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Investing.com – February data, including consumer prices and retail sales, will offer further insights into the outlook for potential rate cuts by the Federal Reserve. Bitcoin hits record highs, while Wall Street could experience another volatile week. Here’s what you need to know to start the week.
- American inflation data
Investors will be watching Tuesday’s U.S. inflation data as they try to gauge how soon the Fed might start cutting interest rates.
Economists expect February’s consumer price index to rise after January’s faster-than-expected 0.3% increase.
On Thursday, Fed Chair Jerome Powell said it would probably be appropriate to cut rates “at some point this year,” but made clear that he and his colleagues are not ready yet.
Market watchers will also be watching Thursday’s retail sales data for February, which is expected to recover after falling by the same amount the previous month.
The economic calendar also features updates on and weekly data on .
Fed officials will enter the traditional blackout period ahead of their next meeting next week.
- Bitcoin boom
hit a new all-time high above $70,000, driven by investor demand for new spot bitcoin ETFs launched this year and expectations of a decline in global interest rates.
Billions of dollars have flowed into ETFs in recent weeks, while the market has also been buoyed ahead of an expected upgrade to the Ethereum blockchain platform, home to the second largest digital ether, and a Bitcoin “halving” event, which Bitcoin minting flow slows in April.
Bitcoin’s previous boom in 2021 was followed by a “crypto winter,” when bankruptcies and collapses of the largest cryptocurrency firms left millions of investors deep-pocketed, prompting regulators to step up risk warnings .
But this does not seem to have discouraged the arrival of a new wave of money. Cryptocurrency fans say the industry has matured, but central bankers and regulators are still wary. Now investors are wondering: How much bigger can it get, and will it be different this time?
- Oil prices
Oil prices closed 1% lower on Friday and fell even further on the week as markets remained wary of weak Chinese demand even as the OPEC+ producer group extended supply cuts.
Both benchmarks fell for the week, falling 1.8% and losing 2.5%.
China last week set an economic growth target for 2024 of around 5%, which many analysts say is ambitious without further stimulus.
On the supply side, OPEC+ members led by Saudi Arabia and Russia agreed on Sunday to extend voluntary oil production cuts by 2.2 million barrels per day in the second quarter, lending further support to the market among concerns about global growth and increased production outside the group. .
Energy traders also focused on the timing of possible rate cuts by the Fed and ECB. Lower interest rates could increase demand for oil by stimulating economic growth.
- Stock market
Wall Street’s three major indexes closed lower on Friday, capping a turbulent week as AI darling Nvidia (NASDAQ:) reversed course after a recent rally.
For the week, the stock lost 0.26%, while it fell by 1.17% and 0.93%.
Nvidia closed Friday down more than 5%, posting its worst daily performance since late May. The company’s shares still ended the week with gains of more than 6% in a rally that has added more than $1 trillion to its market capitalization this year.
Analysts say investors are locking in profits after markets’ recent bull run.
Given that upcoming inflation data likely won’t be enough to reassure the Fed that price pressures are cooling quickly enough to justify a move in the near term, market participants are likely to remain somewhat cautious.
- UK employment data
The UK will publish its latest jobs report on Tuesday, with investors and the Bank of England focusing on wage growth amid speculation over the timing of a first rate cut.
Average hourly wages fell to a rate of 6.2% in December, the slowest pace of growth in more than a year, but not slow enough to convince BoE officials that interest rates – at 16-year highs – they will have to come down sooner rather than later.
Meanwhile, the Eurozone will release data for January. The December report showed a sharp increase in output that erased an entire year of declines. Another strong reading would be an encouraging sign for GDP growth in the first quarter.
–Reuters contributed to this report