Four important US economic events, including jobless claims, industrial production, and retail sales data, will likely impact the crypto markets this week.
Also, the US corporate earnings report, which is set to be released this week, may impact investor sentiment in the crypto and traditional markets.
Economists, traders, and investors are closely monitoring these events to understand how they affect the health of the American economy.
Meanwhile, Bitcoin (BTC) is holding steady above $63,900, with many expecting bullish movements in the rest of October.
Initial Jobless Claims to Influence the Crypto Market
The US initial jobless claims report will be released on Thursday this week. This report will provide important information about the state of the US labour market.
The job market has recently shown signs of softening, meaning there are fewer job openings, and hiring may slow down. However, unemployment rates are still low, which is a positive sign.
Strong job growth and rising wages typically indicate a tighter labour market, suggesting employers compete more for workers. This situation can lead to higher wages for workers. However, it can also create inflationary pressures, which means prices may rise.
Given the critical jobs data, the Federal Reserve is considering its next move on interest. The Fed has to balance employment and keep prices stable.
If the initial jobless claims are high, the labour market will weaken, which will likely cause the economy to struggle. When people lose their jobs or find it hard to get work, they tend to spend less money. This reduced spending can lead to less investments in stocks and bonds.
Therefore, some investors might look for other options. They could turn to crypto assets as an alternative investment, spiking demand and increasing prices.
US Retail Sales
Like the employment report, retail sales will give investors and economists an idea of how inflation has affected people. It also shows how willing and able consumers are to spend their money.
The report on Thursday will examine September’s retail sales. Meanwhile, sales grew only by 0.1% in August, or 0.2% when motor vehicles and gasoline were excluded.
This slight rise was better than expected, especially compared to July, when sales jumped by 1.1% overall, and e-commerce grew by 1.4%.
Economists expect retail sales to increase by 0.7% in September compared to August. This will be significant because many are worried the economy might be slowing down or heading toward a recession.
A substantial increase in retail sales might suggest the economy is avoiding a downturn or even growing again. Solid retail sales could have a positive impact on crypto assets.
It would suggest that customers feel confident and the economy is healthy. This could lead to more investments in riskier assets like Bitcoin.
Conversely, if retail sales are weak, it may indicate that the economy is slowing down. Investors might look for alternative, safer investment options.
Industrial Production
Industrial production data show the strength of the manufacturing sector, which plays a significant role in economic growth.
The Federal Reserve tracks this data monthly, including how much is produced in manufacturing, mining, and utilities like electricity and gas. This data helps show changes in the economy’s structure.
Strong industrial production is a good sign for the economy. It can make investors feel more confident. This boost in confidence could lead to increased investment in many assets, including Bitcoin and other cryptocurrencies.
Corporate Earnings
Several major companies will release earnings reports this week starting Tuesday, October 15. Among them are Bank of America (BAC), Citigroup (C), and Charles Schwab (SCHW).
These reports will show how companies from different sectors are faring financially. When companies report strong earnings, the market usually reacts positively.
The relationship between traditional economic indicators and the crypto market is complex. A good overall economic outlook, such as robust retail sales, lower jobless claims, and high industrial production, can lead investors to invest more in cryptocurrencies.
Conversely, negative surprises in these reports can lead to market volatility and risk aversion in both traditional and crypto markets. Investors should watch these economic events closely to make smart decisions and manage risks.
As October progresses strong, the fourth quarter looks promising for Bitcoin and its future performance. Bitcoin is trading at $63,882, up by 1.59% since Monday. This could change as the week’s economic reports come in.
