Will PPI, CPI, Unemployment Claims Data Shift Crypto Market?

Crypto Market To Shift As PPI, Unemployment Data Loom

The next wave of economic data is about to hit, with the release of the Core PPI, PPI, and unemployment claims data. With the Bitcoin price exhibiting a historical pattern of short-term dips ahead of these releases, followed by swift rebounds, investors are keenly watching for any shifts in the crypto market trends.

Core PPI, PPI, Jobless Claims Reports Release Today

As per the Forex Factory Calendar, the PPI and unemployment claims reports are scheduled to be released today, poised to significantly impact the crypto market.

The Producer Price Index is a crucial economic gauge that tracks changes in domestic production costs. A lower-than-expected data suggest inflation is more manageable. This scenario typically injects more liquidity into financial markets, boosting riskier assets like cryptocurrencies as traders seek higher returns. This, in turn, is a positive signal for the crypto market.

Interestingly, according to economists' forecasts, the July Producer Price Index is expected to show a 0.2% increase and a 2.5% annual gain, compared to the prior figures of 0.0% and2.3%, respectively. They also forecast a 0.2% month-over-month increase and a 2.9% year-over-year rise for the Core index. This marks a jump from June's steady monthly reading and a 2.6% annual gain. The initial weekly unemployment claims are also set to be released today, with economists expecting a slight uptick to 229,000 from 226,000 last week.

According to analysts like Ali, Bitcoin tends to follow a pattern where it dips before Producer Price Index reports, only to rally shortly after the data release, and the opposite often holds true as well. This suggests a potential crypto market rally, with top crypto currencies like BTC and ETH benefiting the most. Reportedly, Ethereum is poised to lead the upcoming altcoin rally, driven by historical patterns.

Is a Fed Rate Cut in September Possible?

AndreaGabellone, head of global equities at KBC Securities, asserted that today’s Producer Price Index report could be “make or break to cement a 25 basis-point rate cut from the Fed, or even to encourage the possibility of a jumbo cut.”

Driven by the upcoming price index and unemployment data, the odds of a Fed rate cut in September are surging. As per Polymarket, there is an 80% chance for the Federal Reserve to lower the interest rates by 25 basis points. Recently, US Treasury Secretary Scott Bessent called for the central bank to implement a 50-basis-point cut in the interest rate.