabet and Elon Musk’s Tesla.

Tuesday, July 23rd is also the day when the long-awaited Ethereum ETFs are expected to start trading, which could also affect the crypto markets.

Crypto market outlook

The crypto market capitalization reached $2.6 trillion over the weekend, its highest level since early June. The move was mainly driven by Bitcoin, which broke above $68,000 in early Asian trading on Monday morning.

The asset fell below $66,000 on news of Biden’s exit from the presidential race, but quickly recovered.

Most altcoins are in the green this Monday morning, with biggest gains for Solana (SOL), Dogecoin (DOGE), and Avalanche (AVAX).

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