U.S. Economic Calendar 5.12-5.18: April CPI and PPI May Shape Market Trends

This week, global financial markets are set to witness a series of significant macroeconomic events, including the release of U.S. April CPI data, retail sales figures, and speeches from multiple Federal Reserve officials. Market participants are closely monitoring these events to assess inflation trends, consumer spending, and the Federal Reserve's future monetary policy direction. Meanwhile, Bitcoin has surged past the $100,000 mark, reflecting growing investor optimism. However, persistent macroeconomic uncertainty may influence its sustainability at this level.

Key Macro Events This Week

Monday, May 12: Speech by Federal Reserve Governor Kugler

Federal Reserve Governor Kugler is scheduled to deliver a speech today, with markets eager to hear his views on economic prospects and monetary policy. Recent statements by Fed officials have been broadly hawkish. Over half of Fed policymakers spoke publicly last Friday, with none suggesting that the Fed is close to cutting rates. Kugler's remarks might provide further insights into the Fed's policy direction.

Tuesday, May 13: Release of U.S. April CPI Data

The U.S. will release its Consumer Price Index (CPI) data for April on Tuesday. Markets widely anticipate that inflationary pressures remain elevated. The April CPI data may confirm excessive price pressures, leaving no immediate justification for rate cuts. This data will significantly influence market expectations for Fed policy and, in turn, the prices of risk assets, including Bitcoin.

Thursday, May 15: U.S. Economic Data and Fed Speeches

Thursday will be a pivotal day for macroeconomic events, with the U.S. releasing several key economic indicators:

• April Retail Sales MoM: A gauge of consumer spending trends, shedding light on the impact of high inflation and interest rates on the economy.

• April Producer Price Index (PPI) YoY and MoM: Another perspective on inflationary pressures.

• Weekly Initial Jobless Claims: A measure of labor market stability.

• Fed Chair Jerome Powell will deliver opening remarks at an event, a speech likely to have a significant impact on market sentiment.

The Fed will also convene its second Thomas Laubach Research Conference, focusing on monetary policy and economic research. This conference aims to provide academic perspectives for the Fed’s future policy framework reviews.

Friday, May 16: U.S. May One-Year Inflation Expectation Preliminary Data

The U.S. will release its preliminary May one-year inflation expectation data on Friday. Markets are closely watching changes in consumer inflation expectations. An uptick in inflation expectations could reinforce the Fed's hawkish stance, impacting the U.S. dollar index and risk asset prices.

Market Trends and Analysis

Bitcoin Market Dynamics: Amid a week dense with macroeconomic events, Bitcoin has shown strong performance, reclaiming the $100,000 level with relatively low selling pressure. In a May 10 analysis, Swissblock noted: “Prices have recovered above $100,000, but investors are not rushing to exit. While $100,000 is a significant psychological level, it is not attractive enough for investors—markets are waiting for a better exit point.” Charts from Swissblock indicate that Bitcoin’s Net Realized Profit/Loss has seen a notable reduction in selling pressure within the current price range, reflecting a shift toward more optimistic market sentiment.

Slower Pace in Fed Balance Sheet Reduction: As of May 11, the Federal Reserve’s balance sheet has contracted to $6.7 trillion, marking its lowest level since April 2020. Since April 2022, the Fed has reduced its balance sheet by $2.3 trillion, a 25% decline. The deceleration of this quantitative tightening process could offer some degree of liquidity support to the market and benefit risk assets such as Bitcoin. However, given the Fed’s continued hawkish stance, investors should remain alert to the possibility of further monetary tightening.