The July CPI data from the United States will be released, forecasted to show a slight increase compared to the previous month, creating expectations for the Federal Reserve to cut interest rates in September.
This result triggers cautious developments in the cryptocurrency market as Bitcoin and Ethereum options contracts maintain high open interest.
MAIN CONTENT
The July CPI in the United States is expected to rise by 2.8% year-on-year, higher than June's 2.7%.
Core CPI is estimated to rise to 3.0% year-on-year.
The probability of the FED cutting interest rates in September is nearing 90%, putting pressure on the cryptocurrency market.
How does the July CPI data in the United States affect the market?
The July CPI data is expected to be released at 8:30 PM Beijing time, with an increase of 2.8% year-on-year, higher than the 2.7% of June. Core CPI could reach 3.0% year-on-year, reflecting persistent inflationary pressure.
CPI results play a crucial role in guiding the FED's monetary policy. Slightly increasing data will reinforce expectations that the FED may loosen policy by cutting interest rates to stimulate the economy.
Financial markets, especially cryptocurrencies, often react strongly to CPI data fluctuations as they directly affect expectations about interest rates and liquidity.
How is the probability of the FED cutting interest rates in September assessed?
Data from the Chicago Mercantile Exchange indicates that investors assess the probability of the FED cutting interest rates in the September meeting to be nearly 90%. This shows that the market places significant trust in short-term monetary policy support actions.
This expectation results from the increasing inflationary pressure that CPI reflects, as well as signs of slowing U.S. economic growth. Rate cuts will boost liquidity and may help alleviate pressure on risk assets like cryptocurrencies.
This trend makes investors cautiously allocate capital, especially when the market for Bitcoin and Ethereum options contracts reaches high open interest, signaling potential volatility increases.
The FED's interest rate cuts are an important signal for the market to maintain economic recovery momentum, facilitating capital flows into high-risk assets like cryptocurrencies.
Market analysis, financial expert 2024
Why is the cryptocurrency market cautious before CPI data?
Bitcoin and Ethereum options contracts are recording high open interest, reflecting significant but cautious investor interest in the impact of CPI data on short-term price volatility.
High open interest along with expectations of interest rate cuts helps form a risk hedging strategy and seize opportunities in scenarios of high volatility. This is an indication that the market is awaiting clear signals from the data to decide the next direction.
Proactively monitoring economic data and options market developments helps investors enhance risk management and improve portfolio efficiency, especially in the context of inflation and complex monetary policy changes.
Frequently Asked Questions
What is CPI and why is it important for the cryptocurrency market?
CPI measures consumer inflation, affecting interest rates and monetary policy. CPI data impacts cryptocurrency market sentiment through expectations about currency and liquidity.
How will a high probability of the FED cutting interest rates affect Bitcoin and Ethereum?
Cutting interest rates typically creates an easy liquidity environment, supporting the prices of Bitcoin and Ethereum due to capital inflows into risk assets.
Why do investors pay attention to options contracts in the cryptocurrency market?
Options contracts are tools for risk hedging and profit opportunities in volatility, reflecting investors' expectations and strategies ahead of economic data.
What does July's CPI data indicate about current inflation?
Based on forecasts, inflation still faces slight upward pressure, indicating that the FED needs to be cautious in adjusting monetary policy.
How to take advantage of market volatility based on CPI data?
Investors should closely follow the news, use risk management techniques, and consider flexible investment strategies based on CPI developments and monetary policy.
Source: https://tintucbitcoin.com/cpi-my-thang-7-tang-28-anh-huong-crypto/
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