Investment in cryptocurrencies, US, China, and UK inflation data, gold price… Will be the most noteworthy events in the current period.
Here are some notable events to watch for next week:
1/Bitcoin boom
Bitcoin has reached its record high, $70,000, back to the golden age of this asset in November 2021 when interest rates were low and “blockchain” and “Web3” were booming. The financial market is calling this phenomenon the “crypto craze”. On Friday (8/3), bitcoin reached $70,105.
After the explosion in 2021, the market entered a “crypto winter” with a series of bankruptcies and collapses at the largest cryptocurrency companies that caused millions of people to lose money. Many cryptocurrency executives have been criminally charged and regulatory agencies have increased warnings of potential risks.
But this seems to have not stopped a new wave of investment pouring into cryptocurrencies. No one knows for sure what is driving this increase, although analysts point out that billions of dollars have flowed into US bitcoin ETF funds, launched this year.
Cryptocurrency enthusiasts believe that this industry has matured, but central banks and regulatory agencies remain vigilant. Now investors are wondering: how much more can this market increase and will the end of this rally be different from previous ones?
2/US inflation
The US inflation report, to be released on Tuesday (12/3), could help answer one of the most important questions in today’s market – when will the Federal Reserve start cutting interest rates?
The US consumer price index for February 2024 is estimated to increase by 0.4%, after the January CPI increased faster than expected, at 0.3%.
Investors have reduced their expectations for the number of times the Fed will cut interest rates in 2024 amid persistent concerns about the strength of the economy – which is causing inflation. Fed Chairman Jerome Powell in a recent speech to Congress said that reducing interest rates “may still be appropriate” later this year if policy makers have more confidence that inflation will continue to decline steadily.
As the Q4 earnings reporting season ends, economic and inflation data will be in focus ahead of the Fed’s next meeting in late March.
3/Gold price
The gold market is “booming” with consecutive record highs being broken.
Last week, the gold price reached its all-time high on Tuesday (5/3) when it surpassed the December 2023 peak, mainly supported by increasing signs of gradually decreasing price pressure in the US and the attractiveness of traditional safe-haven assets. On Friday (8/3), gold reached $2,185.19 after a report showed that US unemployment rate increased and wage growth was moderate despite strong job growth in February.
The market expects that the fundamental preconditions for gold price increases are still in place, namely the hope that the Fed will cut interest rates later this year and the weakening USD.
4/China economic data
Investors were not surprised by information from the Chinese People’s Political Consultative Conference (CPPCC) – China’s highest-level political advisory body – which opened on the afternoon of March 4, with the target of stabilizing 2024 economic growth at 5% and no announcement of any stimulus measures to boost the economy.
The Chinese real estate sector is in trouble and whether it can become better or worse when Vanke’s bonds were heavily sold. New home prices in China may further decline this year as support measures have little impact until now.
Next week, the market will be watching for data from China, including house price index released on March 15 and inflation data released on March 9. There is a high possibility that China will loosen its monetary policy although its interest rates are already lower than those in the US.
5/UK wage data
The UK economy has avoided a recession in an instant, thanks to positive business activity and increased consumer spending, even with interest rates at their highest in 16 years and persistent inflation. The Bank of England is less concerned about growth and focuses more on inflation. The job market is showing signs of slowing down. Hiring rates have decreased consecutively for three months until January, and businesses are still struggling to find and retain employees.
The average weekly wages – a key factor for the Bank of England (BoE) to make interest rate decisions – fell to 6.2% in December, the slowest growth rate in over a year, but not slow enough to convince policy makers that interest rates will need to be cut sooner or later. Wage data to be released on March 12 may change that view of BoE policymakers.
Reference: Reuters
