The market is facing many uncertainties as the United States prepares to implement new taxes and important economic data is released.
Cryptocurrencies continue to surge strongly due to institutional investor waves. Next week, CPI data and US retail sales will determine the interest rate policy direction of the US Federal Reserve (Fed).
- The United States is preparing to impose new taxes despite ongoing negotiations, affecting the global market.
- Bitcoin and cryptocurrencies benefit from institutional capital inflows, setting new records.
- Upcoming US CPI and retail sales data will guide the Fed's interest rate policy.
How Uncertain is the Market with New US Taxes?
The US trade war is not yet settled as many countries continue negotiations. Although the July 9th tax deadline has passed, trade partners have not been clearly notified of the final tax rate.
Official information from the US President indicates that tax notification letters have begun to be sent. However, this does not alleviate concerns as the expected tax date of August 1st is approaching, putting strong pressure on the entire supply chain and financial markets.
"We will continue to closely monitor the progress of negotiations and the impact of these tax policies on the global economy."
John Bolton, US National Security Advisor, July 2019
Why Did Cryptocurrencies Become a Bright Spot This Week?
Bitcoin and other cryptocurrencies were recognized as a positively growing asset class as institutional capital continuously flows in.
This has caused Bitcoin to continuously establish new price highs in a context of traditional financial market instability. Many analysts believe cryptocurrencies are gradually being recognized as an effective risk prevention tool and value storage asset.
"Institutional money is the primary force increasing Bitcoin's reliability and long-term value."
Michael Saylor, CEO MicroStrategy, 6/2019
How Will US CPI and Retail Sales Data Affect Fed Interest Rate Policy?
The US CPI and retail sales data for June will be released next week, considered key indicators influencing the Fed's decision to cut or maintain interest rates.
The market currently forecasts June inflation to slightly increase to 2.7% year-on-year, from 2.4% in May. If this forecast is correct, the likelihood of the Fed cutting interest rates will significantly decrease, putting pressure on the USD and global financial markets.
| Indicator | May 2019 | June 2019 Forecast | Significance |
|---|---|---|---|
| Annual Inflation Rate (CPI) | 2.4% | 2.7% | Higher than expected could reduce the Fed's likelihood of cutting rates |
| Monthly Inflation | 0.1% | 0.3% | Slight increase indicates short-term price pressure |
| Retail Sales | May Results | To be announced on 7/11 | Directly affects purchasing power and economic growth assessment |
What Important Events This Week Will Affect the Market?
Speeches by Fed community members, including the Boston Fed President, Dallas Fed, and Fed board members, are expected to occur continuously next week, providing detailed insights into the US economy and monetary policy.
Additionally, the Beige Book report on economic conditions is of particular interest to investors to assess market trends and risk levels.
Fed Leaders' Speech Schedule This Week
- Tuesday 14:45: Boston Fed President Collins speaks.
- Tuesday 21:15: Fed Member Bowman speaks at conference.
- Wednesday 00:45 and 02:45: Boston Fed President Collins appears again with a speech.
- Wednesday 07:45: Dallas Fed President Logan updates on US economy.
- Wednesday 21:15: Cleveland Fed President Hammack speaks.
- Thursday 02:00: Fed releases Beige Book.
- Thursday 05:30: New York Fed President Williams speaks about economy and policy.
- Friday 22:00: One-year inflation rate forecast published in the US.
Frequently Asked Questions
How Will New US Taxes Affect the Global Market?
Increased taxes can disrupt the global supply chain, increase production costs, and create pressure on financial markets due to rising geopolitical risks.
Why is Bitcoin Surging Strongly During Financial Market Volatility?
Institutional capital is flowing into Bitcoin to diversify portfolios and seek safe assets amid economic uncertainty, helping Bitcoin continuously set new price records.
How Directly Does CPI Data Affect Fed Interest Rates?
CPI reflects inflation pressure; when CPI rises significantly, the Fed may maintain or increase interest rates to control inflation, and vice versa.
What Information Does the Fed's Beige Book Provide to Investors?
The Beige Book summarizes the most recent economic situation observed by Fed branches, helping investors predict monetary policy prospects.
What Significance Do Fed Leaders' Speeches Have for the Market?
Fed leaders' speeches provide signals about upcoming monetary policy, significantly influencing investor expectations and financial market fluctuations.
