The Week Ahead: Key Economic Events to Watch
The coming week is set to be a busy one for the financial-economic calendar, with several important events taking place. This could potentially bring back volatility to the crypto market, with bears currently dominating the scene. One event to keep an eye on is the Federal Reserve chair’s speech on September 28, as highlighted by macroeconomics outlet The Kobeissi Letter.
New Data Reports and Consumer Confidence Figures
On September 26, a new data report for US building permits and new home sales will be released. While these figures are expected to dip slightly, indicating weaker real estate markets, it is unlikely to have a significant impact on crypto markets. Additionally, the month’s US consumer confidence index figures will also be released on Tuesday, reflecting the broader economy. If these figures remain subdued at August levels, it suggests a sluggish economy and bearish sentiment in crypto markets due to reduced appetite for high-risk assets.
Quarterly GDP Figures and Fed Speakers
The second quarterly GDP figures are expected to be released on September 28, with a forecasted rise from 2.1% to 2.3%. On Thursday, there will be two Fed speakers: Fed Governor Lisa Cook and Chair Jerome Powell. However, their speeches are not expected to have a significant impact on digital asset markets as Powell will be holding a town hall meeting for educators. Last week, the Fed decided to leave rates unchanged as widely anticipated by the markets.
Inflation Gauge Figures and Financial Market Outlook
On Friday, new figures for the Personal Consumption Expenditures (PCE) index will be released. The Core PCE inflation is known as the Federal Reserve’s preferred inflation gauge. It is expected that Core PCE year-on-year will fall from 4.2% to 4.0%. Speaking about financial markets, Kobeissi highlighted that the return of volatility is good news for traders and that they are prepared for the uncertainty brought by the Fed.
Crypto Market Outlook
Despite the upcoming economic events, crypto markets remain in bear territory, which means it is unlikely that these events will have a significant impact on the market sentiment. Over the weekend, total capitalization dropped by approximately $10 billion, currently standing at $1.08 trillion. BTC also experienced a sharp decline during the Monday morning Asian trading session, falling by 2.4%. Although there was a slight rebound, it is expected that BTC will drop below $26,000 as sentiment continues to slide. Furthermore, October is historically a bearish month for stock and crypto markets.
Hot Take: Volatility Returns to Crypto Markets
This week’s key economic events have the potential to bring back volatility to the crypto market. With bears currently dominating and uncertain Fed decisions on the horizon, traders are ready for increased market fluctuations. However, given the bearish sentiment and recent declines in total capitalization, it is unlikely that these events will significantly impact market trends. October’s historically bearish nature further adds to the cautious outlook for crypto markets in the coming weeks.
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