CPI WednesdayOn Wednesday, July 13th, the June U.S. CPI inflation numbers will be released, and the market is expecting continued growth of the year-over-year CPI to 8.8%, up from the May year-over-year CPI of 8.6%.
Earlier this year, U.S. inflation releases have been affiliated with volatile days in the crypto market, with the two most recent CPI releases creating havoc in the market. The above-expected April CPI release on May 11th saw bitcoin plunge by 6%. However, while some of this carnage may be affiliated with CPI, this also occurred during the collapse of UST and Luna, which was likely the key component in BTC’s crash then. The May inflation release on June 10th, however, surprised the market. After weeks of ranging, this CPI release pushed BTC down 3.4% and became the initial catalyst leading to the liquidation of Three Arrows Capital and the ensuing mayhem in the lending sector. The June CPI release was particularly concerning, as it surpassed the year-over-year peak from April, illustrating that inflation had yet to be contained. Now, the market is bracing for further growth in the CPI, expecting new highs of 8.8% YoY. Inflation surprises towards the upside lead to enhanced expectations of further tightening of monetary policies by the Federal Reserves. These contractionary policies have a broad impact on equities, and this macro backdrop has been an important factor in bitcoin's bear market since November 2021. Be prepared for volatility following Wednesday's CPI print at 08:30 E.T.
Source: Investing.com, Tradingview