Societe Generale has highlighted that the differing expectations between the Producer Price Index (PPI) and the Consumer Price Index (CPI) are primarily influenced by the energy sector. According to a report by Jinshi, the PPI encompasses a broader range of energy price inputs compared to the CPI, leading to distinct projections for inflation indicators.Anticipated Decline in PPIAnalysts expect the PPI to experience a significant decline in September, largely due to fluctuations in energy prices. The report indicates that the rising costs of natural gas, which have surged since August, are playing a critical role in shaping these expectations. This increase in natural gas prices is expected to affect overall production costs, subsequently influencing the PPI.Implications for Inflation MetricsThe disparity between PPI and CPI highlights the complexities of measuring inflation in the current economic landscape. As the PPI reflects wholesale prices that producers face, a notable drop could signal easing production costs, while CPI measures consumer prices and may not respond as swiftly to changes in the energy sector. This difference may lead to varying interpretations of inflation trends moving forward. 

Key Points:

U.S. set to reveal crucial Consumer Price Index (CPI) and Producer Price Index (PPI) (CPI and PPI) for October—market-altering insights expected.

Emergency appropriation bill, expiring Friday, raises the specter of a U.S. government shutdown—implications for financial markets and services.

Investors brace for potential economic impacts as CPI/PPI data and the risk of a government shutdown converge this week.

United States is gearing up to unveil critical Consumer Price Index (CPI) and Producer Price Index (PPI) data (CPI and PPI) for October.

Investors and analysts alike are on the edge of their seats, anticipating the potential market implications of these key economic indicators.

Simultaneously, the specter of a government shutdown looms as the emergency appropriation bill, passed by the U.S. Congress in September, is set to expire on Friday. The expiration of this funding measure raises concerns about the continuity of government operations and public services, injecting an element of uncertainty into the financial landscape.

The CPI and PPI data for October hold the promise of providing valuable insights into the inflationary pressures facing the U.S. economy. These indicators play a crucial role in shaping monetary policy decisions and influencing market sentiment. Investors will be closely scrutinizing the figures, seeking clues about the trajectory of inflation and its potential impact on interest rates and financial markets.

The Impact of October CPI and PPI Unveiled

On the legislative front, the impending expiration of the emergency appropriation bill adds an extra layer of complexity to the economic landscape. The U.S. government is once again teetering on the brink of a shutdown, a scenario that could have far-reaching consequences. Market participants are keenly aware of the potential disruptions a government shutdown could entail, from delayed economic data releases to the suspension of federal services.

Market watchers will be monitoring developments closely, balancing the nuanced interplay between economic data releases and legislative maneuvers. The confluence of these events underscores the delicate equilibrium the U.S. finds itself in, navigating the challenges posed by economic data fluctuations and the specter of a government shutdown. Investors and analysts alike are poised to react swiftly to the unfolding narrative, recognizing the significance of this week's dual economic and legislative dynamics.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

This week's global macro schedule features key economic data releases and speeches that investors and traders should pay close attention to: - August 13, 21:30 KST: US July Producer Price Index (PPI) and Core Personal Consumption Expenditures (PCE) - August 14, 02:15 KST: Speech by Raphael Bostic, President of the Atlanta Fed - August 14, 21:30 KST: US July Consumer Price Index (CPI) - August 15, 21:30 KST: US Weekly Initial Jobless Claims - August 16, 02:10 KST: Speech by FOMC Haker - August 17, 02:25 KST: Speech by Austan Goolsbee, President of the Chicago Fed These events can provide insights into inflation, economic growth, and monetary policy decisions, which can have a significant impact on financial markets.

August’s PPI, CPI, FOMC minutes, and Jackson Hole Symposium offer crucial economic insights.

PPI data may signal rising inflation, potentially impacting the US dollar.

Investors closely watch CPI data and Fed’s response for monetary policy implications.

August 2024 is shaping out to be a decisive month for key economic indicators and policy discussions, with the release of the Producer Price Index (PPI), Consumer Price Index (CPI), Federal Open Market Committee (FOMC) minutes, and the Jackson Hole Economic Symposium. These significant economic events will offer valuable insights into the current economic landscape and potential shifts in monetary policy.

