Crypto markets have started to retreat again following signs of a recovery after the big crash a week ago.

Moreover, there will be a busy week ahead in the U.S. economic calendar as inflation data is released, which could influence Federal Reserve monetary policy.

These reports usually have a large impact on stock and crypto markets, so here’s what to expect.

Economic Calendar August 12 to 16

Panic hit crypto and financial markets last week as the unwinding of the Japanese yen carry trade spiked volatility. This week will give investors more insight into how quickly and deeply the U.S. central bank will cut interest rates.

Tuesday will see the release of July’s PPI (Producer Price Index) report. This reflects input prices for producers and manufacturers, measuring the costs of producing consumer goods and directly affecting retail pricing.

This report is a pre-indicator of inflationary pressures, making it a leading indicator for the following month’s CPI (Consumer Price Index). The CPI report for July is due on Wednesday, and this one provides a much broader outlook on inflationary pressures.

Analysts expect headline consumer prices, including the price of food and energy, to post an annual gain of 3%, which is unchanged from June’s report. As a result, inflation is predicted to rise 0.2% on a month-over-month basis after declining 0.1% in June.

Key Events This Week:

1. July PPI Inflation data Tuesday

2. July CPI Inflation data Wednesday

3. July Retail Sales data Thursday

4. Philly Fed Manufacturing Index Thursday

5. July Housing Starts data Friday

6. 3 Fed speaker events and earnings season continues

We…

The Kobeissi Letter (@KobeissiLetter) August 11, 2024

According to Wells Fargo senior economist Sarah House, this week’s data should suggest that inflationary pressures are cooling.

“The July CPI report is likely to further the case that inflation is quieting down even if it has not yet returned all the way back to the Feds target.”

Thursday will see July’s retail sales data release which will indicate whether the U.S. economy and consumer spending is slowing down.

“Overall, should the data [retail sales and inflation] come in as we expect, we look for the market to price in fewer cuts this year and reduce the likelihood of a large cut in September,” said Bank of America’s head of economics, Michael Gapen, in a note last week.

Crypto Market Outlook

Crypto markets have cooled during the Monday morning Asian trading session with a 3.5% decline on the day dropping total capitalization to $2.14 trillion.

Bitcoin fell sharply, dropping 4.4% over the past 24 hours from just above $61,500 to $58,500 on Monday morning.

Ethereum followed suit with a 4% slide back to $2,530 at the time of writing. As usual, the altcoins are suffering heavier losses with most of them back at bear market levels.