- U.S. Chicago PMI surprises with improvement while Germany’s CPI stays consistent suggesting mixed inflationary pressures
- Trump’s “Liberation Day” tariffs spark fears of global trade wars and market uncertainty
- Key U.S. economic indicators and labor data could shape monetary policy and impact stocks and cryptocurrencies
As March ends and April begins, the cryptocurrency market braces for impactful events. Key data reports could shape the Fed’s next interest rate decision, while Donald Trump’s anticipated “April 2nd” announcement — digital assets are embarking on a wild ride.
Monday – German Inflation Cools, Chicago PMI Surprises
Today, the Institute for Supply Management released the latest U.S. Chicago Purchasing Managers Index (PMI), offering insights into the manufacturing sector’s health. This report, closely watched by economists and investors, provides key data on production levels, new orders, and employment trends, which could influence upcoming monetary policy decisions.
The Chicago PMI revealed a better-than-expected reading of 47.6, surpassing both the forecast and previous value of 45.5. While still below the 50-mark indicating contraction, this improvement suggests a potential recovery in the manufacturing sector.
Meanwhile, across the Atlantic, The Federal Statistical Office of Germany released the data for the monthly CPI in the region. The report showed a reading of 0.3%, spot on according to the forecast. This suggests that while fears of growing inflation increase around the world, Germany may not be as heavily affected for the time being.
Tuesday – Market Awaits Key Economic Data
Tuesday The cryptocurrency market will closely watch key economic indicators from both sides of the Atlantic. In the Eurozone, the March Consumer Price Index (CPI) is expected to show a year-on-year inflation rate of 2.2%, slightly below the previous 2.3%. This could signal easing inflationary pressures in the region.
In the United States, several significant reports are due. The S&P Global Manufacturing PMI for March is forecasted at 52.7, while the ISM Manufacturing PMI is expected to come in at 50.3. Both indicators will provide insights into the health of the manufacturing sector. Additionally, the ISM Manufacturing Prices Index forecasted at 62.4, will shed light on input cost trends.
The JOLTS Job Openings report for February, with a forecast of 7.74 million, will also be released. This data will offer a glimpse into labor market dynamics, which remain a critical factor for the Federal Reserve’s monetary policy decisions.
Wednesday – Trump’s “Liberation Day”
According to reports from the White House, Wednesday, April 2nd will likely be the key date this week that will presumably be the turning point for global trade policies.
President Donald Trump is expected to move forward with his tariffs on foreign exports, advancing from simple threats to de-facto taxing other nations. President Trump has dubbed April 2nd as “Liberation Day”, marking what will probably be a year-long trade war among formerly trade partners.
Trump is keen on resolving “trade imbalances”, according to the President himself. The White House also expects to boost American manufacturing, potentially creating an economic boost in the long run.
It is pretty hard to estimate what will happen to crypto on Wednesday. But one ‘almost’ sure thing that investors can expect is volatility.
Digital assets tend to react negatively to sensitive macroeconomic events. However, there is a potential for a slight growth. The American stock market may experience a relief rally on that date. Given the tariffs favor U.S. companies, there is a strong likelihood that the market will react favorably, at least at first.
If Bitcoin can follow markets like the S&P 500 in that scenario, it could see a temporary boost in value, aligning with a potential relief rally in U.S. equities. However, the long-term impact remains uncertain, as retaliatory measures from other nations and broader economic repercussions could introduce further instability in the economy.
Thursday – Jobless Claims and Oil in Focus
Economic indicators will be the focus as the U.S. releases several key reports that could influence market trends. The Initial Jobless Claims report, forecasted at 224K compared to the previous 227K, will provide insights into labor market stability.
Additionally, attention will turn to the S&P Global Services PMI, expected to drop from 54.3 to 51.0, which may signal a slowdown in the services sector. The ISM Non-Manufacturing PMI is projected to edge up to 53.5 from 53.0, suggesting modest growth, while its Prices Index will offer clues on inflation trends.
Energy markets will also take note of Crude Oil Inventories, with previous data showing a decline of -3.341M.
Friday – All Eyes on U.S. Labor Data
Friday The focus shifts to the U.S. employment data, with major reports set to influence markets. The Nonfarm Payrolls for March forecasted at 151K, will gauge job creation trends, a key economic concern from analysts about the current administration.
Meanwhile, Average Hourly Earnings (MoM), are expected to hold steady at 0.3%, which will provide insights into wage inflation.
The Unemployment Rate, unchanged at 4.1% at the latest reading, will also be closely monitored for signs of labor market stability. Later, Fed Chair Jerome Powell is scheduled to speak, potentially offering clues on future monetary policy directions.
Both crypto and stock markets could see volatility as investors interpret these critical data points and Powell’s remarks.