On August 13, the Bureau of Labor Statistics (BLS) will release July’s PPI data at 8:30 AM Eastern Time. The PPI, a leading indicator of inflation, measures the average change in prices received by domestic producers for their goods and services. A higher-than-expected PPI reading could signal rising inflationary pressures, potentially strengthening the US dollar.

The following day, August 14, the BLS will release the Consumer Price Index (CPI) for July 2024 at 8:30 AM ET. The CPI tracks the average change in prices paid by urban consumers for a basket of goods and services, making it a crucial gauge of inflationary trends. June’s CPI data showed a modest decrease, but investors will closely monitor July’s figures to assess the Federal Reserve’s potential response.

On August 21, the Federal Open Market Committee (FOMC) will publish the minutes from its July meeting. These minutes offer a detailed look into the discussions and deliberations surrounding monetary policy decisions, providing clues about the Fed’s future actions regarding interest rates and economic stimulus measures.

Finally, on August 22, the Federal Reserve Bank of Kansas City will host the annual Jackson Hole Economic Symposium. This prestigious gathering of central bankers, policymakers, and economists has historically been a platform for significant announcements and discussions on global economic issues.

Investors and analysts will be closely watching these events for indications of how the Federal Reserve might respond to evolving economic data. The PPI and CPI releases, in particular, could influence the Fed’s decisions regarding interest rate hikes or other measures to control inflation. The FOMC minutes and the discussions at Jackson Hole will provide further context and insights into the Fed’s thinking, offering valuable clues about the future direction of monetary policy and its potential impact on financial markets.

The post August Economic Outlook: CPI, PPI, FOMC, & Jackson Hole appeared first on Coin Edition.

July’s U.S. Producer Price Index (PPI) barely budged, creeping up by just 0.1%. That’s weaker than what the market expected, as forecasts had pegged it at 0.2%. 

Last month, the PPI also rose by 0.2%, so this is a clear sign that the pace of inflation is continuing to slow down, although the grind is slow.

On an annual basis, the PPI climbed 2.2% in July. Again, this was softer than what analysts were expecting. They thought it would be closer to 2.3%, but it landed below that. 

To make matters even more interesting, the previous annual rate got revised up to 2.7% from 2.6%. What’s driving this deceleration? A mix of declining service prices and only modest increases in commodity costs. 

Simply put, inflation is losing steam.

Now we cut rates?

Investors are now stuck in a guessing game about what the Federal Reserve will do next. The central bank has been on a relentless mission to crush inflation, hiking interest rates 11 times in the last couple of years. 

The rates are now at levels we haven’t seen in over two decades. But with inflation slowing, everyone’s wondering if the Fed is going to start slashing rates soon. 

The CPI data that’s about to drop will be a big piece of the puzzle. Analysts are predicting the Consumer Price Index (CPI) for July to show a 3.0% year-over-year increase. 

That would be in line with what we saw in June. They’re also expecting the core CPI, which excludes the more volatile food and energy prices, to dip slightly to 3.2% from 3.3%. 

If these predictions hold up, it’ll be more evidence that the Fed’s aggressive rate hikes are working, and maybe, just maybe, they’ll start cutting rates as early as September. 

A rate cut would make borrowing cheaper, which could rev up economic activity and potentially give all financial markets a boost.

Markets respond to cooling inflation

So, how’s the market reacting to all this? Well, it seems like investors are getting a bit more optimistic. 

Major stock indices like the S&P 500 and the Nasdaq Composite have been in the green, riding the wave of cooling inflation. 

The PPI data, in particular, has been a positive signal for them because it’s often seen as an early indicator of consumer price trends. 

Over in the crypto world, things have been heating up too. QCP Capital noted that Japanese stock prices have rebounded to their pre-crash levels. But there’s still a cloud of caution hanging over everything as investors wait for the U.S. CPI numbers. 

The big question is whether the Fed will cut rates by 50 or 25 basis points in September. Right now, the odds are split right down the middle.

Meanwhile, Ethereum (ETH) has been getting a lot of love from institutional investors. Cumulative inflows into ETH spot ETFs have now surpassed $901 million, thanks to yesterday’s net inflow. 

Even more interesting, Grayscale didn’t see any outflows, which is a first. This has given ETH prices some solid support and could be the start of a more major recovery.

Bitcoin (BTC) starts a new week fighting to preserve key support as markets prepare for a deluge of macroeconomic volatility triggers.

