The Most Important Macroeconomic Factors of Last Week and What to Expect Next Week

Macro Overview Last Week

Despite the ups and downs in the market, last week was marked by significant macroeconomic events that shaped the investment landscape. One crucial development worth mentioning is Ripple’s victory in the lawsuit against the Securities and Exchange Commission (SEC). This positive outcome brought much relief and led to price increases for altcoins, as well as for major cryptocurrency exchanges like Coinbase and Binance, which are currently facing their own legal battles with the SEC.

In addition to legal victories, the low inflation figures in the United States caught the market’s attention. This unexpected decline in inflation has fueled optimism about the future, but it also raises questions about the underlying dynamics of the US economy. It’s important to consider why inflation is suddenly falling, as it may indicate a drop in demand within the US economy. If this is the case, the long-awaited recession may manifest itself sooner than expected.

Notably, the gross domestic income (GDI) of the United States already suggests a recession. Negative growth rates were observed in both Q4 2022 and Q1 2023, indicating a potential economic downturn. Market participants should be prepared for the possibility of a serious recession and falling prices in the coming months.

Macro Overview Next Week

Looking ahead to next week, several essential macroeconomic data releases are scheduled. These data points will serve as key indicators for assessing the health and stability of different economies.

Retail Sales in the United States (Tuesday, July 18)

On Tuesday, investors will closely monitor the retail sales figures from the United States. Retail sales represent a vital part of the economy and often provide the first signs of a recession. The performance of retail sales can offer valuable insights into consumer sentiment and spending patterns.

Consumer Price Index (CPI) and Core Inflation for the Eurozone (Wednesday)

Wednesday brings the release of the consumer price index (CPI) and core inflation data for the Eurozone. The CPI is expected to be 5.5 percent, while core inflation is projected to remain at 5.4 percent. These figures suggest that inflation is still relatively high and reinforce the European Central Bank’s decision to maintain interest rates at their current level.

Unemployment Claims in the United States (Thursday)

Thursday’s report on unemployment claims in the United States is anticipated to be a significant moment of the week. Unlike the monthly unemployment rate, which provides a snapshot of the job market, unemployment claims offer weekly insights. By analyzing these claims, we can make predictions about the unemployment rate.

Despite the unemployment rate being historically low at 3.6 percent, the United States’ gross domestic income (GDI) has shown negative growth for two consecutive quarters, technically putting the country in a recession. This peculiar situation presents a challenge for the Federal Reserve, which usually lowers interest rates during a recession to stimulate the economy. However, in this scenario of low unemployment, the central bank faces the difficult choice between supporting the economy and potentially allowing inflation to rise or reducing inflation by maintaining higher interest rates.

Next week’s macroeconomic data releases may not be particularly thrilling, but they will provide valuable insights into the current state and future trajectory of the global economy. For traders and investors, understanding these indicators can help make informed decisions and navigate the ever-changing financial landscape.

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