Weekly Forecast: Economic Data, Post-Consensus Wrap-Up and Zcash’s Gemini Listing
It’s shaping up to be another active week in the financial markets, as currency and stock traders shift their attention to economic data and geopolitics. Cryptocurrency traders will be looking for clues about the direction of the market following a highly successful Consensus blockchain summit.
To get a better sense of what’s ahead, we encourage readers to go over latest Week in Review.
Consensus 2018: The Aftermath
The year’s biggest blockchain event was greeted positively by policymakers, academics and industry proponents. However, unlike the previous three years, Consensus failed to spark a sustained rally in cryptocurrency prices.
Though Consensus usually generates double-digit gains for bitcoin during the event, the bulk of the rally occurs long after the summit has taken place. Since 2015, post-Consensus gains have ranged between 78% and 138%. With this precedent in mind, traders will be closely monitoring market activity over the next few weeks to see if price action follows a similar trajectory.
In addition to Consensus, the blockchain industry is riding a wave of momentum tied to institutional adoption, innovation and sanguine comments from regulatory agencies. These stories have counterbalanced negative headlines concerning fraudulent ICOs and the massive carbon footprint of bitocin mining.
Zcash Lists on Gemini
The privacy-focused Zcash cryptocurrency has been cleared by U.S. regulators to be listed on the Gemini exchange. The exchange, which is led by Cameron and Tyler Winklevoss, began accepting ZEC deposits on Saturday with full trading expected to begin on Tuesday. ZEC values surged to two-and-a-half month highs following the news.
By listing on Gemini, Zcash could enjoy higher liquidity and become a front-runner in the launch of cryptocurrency derivatives products. That’s because Gemini provides pricing data to CBOE, which was the first regulated exchange to launch bitcoin futures. According to some analysts, the addition of Zcash could hasten the production of ZEC derivatives products.
Traders with exposure to stocks, currencies and commodities can expect a steady stream of market-moving events throughout the week.
Three members of the Federal Open Market Committee (FOMC) are scheduled to deliver speeches on Monday, including Raphael Bostic, Patrick Harker and Neel Kashkari. The Fed’s policy-setting board is widely expected to raise interest rates at its next meeting in June.
Fed fund futures prices imply two more rate hikes for 2018, with a third upward adjustment a strong possibility.
In terms of economic data, the Chicago Fed will release the national activity index at the start of New York trade.
The United Kingdom’s House of Commons will hold inflation report hearings on Tuesday. In North America, the U.S. Richmond Fed will release its monthly manufacturing survey for May.
Wednesday is the most active session of the week from a data perspective, with IHS Markit scheduled to release a deluge of PMI reports for Japan, Eurozone and United States.
The U.K. Office for National Statistics will release headline inflation figures, including the consumer price index and producer price index for the month of April.
In the United States, the Federal Reserve will release the FOMC meeting minutes for May.
Commodity traders will be keeping close tabs on weekly crude inventory data courtesy of the U.S. Energy Information Administration (EIA). Crude inventories are forecast to fall by nearly 1.8 million barrels in the week ended May 18.
A meeting of the Eurogroup will be in the headlines in the second half of the week, although it is not expected to generate any strong signals about monetary policy. In terms of data, GfK will report on German consumer confidence and the U.K. government will issue its monthly report on retail sales.
The European Central Bank (ECB) will release the monetary policy meeting accounts of its most recent gathering, where officials voted to keep interest rates on hold.
The Fed’s William Dudley and Patrick Harker of the FOMC are also scheduled to deliver speeches.
Japanese inflation data and the latest GDP figures for the U.K. will headline the economic calendar on Friday. In the United States, a report on monthly durable goods orders will also make headlines.
Federal Reserve Chairman Jerome Powell will participate in a panel discussion on financial stability and central bank transparency in Stockholm, Sweden.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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