BTC/USD holds $54,000 at the weekly close, giving traders modest confidence over how short-term BTC price action may shape up.

CPI and PPI lead a key week of US macro data prints, these coming less than ten days before the Fed interest rates decision.

Crypto funds shed $600 million over the past week, with spot Bitcoin ETFs also seeing steady net outflows.

BTC price performance is looking “eerily similar” to 2019, according to a fractal which has remained valid throughout this year.

Bulls are eyeing the odds of a 20% bounce as BTC/USD continues a sloping channel in place since March’s all-time high.

BTC price losses echo standard "Rektember"

Bitcoin managed to avoid a significant sell-off around the latest weekly close, setting it apart from the past few weeks.

BTC/USD 1-hour chart. Source: TradingView

Data from Cointelegraph Markets Pro and TradingView instead shows $55,000 as the level currently on bulls’ radar for a reclaim.

“If price can stay above $54.5k, I'm looking for a break above this green zone to see if Bitcoin can regain some upward momentum,” popular analyst Caleb Franzen commented in one of his latest posts on X alongside a chart.

BTC/USD 1-hour chart. Source: Caleb Franzen/X

Data from monitoring resource CoinGlass reveals a band of ask liquidity being added to the area around $55,500. In its own X post, CoinGlass itself said that it hoped for upward continuation.

Binance BTC/USDT perp order book data. Source: CoinGlass/X

“$52,500 must hold for continuation in the short term,” popular trader Crypto Tony meanwhile concluded about support levels.

“Interesting few weeks ahead.”

BTC/USD 1-week chart. Source: Crypto Tony/X

BTC/USD nonetheless remains down 7% in September, roughly in line with historical norms.

BTC/USD monthly returns (screenshot). Source: CoinGlass

"Bitcoin is in a Halving year. So it makes most sense to compare 2024 with previous Halving years," popular trader and analyst Rekt Capital argued while discussing the performance numbers.

"In the previous Halving years (2016 & 2020), Bitcoin enjoyed three straight months of upside across October, November and December."

CPI precedes key Fed rate cut decision

A bumper week of US macroeconomic data precedes the all-important Federal Reserve interest rates decision on Sept. 18.

The coming days will see both the Consumer Price Index (CPI) and Producer Price Index (PPI) numbers for August, along with more unemployment figures.

Whereas the latter saw the bulk of risk-asset reactions last week, now, markets are looking for any last-minute surprises which could change bets on what the Fed will do next.

“This is the final week of inflation data before the long anticipated September Fed meeting,” trading resource The Kobeissi Letter wrote in part of its latest X posts on the topic.

Kobeissi noted that US stocks had suffered since the month began, making Bitcoin and altcoins no outliers in their lackluster performance.

“September 2024 has still not seem a single green day in the S&P 500, a great trading setup,” it added.

The latest estimates from CME Group’s FedWatch Tool show markets still favoring an interest rate cut on the more modest side of the scale — 25 basis points rather than 50. This could change, however, as the macro data rolls in.

Fed target rate probabilities. Source: CME Group

Kobeissi, meanwhile, is among those arguing that the Fed is unlikely to surprise to the upside.

“As we have been saying for weeks now, both 50 bps rate cuts and emergency rate cuts are NOT needed,” it wrote last week after the unemployment data.

“While the labor market is cracking, the Fed needs to avoid moving too quickly again. The Fed has a bumpy road ahead.”

Crypto institutional investment sees a "red" week

The past week has not been kind to crypto institutional investment products as capital flees the sector.

In a particularly bearish market appraisal, Bank of America (BoA) revealed the worst slew of crypto fund outflows since the 2022 bear market.

At around $600 million last week alone, this, Kobeissi notes, thus represents the second-largest such outflow in the history of the industry.

“Over the last several weeks, crypto funds have regularly seen outflows unlike in Q1 when weekly inflows were as much as $3.3 billion,” part of an X post reported.

“Risk appetite in crypto seems to have disappeared despite expectations that the Fed will cut rates this month.”

Crypto fund flows. Source: The Kobeissi Letter/X

The picture is similarly grim for the US spot Bitcoin exchange-traded funds (ETFs), which recorded net outflows every day last week.

