tl;dr
Crypto and stock markets have rallied amid tariff uncertainty, supported by signs of economic softness and rising chances of a September rate cut. However, analysts expect continued volatility due to trade, macroeconomic, and geopolitical risks. Key economic data this week include July’s CPI and PPI...
Crypto and stock markets have continued to rally despite ongoing tariff uncertainty. The rally may have been aided by some signs of economic softness and increasing odds of a rate cut in September. However, analysts tend to think that the path ahead may remain choppy, with trade, macro, and geopolitical developments still casting darker clouds over markets. This week, all eyes are on inflation data and consumer sentiment reports, which could also sway the Federal Reserve in September.
Economic Events August 11 to 15: July’s Consumer Price Index (CPI) report, not including food and energy, is due on Tuesday, and this is one of two primary gauges of inflation. Policymakers, businesses, and consumers closely monitor the CPI report, as it reflects price trends across the economy and shapes sentiment. It is expected to come in firmer at 2.8% from 2.7%. July’s Producer Price Index (PPI) report is due on Thursday, and this is another leading indicator of inflation as it reflects input costs for producers and manufacturers and impacts retail prices. Friday will see July’s retail sales data released, indicating how much consumers are spending on durable and non-durable goods and highlighting overall economic health. This is followed by the consumer sentiment and consumer inflation expectations preliminary readings, which summarize the findings of a monthly survey measuring consumer confidence and long-term inflation expectations in the US.
The current probability of a September rate cut stands at 88%, according to the CME futures Fed Watch tool. Earnings season is now nearing completion, so eyes are shifting to Nvidia, which is scheduled to report on August 27.
Crypto Market Outlook: Weekend momentum, which spilled over into Monday morning in Asia, has pushed total market capitalization up 2% on the day to an all-time high of $4.13 trillion. Bitcoin jumped more than 3% early on Monday to a four-week high of $121,850, as it came to within $1,000 of its all-time high. A new peak now seems inevitable. Ethereum was also outperforming, surging to an almost four-year high of $4,320 in early trading this week. ETH is now just 11.5% away from its 2021 all-time high. Only the top two were really making moves, and the rest of the altcoins were flat, aside from Hyperliquid and Chainlink, both adding more than 4% on the day.