Data from UK-based investment firm Farside Investors reveals that two out of the four trading days recorded net outflows above $200 million.

“Bitcoin is down~15% over the last two weeks and is trading ~25% below its all-time high,” Kobeissi concluded.

“Are crypto markets entering a bear market?”

US spot Bitcoin ETF flows (screenshot). Source: Farside Investors

Bitcoin 2019 comparison nears "critical juncture"

Current BTC price action is drawing increasing comparisons to distant 2019 — two block subsidy halvings ago.

Then, BTC/USD saw a long-term high around half way through the year before consolidating until Q4 2020. During that time, it witnessed the COVID-19 cross-market crash.

For Julien Bittel, head of macro research at Global Macro Investor, history is now repeating itself.

“This year’s Bitcoin price structure is starting to look eerily similar to 2019… Take a close look at the chart – it’s almost a perfect fractal of what we saw back then,” he told X followers at the weekend.

”Bitcoin has been stuck in a consolidation phase, and interestingly, just like in 2019, this consolidation has lasted exactly 175 days (so far). We’re now approaching that critical juncture where things could start moving in a big way.”

BTC/USD fractal. Source: Julien Bittel/X

The fractal in question suggests that BTC/USD may be imminently due an “inflection point” and return to upside which should last.

“The next week will be incredibly important to watch,” he summarized.

Cointelegraph recently reported on another 2019 comparison from crypto analyst and entrepreneur Michaël van de Poppe, who likewise sees a turnaround in Bitcoin’s fortunes potentially being right around the corner.

Popular trader Peter Brandt, meanwhile, has warned that BTC/USD is behaving too sluggishly since its most recent halving event in March.

Respecting the channel

More short-term hope for Bitcoin bulls comes courtesy of a simple regression channel this week.

Related: Bitcoin range recovery could boost UNI, SUI, OP and HNT

As flagged by popular analyst Caleb Franzen, BTC/USD is currently challenging support at the lower boundary of a channel it has respected since mid-March and its $73,800 all-time highs.

The channel neatly summarizes the six months of consolidation seen since — and even the dip below $50,000 seen in early August was not enough to invalidate it.

“Bitcoin just had its 4th daily close below the regression channel,” Franzen confirmed on Sept. 7, identifying three other similar occasions.

While stressing that a rebound is not guaranteed simply by such a daily close, he noted that the three previous cases all resulted in BTC price upside of “at least” 20%.

Here, a repeat performance would see a trip to around $65,000 — itself capping a key technical area for Bitcoin, playing host to the aggregate cost basis for short-term holders.

BTC/USD 1-day chart. Source: Caleb Franzen/X

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

This important inflationary gauge comes amid increasing speculations in anticipation of a rate cut.

Aside from food and energy, the released data shows the US core PPI increased by 0.3%.

The data from the United States Bureau of Labor Statistics, released on Thursday, show that the US PPI inflation increased 0.2% in August. This aligns with the Dow Jones consensus estimate teased before the readings came out. This important inflationary gauge comes amid increasing speculations in anticipation of a rate cut by the Federal Reserve.

The Producer Price Index measures the final demand goods and services costs that producers receive. Aside from food and energy, the released data shows the US Core PPI increased by 0.3%, which is a little higher than the 0.2% consensus estimate. Noteworthy, this core increase remained the same even when trade services were excluded.

Rate Cut Likely by Fed

Based on 12-month trends, the headline US PPI saw a 1.7% increase. Similarly, the annual rate hit 3.3%, excluding food, energy and trade. Service prices contributed significantly to the PPI measure, with as much as a 0.4% monthly increase. This came from services like trade, transportation and warehousing. Guestroom rental with a 4.8% surge, was also a major contributor to the metric.

Chris Larkin, managing director of trading and investing for E-Trade at Morgan Stanley noted that the alignment of PPI’s repetition of yesterday’s US CPI inflation reading as well as its jobless claims with expectations, clears the decks for the Fed to kick off a rate-cutting cycle.

The markets are anticipating an initial 0.25% cut, but the discussion will soon turn to how far and fast the Fed is likely to trim rates over time, he added. At the time of writing, Bitcoin is trading at $58,237 as per data from CMC.

Highlighted Crypto News Today:

Solana (SOL) Targets Rise to $155 and $160: But There’s A Catch